Navigating the Labyrinth: Personal Liability, Repatriation Orders and Judicial Oversight in Tax Disputes

An Analysis of Greyvensteyn v CSARS and Broader Tax Adjudication Principles

By Dr Hendri Herbst

Introduction

The judgment in Andries Greyvensteyn v The Commissioner for the South African Revenue Service and Others[1] offers critical insights into the powers of the South African Revenue Service (SARS) to hold third parties personally liable for tax debts and to seek the repatriation of assets. This article delves into the High Court’s comprehensive analysis of the constitutionality of key provisions within the Tax Administration Act 28 of 2011 (TAA). Furthermore, it explores the perennial issues of jurisdiction in tax disputes and the intricate interplay between the TAA and the Promotion of Administrative Justice Act 3 of 2000 (PAJA). This analysis is contextualized by recent legal commentary, and the significant Constitutional Court (CC) judgment in United Manganese of Kalahari (Pty) Limited v CSARS and four other cases[2], as discussed in the Renmere Tax Flash of 11 April 2025, which further clarifies aspects of High Court jurisdiction in tax matters.

Background to the Greyvensteyn dispute

The applicant, Mr. Andries Greyvensteyn, brought a constitutional challenge against sections 180, 184(2), and 186(3) of the TAA. SARS sought to hold Mr. Greyvensteyn personally liable for the substantial tax debts (approximately R3 billion) of Gold Kid Trading (Pty) Ltd (the fourth respondent), a company involved in refining precious metals. SARS alleged fraudulent activities by the fourth respondent.

SARS had obtained an interim ex parte order in February 2023 (the ‘February order’). This order included a preservation order under section 163 of the TAA and a repatriation order under section 186(3) of the TAA against Mr. Greyvensteyn and the fourth respondent. The repatriation order compelled Mr. Greyvensteyn to repatriate his foreign assets and surrender his passport, albeit with the provision that the appointed curator bonis could not unreasonably withhold consent for travel. Mr. Greyvensteyn challenged the constitutionality of these TAA provisions. However, the High Court dismissed this application, emphasising that the recovery of taxes is critical to the public benefit and interest.

The Constitutional Challenge in Greyvensteyn

Sections 180 and 184(2) TAA – Personal Liability and the Right of Access to Courts (Section 34 of the Constitution)

Section 180 of the TAA allows SARS to hold a person personally liable for a taxpayer’s tax debt if that person controls or is regularly involved in the management of the taxpayer’s overall financial affairs, and their negligence or fraud resulted in the failure to pay the tax debt, provided a senior SARS official is satisfied of such negligence or fraud.

Section 184(2) of the TAA mandates SARS to provide the person an opportunity to make representations before being held liable or as soon as practical thereafter.

Mr. Greyvensteyn contended these provisions violate his right of access to court (provided for in section 34 of the Constitution) by empowering SARS to unilaterally determine third-party liability (including findings of fraud, a judicial function in his view), ousting court jurisdiction and thereby amounting to self-help. He argued that the TAA provided no independent tribunal for such disputes, as the Tax Court primarily handles assessment-related appeals.

SARS’s counterarguments and the Court’s findings in Greyvensteyn:

SARS argued that the process under sections 180 and 184(2) constitutes administrative action, involving internal governance and an opportunity for the third party to respond. The High Court agreed, finding these actions reviewable under PAJA, not only procedurally but also substantively (for reasonableness and errors of law or fact). As such, a court remains the ultimate arbiter, and section 34 was not infringed.

Section 186(3) TAA – Repatriation Orders and Rights to Freedom of Movement (Section 21) and Freedom of Trade (Section 22):

Section 186(3) of the TAA allows a court, when granting a repatriation order for foreign assets, to also limit travel, withdraw business authorisations, or require cessation of trading.

Mr. Greyvensteyn argued that section 186(3) unjustifiably infringed his rights to freedom of movement and trade.

SARS’s Justification and the Court’s Findings in Greyvensteyn:

SARS argued for judicial oversight in granting such orders, aimed at preventing asset dissipation. The High Court found an infringement of sections 21 and 22 but held it justifiable under section 36 of the Constitution. It balanced these rights against the public interest in tax collection, noting the curator’s oversight as a safeguard and the court’s discretion under section 186(3)(d) to issue less restrictive orders if appropriate.

Jurisdiction in tax disputes: The evolving landscape and the impact of Section 105 TAA

The Greyvensteyn judgment touched upon jurisdiction, as the challenge to SARS’s section 180 determination did not fit the typical assessment-appeal route to the Tax Court. This highlighted the High Court’s role in constitutional challenges and PAJA reviews. The landscape of High Court jurisdiction in tax matters has been significantly clarified by the subsequent judgment of the CC in United Manganese of Kalahari (Pty) Limited v CSARS and four other cases[3], as analysed in the Renmere Tax Flash of 11 April 2025.

The Constitutional Court’s pronouncements on Section 105 TAA

Section 105 of the TAA states: “A taxpayer may only dispute an assessment or decision as described in section 104 in proceedings under this Chapter, unless a High Court otherwise directs.” The CC’s judgment in United Manganese provided critical interpretations:

1. Necessity of a Section 105 direction

A taxpayer wishing to dispute an assessment or a section 104 decision (e.g. an objection decision) in the High Court via review or declaratory relief must first obtain a direction from the High Court under section 105. This was affirmed in the UMK, Rappa Resources, and Forge Packaging portions of the CC judgment.

2. Conditional suspension of jurisdiction

Section 105 does not oust the High Court’s jurisdiction outright but conditionally suspends it until a direction is granted. The Tax Court remains the primary forum.

3. Timing of the direction

The direction should be sought at the threshold of the High Court proceedings.

