Tax cases – High Court

The appellant, Puma Energy Procurement South Africa (Pty) Ltd (“Puma”) is a licensed and limited risk distributor of fuel for the purposes of section 64F of the Customs and Excise Act No 91 of 1964 (“CE Act”). For the period 2011 to 2015, Puma sourced and purchased from South African refineries for resale to customers outside South African borders. Puma was required to pay an amount representing excise duties and levies. In terms of the CE Act, an exporter of fuel, when complying with the requirements, could be entitled to a refund of these excise duties or levies paid. Puma claimed such a refund, but the South African Revenue Services (“SARS”), rejected the claims since it was claimed outside the two-year period allowed in terms of section 76 B of the CE Act. Puma then resorted to claiming these rejected levies and duties as a loss in its 2015 income tax return in terms of section 11(a) of the Income Tax Act No 58 of 1962 (“IT Act”). SARS disallowed the deduction and levied understatement penalties at the rate of 10 percent. Puma lodged an appeal to the Tax Court. SARS argued that Puma wanted to circumvent the prescription of the customs refunds by claiming the prescribed claims in the income tax return. The Tax Court confirmed the additional assessment raised by SARS, stating that prescription was applicable to the claim for a deduction of losses in terms of section 11(a) of the IT Act.