The right to just administrative action in the context of suspending the payment of disputed tax
CITATION: De Lange, S. & Van Wyk, D. 2017. The right to just administrative action in the context of suspending the payment of disputed tax. Potchefstroom Electronic Law Journal, 20:1-26, doi:10.17159/1727-3781/2017/v20i0a1528.
The original publication is available at http://journals.assaf.org.za/per
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. Exercising a discretion 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 discretion in terms of section 164(3) of the TAA is exercised. This is achieved by adopting an explanatory research approach and performing a literature review of the discretion 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 discretion exercised by the senior SARS official is influenced directly by the right to just administrative action, it should be exercised in a lawful, reasonable and procedurally fair manner to ensure compliance with the Constitution and the PAJA. For the discretion to be exercised 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 discretion is exercised in a procedurally fair manner, 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.