Tshwane, 20 October 2023 – The Commissioner of the South African Revenue Service (SARS) has welcomed the judgment handed down this week by the KwaZulu-Natal Local Division, dealing with the insolvent estate of Jubilee Plant Hire SA CC (“Jubilee”).
The court decided to refuse to lift the veil of secrecy on the order granted in November 2021 thereby accepting SARS’ application that authorised the inquiry and interdicting the sole member and witnesses in the insolvency enquiry from accessing the information at their disposal. The court further gave a cost order against the owners of Jubilee.
The court, based on SARS’ contention, set aside an attempt at abusive business rescue process and liquidated Jubilee. Jubilee, together with other connected closed corporations, owed SARS more than R400-million. With the setting aside of the inquiry convened by the Master of the High Court and in light of the administration of Jubilee’s estate being prejudiced, SARS was compelled to intervene and institute an application to convene an enquiry in terms of the Companies Act in the High Court of KwaZulu-Natal.
The enquiry was subsequently convened and after appearing at the enquiry, the sole member of Jubilee, Mrs Neermala Moodley, and certain witnesses, namely, Mr Panganathan Marimuthu, Mr Lovendren Marimuthu, Ms Shantal Redhi and Ms Ramona Budden, requested the presiding Commissioner to disclose the court papers in the SARS application for this new enquiry. The Commissioner refused the request.
Thereafter the applicants launched an application for the disclosure of SARS court papers and an interim interdict excusing the applicants from attending the abovementioned enquiry. SARS opposed both applications. In the judgment handed down by the Kwa-Zulu Natal Local Division, the court found that the applicants failed to provide strong grounds for the court to lift the veil of secrecy.
The applicants in their papers did not specifically deny that the previous orders were disclosed to the court, thus indicating that this was not in dispute. In addition, the court was of the view that the applicants failed to deal with the issues raised by SARS in its papers. Therefore, since the applicants failed to deny SARS’ allegations in the enquiry orders, the application was dismissed with costs – called in law Plascon-Evans principle.
SARS Commissioner Kieswetter is saddened that some taxpayers try to avoid being compliant with their obligations in liquidation proceedings and court processes, which is to the detriment of creditors in the insolvent estate. In many instances, the fiscus is the main victim. SARS is committed to acting decisively and with determination when non-compliant taxpayers evade their tax obligations to the detriment of the fiscus, including the pursuit of these taxpayers’ liquidation and sequestration. SARS further calls on all insolvency practitioners to execute their duties fearlessly and decisively as their efforts are fundamental to a creditor’s ability to recover as much of their debts as possible to enable the continuation of the creditor’s own existence and business activities. SARS will always work in a manner that supports the growth of the economy and job creation.
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