A reader was concerned that SARS is not required by any statutes to pay outstanding refunds and rebates to a deserving taxpayer within a stipulated period.
This gave rise to a series of articles in this column on the potential remedies open to a disgruntled taxpayer. The declaratory order, the mandamus, and the common-law remedies relating to unjustified enrichment were all discussed.
A final potential remedy remains: the judicial review of administrative action.
The role of the high courts
Under the common law of South Africa, the High Courts can review the administrative actions taken by government officials and agencies that affect the lives of people.
This is in order to prevent abuses of power by the state. The courts’ authority in these instances is supplemented by the Promotion of Administrative Justice Act (PAJA) and Sub-Section 33(1) of the Constitution, which hold that everyone has the right to administrative action that is lawful, reasonable and procedurally fair. (All common-law remedies are subservient to the Constitution.)
When SARS fails to pay a rebate despite reminders, requests and demands from the taxpayer concerned, it could be argued that this is not a mere ‘oversight’, but a conscious decision to withhold payment.
In other words, it is an administrative action that may be subject to judicial review under Section 6 of the PAJA, as long as common-law remedies are not provided for or ousted by the PAJA. The section provides the grounds for review.
If the standard to which the administrative action should comply is not met, the taxpayer may ask a court to provide appropriate relief.
Section 7 is also important, as it lists the time-bar provisions. Normally, an administrative decision (or lack thereof) must be reviewed within six months. If this period has passed, the reasons for the delay must be noted so that the time-bar is not held against the taxpayer.
A judicial review cannot take the place of an appeal. An appeal is appropriate if a decision is taken within the parameters of the law, but held to be incorrect – that is, the legal position is in dispute.
A review, on the other hand, is the correct procedure to adopt where the decision taken is held to be outside of the law.
Thus, if SARS refuses to pay a legitimate claim and presents a legal argument for why the refund is delayed, its decision can be appealed. Any decision taken without reliance upon some legal ground is reviewable.