The right to just administrative action in the context of suspending the payment of disputed tax

• Published in: Potchefstroom electronic law journal Vol. 20; no. 1; pp. 1 - 26
• Main Authors: Van Wyk, Danielle, De Lange, Silke
• Format: Journal Article
• Language: English
• Published: Potchefstroom North-West University 01-01-2017
• Subjects: Action; Administrative action; Administrative law; Compliance; Constitutional law; Court decisions; Decisions; Discretion; Discretionary power; Grants; Liability; Literature reviews; Procedural justice; Promotion of Administrative Justice Act; Section 164 of the Tax Administration Act; Section 33 of the Constitution; Suspension of payment of tax pending objection and appeal; Tax administration; Tax controversies; Tax revenues; Taxation; South Africa
• ISSN: 1727-3781; 1727-3781
• DOI: 10.17159/1727-3781/2017/v20i0a1528

Section 164(3) of the Tax Administration Act 28 of 2011 (hereafter TAA) provides a senior South African Revenue Service official (hereafter, respectively, SARS and senior SARS official) with discretionary powers to suspend the payment of disputed tax or a portion thereof, having regard to relevant factors, if the taxpayer intends to dispute the liability to pay such tax. Making a decision in terms of section 164(3) of the TAA constitutes administrative action. Section 33(1) of the Constitution of the Republic of South Africa, 1996 (hereafter Constitution) grants everyone the right to just administrative action that is lawful, reasonable and procedurally fair and the Promotion of Administrative Action Act 3 of 2000 (hereafter PAJA) was promulgated to give effect to this right. The objective of this article is to apply the right to just administrative action to the manner in which the decision in terms of section 164(3) of the TAA is taken. This is achieved by adopting an explanatory research approach and performing a literature review of the process in terms of section 164(3) of the TAA and the constitutional obligations in terms of section 33 of the Constitution as given effect to in PAJA. As the decision taken by the senior SARS official is influenced directly by the right to just administrative action, it should be taken in a lawful, reasonable and procedurally fair manner to ensure compliance with the Constitution and PAJA. For the decision to be taken in a lawful manner, the senior SARS official must at least be authorised to exercise the discretion in terms of the TAA and comply with the procedures and conditions stated in section 164(3) of the TAA. For the decision to be considered reasonable, the decision must be, at the minimum, rational and proportional, and to ensure that the decision is taken procedurally fair, SARS should comply with at least the relevant compulsory elements in terms of section 3(2)(b) of PAJA. A decision in terms of section 164(3) of the TAA which fails to meet the requirements of lawfulness, reasonableness and/or procedural fairness will be subject to review on several grounds listed in section 6(2) of PAJA.