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Backdating vat

backdating vat-52

In the court’s view only one assessment had been raised, and that was the IT40 processed on 31 March 2011.It had to also be determined whether the manipulation of the dates was in bad faith and therefore invalidated the additional assessment.

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SARS also indicated the ‘second date’ as being 31 March 2011.An audit inquiry was sent to the taxpayer in 2010, to which the taxpayer replied.A letter of findings was issued to the taxpayer on 24 February 2011 and the taxpayer replied on 25 March 2011.SARS ignored the taxpayer’s request to not set off the amounts in the disputed assessment against refunds owed to the taxpayer.SARS had ulterior motives in raising the additional assessment.SARS was inconsistent in its practice by not indicating the second date as being 30 days after the due date.

The decision to raise the assessment was not rationally connected to the reasons contained in SARS’s letter of findings. SARS’s conduct was inconsistent with the Constitution and the rule of law.

SARS failed to follow its common practice after concluding audits to reply to the taxpayer’s submissions.

The taxpayer had a legitimate expectation that SARS would so reply before issuing the assessment.

The original assessment in respect of the taxpayer’s 2006 year of assessment was raised on 1 April 2008.

A refund had been due to the taxpayer and a refund audit was conducted by SARS.

The taxpayer argued that by predating the due date it was deprived of the full period allowed for objecting or requesting reasons.