Two recent judgments of the Tax Court had markedly different outcomes, which brought into question the applicability of condonation principles. These decisions bring into focus an issue that practitioners will recognise instinctively, yet which is seldom articulated so directly in the case law: the apparent variability in how condonation principles are applied, depending on the context in which they arise.

A comparison between Taxpayer EV v The Commissioner for the South African Revenue Service IT 25180 (9 December 2025) (“Taxpayer EV”) and The Commissioner for the South African Revenue Service v Taxpayer 3C VAT 12167 (12 March 2026) (“Taxpayer 3C”) reveals a notable divergence in approach. In one matter, the taxpayer is required to meet a demanding and multi-layered standard, ultimately failing despite a minimal delay. In the other, Sars overcomes a delay spanning several years and is nevertheless granted condonation.

This contrast raises an important question for taxpayers and advisors alike, whether condonation in the Tax Court operates with consistent application across different litigants. 

The Taxpayer’s Uphill Battle

In Taxpayer EV, the taxpayer sought condonation for the late filing of an expert notice and summary. The delay itself was a single day in each instance.

On its face, this would appear to fall within the category of procedural non-compliance that courts often overlook in the interests of justice. However, the Court’s analysis extended well beyond the narrow period of delay.

The taxpayer was required to account not only for the one-day non-compliance, but for a broader period spanning several years during which the expert report had already been available but not filed. The explanation advanced, namely budgetary constraints, was rejected as insufficient. The Court went further, characterising the taxpayer’s conduct as tactical and reactive, particularly in light of the timing of its filings following Sars’s own expert disclosures.

The enquiry then expanded to the taxpayer’s bona fides, including a lack of candour in initially denying that condonation was required. Most significantly, the Court examined the substance of the expert evidence itself, concluding that it was largely inadmissible as it ventured into legal interpretation rather than providing proper expert assistance.

This proved decisive. The absence of probative value in the proposed evidence meant that the taxpayer could not demonstrate prospects of success, and condonation was refused.

What emerges is that condonation, in this context, was not confined to explaining delay. It became an extensive inquiry into the entirety of the litigant’s conduct, strategy, and underlying case.

Sars and the Elasticity of Delay

The position adopted in Taxpayer 3C stands in contrast.

In this matter, Sars filed its Rule 31 statement approximately four years out of time, a delay that was substantial by any measure.

Sars’s explanation rested on the medical incapacity of the responsible official, combined with internal capacity constraints and an administrative failure to reassign the matter. While the Court acknowledged both the length of the delay and the prejudice to the taxpayer, it nevertheless accepted the explanation as satisfactory.

The Court then turned to broader considerations, including the importance of proper tax administration and the need for disputes involving public revenue to be fully ventilated. It also considered the apparent merits of Sars’s underlying case, noting weaknesses in the taxpayer’s VAT position.

On this basis, condonation was granted. Although Sars was ordered to pay costs, the practical effect of the judgment is that its extensive non-compliance was excused and the matter proceeds on the merits.

Two Approaches, One Principle

Both judgments apply the same established condonation principles, including the need for a full explanation, bona fides, prospects of success, and consideration of prejudice and the interests of justice. Yet their application reflects a discernible difference in emphasis.

In Taxpayer EV, the taxpayer was required to provide a comprehensive explanation covering years of conduct, demonstrate procedural diligence, and establish that its evidence would meaningfully assist the Court. The enquiry was rigorous, layered, and ultimately unforgiving.

In Taxpayer 3C, the Court adopted a more flexible approach. Despite a delay of several years, a relatively general explanation was accepted. The shortcomings in that explanation were balanced against the perceived importance of the matter and the broader public interest in tax collection.

The Role of the Merits and the Interests of Justice

A key point of divergence lies in how the courts approached the merits.

In the taxpayer’s case, weak or inadmissible evidence effectively precluded condonation. The merits operated as a limiting factor. In Sars’s case, the merits operated as a supporting consideration, favouring the grant of condonation despite procedural failings.

Similarly, the invocation of the interests of justice appears to carry different practical implications depending on the circumstances. For the taxpayer, it reinforced the need for strict compliance and evidentiary integrity. For Sars, it supported allowing the matter to proceed notwithstanding significant delay, in order to ensure that the dispute is determined substantively.

Explaining the Divergence

The differing outcomes may be understood through several underlying considerations.

There is a clear public interest in ensuring that tax disputes are determined on their merits, particularly where public revenue is implicated. Courts may therefore be reluctant to dispose of matters involving Sars on procedural grounds where this would prevent a full adjudication of the tax liability.

There is also recognition of institutional realities, including capacity constraints and administrative burdens, which may inform a more accommodating approach in certain instances.

At the same time, taxpayers are expected to maintain a high degree of procedural discipline, particularly where their conduct may be perceived as strategic or where the evidentiary foundation of their case is uncertain.

Implications For Taxpayers

For taxpayers and their advisors, the message is clear. Procedural compliance must be approached as a substantive requirement. Even minimal delays can trigger extensive judicial scrutiny, particularly where there are weaknesses in the underlying case.

Explanations must be comprehensive, candid, and address the full period of non-compliance. Importantly, condonation should not be viewed as a mechanism to remedy deficiencies in evidence or litigation strategy.

At the same time, these judgments reflect that the application of condonation can differ depending on the circumstances. While Sars may still face adverse cost orders, it may nonetheless be afforded greater latitude where broader systemic or public interest considerations are engaged.

Written by André Daniels, Head of Tax Controversy & Dispute Resolution at Tax Consulting SA