4. Test for granting a direction

The High Court must determine if there is justification for departing from the default remedy provided by the Tax Court. This is a less stringent test than “exceptional circumstances” and involves assessing appropriateness or good cause.

5. Factors for consideration by the High Court

• Exhaustion of Internal Remedies: Whether an objection has been lodged and disallowed. For review cases, the objection process is an internal remedy under section 7(2) of PAJA.
• Nature of the Dispute: Whether the application raises a pure point of law (more suitable for High Court, as seen in the Absa Bank portion of the CC judgment involving GAAR) or factual disputes better suited for the Tax Court’s investigative powers.
• Procedural Irregularities: Serious procedural issues or malfeasance by SARS might warrant High Court intervention.
• Urgency and potential for piecemeal adjudication.

6. Declaratory relief without an assessment

In the Lueven Metals part of the CC judgment, where no assessment had yet been issued, the CC found that section 105 did not apply, and the legal question was suitable for declaratory relief in the High Court.

Implications for Greyvensteyn-type scenarios

While Mr. Greyvensteyn was not challenging an ‘assessment’ issued to him in the traditional sense (his liability arose derivatively under section 180 of the TAA), the CC’s detailed exposition of section 105 provides the overarching framework for when the High Court’s jurisdiction can be invoked in tax disputes that do involve assessments or section 104 decisions. For matters like Mr. Greyvensteyn’s direct constitutional challenge to the TAA provisions themselves, and the PAJA review of the process of a section 180 determination (which is not an ‘assessment’ appealable to the Tax Court by the third party in the same way), the High Court’s inherent review and constitutional jurisdiction remains the appropriate avenue, likely without needing a section 105 direction as it falls outside the scope of disputing a direct assessment or section 104 decision against the applicant.

In the Supreme Court of Appeal (SCA)’s earlier interpretations of section 105 (pre-CC judgment in United Manganese), reference was made to the SCA’s view in Rappa Resources that a taxpayer must first apply for the High Court to direct that it has jurisdiction. The CC judgment in United Manganese has now provided the apex court’s definitive stance on these procedural requirements.

The interplay between TAA and PAJA

The Greyvensteyn judgment strongly affirmed the applicability of PAJA to SARS’s decision-making under sections 180 and 184(2) of the TAA, classifying such decisions as administrative action. This is an important safeguard, ensuring that SARS’s actions are lawful, reasonable, and procedurally fair, and are subject to substantive judicial review.

Internal remedies and PAJA

Section 9 of the TAA allows a taxpayer to request SARS to withdraw or amend a decision or notice (excluding those that are subject to objection and appeal under Chapter 9). This raises the question of whether section 9 constitutes an ‘internal remedy’ under section 7(2) of PAJA, which generally requires exhaustion of such internal remedies before judicial review.

While taxpayers often use section 9, there is no definitive ruling that it is a mandatory internal remedy barring PAJA review if not exhausted. PAJA itself allows for exemptions in exceptional circumstances.

For a section 180 determination as in Greyvensteyn, the “representations” process under section 184(2) of the TAA is an inherent part of the administrative action. If a taxpayer is aggrieved by the final section 180 decision, a PAJA review would be the subsequent step. Whether a section 9 request to withdraw that final section 180 decision would be considered a mandatory internal remedy before a PAJA review is not explicitly settled but would depend on the specific facts and whether it offers an adequate and effective means of redress.

 

Tax Court’s quasi-review powers

One must remember that the Tax Court, while not a High Court for PAJA review purposes, possesses a “quasi-review function.” It can investigate the lawfulness of SARS’s exercise of discretionary power when considering an assessment appeal. This means that the Tax Court can address grounds coextensive with review grounds. This is an important consideration when deciding whether a section 105 direction to the High Court is truly necessary, as the Tax Court might be able to address the taxpayer’s grievance.

Conclusion and implications

The High Court in Greyvensteyn upheld the constitutionality of sections 180, 184(2), and 186(3) of the TAA, reinforcing SARS’s significant powers but emphasising that they are subject to constitutional and administrative law safeguards.

The key implications, considering both Greyvensteyn and the subsequent CC judgment in United Manganese, are:

1. Personal liability (Section 180 of the TAA): SARS’s power to determine third-party liability is an administrative action, reviewable under PAJA, ensuring judicial oversight.
2. Repatriation orders (Section 186 of the TAA): While limiting fundamental rights, such orders can be constitutionally justifiable if subject to judicial discretion and appropriate safeguards.
3. High Court jurisdiction (Section 105 of the TAA): For disputes concerning assessments or section 104 decisions, a section 105 direction from the High Court is a prerequisite for High Court review or declaratory relief. The High Court will grant such a direction if there is justification to depart from the Tax Court, particularly for pure points of law or where the Tax Court cannot provide adequate relief. For direct constitutional challenges or PAJA reviews of administrative actions not constituting an ‘assessment’ against the applicant (like the section 180 process in Greyvensteyn), the High Court’s inherent jurisdiction remains directly accessible.
4. PAJA as a cornerstone: PAJA is central to ensuring fairness in SARS’s exercise of its powers under the TAA. Taxpayers should be mindful of procedural requirements, including the exhaustion of internal remedies where applicable and effective.

The evolving jurisprudence, particularly the CC’s guidance in United Manganese, provides greater clarity for taxpayers navigating the complex terrain of tax disputes. While SARS has formidable tools for tax collection, these tools must be wielded within the firm boundaries set by the Constitution and the principles of administrative justice.

[1] (B2495/2023) [2025] ZAGPPHC 128 (12 February 2025)

[2] ([2025] ZACC 2).

[3] ([2025] ZACC 2).