THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

Reportable

Case No: 438/2001
In the matter between:

Dr I M Hassim

Appellant

and

The Commissioner South African Revenue Services           Respondent

Coram:
Howie, Streicher, Farlam, Cameron, JJA, and Lewis, AJA

Heard:
12 November 2002
Delivered: 26 November 2002

Income Tax Special Court - appeal – s 86A of the Income Tax Act 58 of 1962 –
meaning of ‘any decision’.

J U D G M E N T

STREICHER, JA/

STREICHER JA:
[1] The appellant appealed to the Natal Income Tax Special Court
against the disallowance of his objections to assessments to tax by the
respondent in terms of the Income Tax Act 58 of 1962 (‘the IT Act’) and
the Value-added Tax Act 89 of 1991 (‘the VAT Act’). At the
commencement of the hearing of the appeals the appellant applied for an
order compelling the respondent to make discovery. The court a quo held
that such an order could not be made as the appellant had failed to state the
grounds of his objection to the assessments made by the respondent in clear
and definite terms. This finding of the court a quo led to its granting to the
appellant, of its own accord, leave to amend his notices of objection and
appeal. With the leave of the court a quo the appellant now appeals against
the judgment in terms of which the court a quo granted such leave.

[2] Regulation B3 of the regulations promulgated in terms of s 107 of
the IT Act requires the respondent to prepare, for submission to the Income
Tax Special Court, a dossier containing a short statement of the case and
copies of the relevant assessment, the notices of objection and appeal and
the correspondence relating thereto. The respondent prepared such a
dossier in respect of both the income tax appeal and the value-added tax
appeal.
[3] According to the dossier in respect of the value-added tax appeal the
appellant is a medical practitioner registered as a vendor in terms of the
VAT Act. An investigation by the respondent in terms of the VAT Act
revealed that the appellant operated two undisclosed bank accounts in
which money received from various medical aid schemes, during the period
June 1995 to February 1997, was deposited. These receipts had not been
disclosed in the value-added tax returns furnished by the appellant. As a

result the respondent issued an assessment, based on those receipts, of the
value-added tax and the additional tax payable by the appellant.
[4] According to the dossier prepared by the respondent in respect of the
income tax appeal  an investigation into the appellant’s income tax affairs
revealed that the appellant failed to disclose income received by him during
the 1996 and 1997 tax years. In due course the appellant was assessed to
tax on the undisclosed income. Again the assessment was based on the
deposits made into the undisclosed bank accounts during the period June
1995 to February 1997.
[5] The dossiers included copies of the relevant bank statements and
deposit slips.
[6] The appellant objected to the value-added as well as the income tax
assessments. The court a quo summarized the objections as follows:
(a)
The respondent failed to apply his mind properly.

(b)
The respondent’s ‘claim’ had ‘prescribed’.
(c)
The respondent took account of irrelevant matters.
(d)
The respondent acted ultra vires.
(e)
The
respondent
failed
to
consider
the
appellant’s
representations.
(f)
The respondent’s view that there was additional or
undisclosed income was ‘without any factual basis’ and the
documents relied on by the respondent were capable of
‘various alternative interpretations’ and were ‘not evidence of
income derived’.
(g)
The respondent failed to comply with the provisions of ss 32
and 33 of the Constitution.
[7] The respondent disallowed the objections whereupon the appellant
appealed to the court a quo. The matters were then consolidated, and after

postponements, set down for hearing on 17 April 2001. Shortly before the
date upon which the matters were set down for hearing the appellant
notified the respondent that he required proper discovery. The respondent’s
response was that discovery proceedings as provided for under the
Magistrate’s Court Act rules did not apply but proposed that a pre-trial
conference be held at which discovery and other relevant matters could be
discussed. The proposal was not acceptable to the appellant who required
that a full discovery be made.
[8] At the hearing of the appeal the appellant sought an order compelling
the respondent to make discovery of all documents which related to the
appellant. In its judgment dealing with the application for discovery the
judge a quo referred to regulation B4 promulgated in terms of s 107 of the
IT Act which provides as follows:

‘Save as in these regulations is otherwise provided, the general
practice and procedure of the Court shall be that of a magistrate’s
court in so far as such practice and procedure are applicable.’

