X and Another v Commissioner for the South African Revenue Service (A117/2025) [2026] ZAWCHC (16 April 2026)

The Western Cape High Court (Full Bench) has confirmed that taxpayers objecting to an assessment, including an estimated assessment, must submit all documents required to substantiate their grounds of objection, regardless of whether there was an estimated assessment by SARS. The general position is that SARS bears the burden of proving that an estimated assessment is reasonable, given that the estimated assessment was issued by SARS based on information at its disposal. The Court has now held that the burden of proof on SARS does not exempt the taxpayer from an evidentiary obligation when objecting. A conditional offer of access to records, or a promise to deliver documents later, is insufficient. The judgment reinforces SARS's ability to invalidate non-compliant objections and confirms that procedural compliance is as important as the substantive merits. We note from the outset that section 95 of the Tax Administration Act 28 of 2011 ("TAA") has been amended and that an objection cannot now be submitted directly following an estimated assessment. If SARS issues an estimated assessment now, please feel free to reach out to us.

Facts and Context

The taxpayers, a specialist neurologist and his incorporated medical practice, were audited by SARS for income tax, donations tax and VAT. SARS repeatedly requested access to the practice's Healthbridge Electronic Medical Records System ("Healthbridge System") to verify information supplied. Access was refused. SARS issued estimated additional assessments under section 95 of the TAA.

In October 2022, the taxpayers filed their first objection to the estimated assessments ("First Objection"), which became the subject of an application to the Tax Court. The First Objection was withdrawn in August 2023 following promulgation of the Rules Prescribing Procedures for Lodging an Objection and Appeal ("2023 TAA Rules"). The 2023 TAA Rules materially amended Rule 7(2)(b)(iii). Under the prior rules, taxpayers were only required to "specify" the documents supporting their grounds of objection; however, the 2023 TAA Rules replaced "specify" with "submit", requiring taxpayers to deliver those documents with the objection, to the extent not previously provided to SARS.

On 14 August 2023, the taxpayers filed a second objection ("Second Objection"), stating that the amended Rule 7(2)(b)(iii) applied. The Second Objection attached three schedules compiled by the taxpayers and their advisers, being a loan account reconciliation, a debtors' age analysis and a VAT schedule. For one key category of supporting evidence, however, the taxpayers merely tendered "electronic access" and offered limited access to records to the Healthbridge System rather than submitting the underlying data. SARS issued a notice of invalid objection under Rule 7(4) for non-compliance with Rule 7(2)(b). The taxpayers applied to the Tax Court under Rule 52(2)(b) for an order declaring the Second Objection valid. The Tax Court dismissed the application, and the taxpayers appealed.

The issue before the court was the proper interpretation of Rule 7(2)(b)(iii) of the 2023 TAA Rules, which requires a taxpayer to "submit" documents needed to substantiate an objection, and specifically whether this obligation applies where SARS, not the taxpayer, bears the burden of proving reasonableness under section 102(2) of the TAA.

Judgement

The Full Bench dismissed the appeal on three grounds.

Firstly, the burden of proof under section 102 of the TAA is irrelevant at the objection stage. Whether the taxpayer (section 102(1)) or SARS (section 102(2), in the case of estimated assessments) bears the onus is a question that arises only in appeal proceedings before the Tax Court. It does not reduce the procedural requirements for a valid objection.

Secondly, the 2023 TAA Rules draw no distinction between ordinary and estimated assessments in the documentary burden imposed on taxpayers. Section 95(4) of the TAA confirms that an estimated assessment does not relieve a taxpayer of the continuing duty to submit returns and relevant material. The purpose of Rule 7(2)(b)(iii) is to ensure SARS has the information it needs to properly assess and make a decision based on the objection. The court held that the purpose is even more compelling where the taxpayer's own failure to produce records is what made an estimation necessary.

Thirdly, the documentary requirement under Rule 7(2)(b)(iii) is objective. Taxpayers have no subjective discretion over adequate substantiation. Here, the taxpayers themselves identified the Healthbridge System as the material required to support the Second Objection. SARS held them to their own tender. By making access impossible, the taxpayers failed to submit the documents they had acknowledged were required. Furthermore, the Second Objection attacked the correctness of the estimated assessments rather than their reasonableness, the standard applicable to estimated assessments, yet lacked the records to do so.

Moreover, the Court confirmed that Rule 52(2)(b) of the 2023 TAA Rules is not a review mechanism. A taxpayer seeking relief under that Rule must satisfy the Tax Court de novo that the objection is valid; identifying flaws in SARS' reasoning alone is insufficient.

Conclusion

Taxpayers and advisers should not assume that SARS’ burden to prove the reasonableness of an estimated assessment permits a minimalist approach to objections. This judgment confirms that a valid objection must be complete, specific, and supported by the documents needed to substantiate each ground of the objection.

If a taxpayer fails to lodge a valid objection, and the defect is not remedied, the assessment may become final under section 100(1)(b) of the TAA. While Rule 52(2)(b) provides a remedy to challenge SARS’ decision to invalidate an objection, the taxpayer bears the burden of persuading the Tax Court afresh that the objection satisfies the requirements of Rule 7.

The key takeaway is that taxpayers should treat the objection stage as the first substantive evidentiary step in a tax dispute, not merely as an administrative gateway to litigation. Before lodging an objection, taxpayers should ensure that all relevant supporting records have been identified, documentary gaps have been addressed, and the grounds of objection are aligned with the available evidence. Where electronic records form part of the substantiation, taxpayers should also ensure that SARS is afforded meaningful access.

If you are dealing with an estimated assessment or preparing an objection, contact us before you file. A properly substantiated objection is the difference between a dispute based on the merits and an assessment that becomes final.