He stated that discovery was a procedure which was available in the
magistrate’s court and that, in view of regulation B4, there seemed to him
no reason why discovery should be excluded as a procedure applicable in
the Income Tax Special Court. He also stated that there were provisions in
the Constitution ‘which, although not by means of formal discovery,
warrant the right of access to documents’ but considered it unnecessary to
go into those provisions because he was prepared to assume that formal
discovery was a procedure available to a taxpayer and to the respondent in
the Income Tax Special Court. On that basis the court a quo was of the
view that an order for discovery could only be made in respect of such
documents as were relevant to the issues between the parties because –
‘rule 23(1) of the Magistrates’ Courts Rules, which would be the
source of the Income Tax Court’s power to make the order, provides

that the only documents that must be discovered are those in a
party’s possession or under his control “which relate to the action
and which he intends to use in the action or which tend to prove or
disprove either party’s case”.’

[9] In the court a quo’s view the appellant failed to state his objections
to the assessments in clear and definite terms with the result that it could
not be determined what the issues were and consequently what documents
needed to be discovered. As a result it granted the appellant leave to amend
his notices of objection. The appellant appealed against the whole of the
court a quo’s judgment while the respondent submitted that the matter was
not appealable.
[10] Section 86A(1) of the IT Act reads:
‘The appellant in a special court or the Commissioner may in the
manner hereinafter provided appeal under this section against any
decision of that court.’

The words ‘any decision’ are also used in s 21 of the Supreme Court Act 59
of 1959. In the case of s 21 it was held that the ‘decision’ referred to must

be a decision of the same nature as a ‘judgment’ or ‘order’ in the sense in
which those terms are used in s 20 of the Supreme Court Act (see Law
Society, Transvaal v Behrman 1981 (4) SA 538 (A) at 546E).  A
‘judgment’ or ‘order’ referred to in s 20 does in general not include ‘a
decision which is not final (because the Court of first instance is entitled to
alter it), nor definitive of the rights of the parties nor has the effect of
disposing of at least a substantial portion of the relief claimed in the main
proceedings’ (see Zweni v Minister of Law and Order 1993 (1) SA 523 (A)
at 536B).
[11] I do not think that the phrase ‘any decision’ in s 86A should be
interpreted differently and neither of the parties contended otherwise. To
interpret the phrase literally would be at odds with the generally accepted
view that it is in general undesirable to have a piecemeal appellate disposal
of the issues in litigation and that it is advisable to limit appeals in certain

respects (see  Pretoria Garrison Institutes v Danish Variety Products (Pty)
Ltd 1948 (1) SA 839 (A) at 866 to 871; Guardian National Insurance Co
Ltd v Searle NO 1999 (3) SA 296 (SCA) at 301B-D). In  Pretoria Garrison
Institutes Schreiner JA said (at 867-868):
‘A wholly unrestricted right of appeal from every judicial
pronouncement might well lead to serious injustices. For, apart from
the increased power which it would probably give the wealthier
litigant to wear out his opponent, it might put a premium on delaying
and obstructionist tactics.’

In Guardian National Insurance Co Ltd Howie JA said (at 301C) that it is
generally desirable for obvious reasons that the issues in litigation be
resolved by the same Court and at one and the same time and added:
‘Where this approach has been relaxed it has been because the
judicial decisions in question, whether referred to as judgments,
orders, rulings or declarations, had three attributes. First, they were
final in effect and not susceptible of alteration by the court of first
instance. Secondly, they were definitive of the rights of the parties,
for example, because they granted definite and distinct relief.
Thirdly, they had the effect of disposing of at least a substantial
portion of the relief claimed.’

[12] The appellant submitted that the appeal should succeed on two
grounds. He submitted firstly that, in terms of s 32 of the Constitution read
with item 23(2)(a) of Schedule 6 thereto (the access to information
provision), he was entitled to all documents in the possession of the
respondent in order to properly formulate his objection and that the effect
of the court a quo’s judgment was to refuse him such entitlement. He
submitted secondly that the court a quo in effect prematurely dismissed
some of the grounds of his objections. According to him such refusal and
dismissal constituted final decisions which were appealable. I shall deal
with the two grounds in turn.
[13] In my view there is no merit in the appellant’s contention that the
court a quo refused to order a disclosure of documents required by the
appellant to formulate his objection. The court a quo never even addressed
the question whether the appellant was entitled to disclosure of all the

documents in the respondent’s possession before properly formulating his
objection. All the indications are that the question referred to was not
addressed by the court a quo because it was not an issue before it.
[14] After the matter had been set down for hearing in the court a quo the
respondent wrote to the appellant:
‘[Y]our client has baldly suggested that the bank statements and
deposit slips . . . do not reflect turnover or income, and are “capable
of different interpretations as to value”. Despite request, your client
advances no facts (in particular, no records) in support of these
suggestions.’

In reply the appellant did not state that he required documents in order to
properly formulate his objection but stated that his grounds of appeal were
in the notice of appeal. Shortly before the date on which the matter was to
be heard by the court a quo the appellant requested the respondent ‘to make
proper discovery’ and stated, not that such discovery would enable him to
properly formulate his objection but that it was ‘essential to enable

argument on the points of law and the merits’. In two subsequent letters the
appellant reiterated that ‘discovery’ was required in order to prepare for the
hearing of the matter. From the correspondence it is therefore clear that the
issue between the parties was not whether the appellant was entitled to
disclosure of all documents in respondent’s possession so as to enable the
appellant to properly formulate his objection. The issue between the parties
was whether the appellant was entitled to discovery of documents in order
to prepare for the hearing of the matter. That was the issue addressed by the
court a quo. In effect the court a quo decided that a discovery order could
not be made until such time as the necessary detail had been provided in
respect of the appellant’s grounds of objection. In my view that decision is
not a ‘decision’ within the meaning of that word as used in s 86.
[15] The main dispute between the parties concerns the validity of the
assessments made by the respondent. The decision by the court a quo

regarding discovery is incidental to the main dispute between the parties. It
regulates the procedure to be followed in order to determine that dispute. It
is not a decision that disposes of any issue or any portion of the issue in the
main proceedings between the parties or, put differently, it does not
preclude any of the relief, which may be given at the hearing of the main
dispute. It is, therefore, a purely interlocutory decision which may be
corrected, altered or set aside by the court a quo at any time before final
judgment (see South Cape Corporation (Pty) Ltd v Engineering
Management Services (Pty) Ltd 1977 (3) SA 534 (A) at 549F – 551A;
Globe and Phoenix Gold Mining Co Ltd v Rhodesian Corporation Ltd 1932
AD 146 at 163). It follows that the decision by the court a quo in regard to
discovery is not appealable.

[16] I shall now deal with the submission that the court a quo in effect
dismissed some of the grounds of the appellant’s objections. The court a
quo said in its judgment:
‘[T]he only ground that is relevant was the one contained in (f)
above. All of the others (save for the reference in (g) to section 32 of
the Constitution which relates to the taxpayer’s claim to access to
documents and which as such cannot in any event be a proper
ground) depend for their validity upon the success of the ground in
(f); in other words they depend entirely on the fate of the ground in
(f). For practical purposes the ground in (f) is therefore the only one
that requires consideration.’

The validity of the grounds of objection was not an issue to be decided by
the court a quo and no order was made in this regard. The statement simply
formed part of the reasoning of the court a quo in respect of a non-
appealable order and does not preclude the court a quo from changing its
view in this regard. It does not constitute a ‘decision’ let alone a final
‘decision’ by the court a quo in respect of the validity of the grounds of
objection. The statement is, therefore, not appealable. See Administrator,

Cape, and Another v Ntshwaqela and Others 1990 (1) SA 705 (A) at 715D
where Nicholas AJA said:
‘There can be an appeal only against the substantive order made by a
Court, not against the reasons for judgment.’

[17] For these reasons the appeal is struck from the roll with costs.

_________________

P E Streicher

Judge of Appeal

Howie
JA)
Farlam
JA)
Cameron
JA)
Lewis        AJA)
concur