A high-stakes legal showdown is brewing between one of South Africa’s major fuel suppliers and the country’s tax authority, with R2.7 billion on the line.
Astron Energy has launched legal action against the South African Revenue Service (SARS) in a bid to overturn a massive tax assessment arising from a customs and excise audit conducted several years ago.
Background: The Origin of the Dispute
The dispute dates back to a SARS audit of Astron Energy’s operations between May 2015 and March 2017, during a period before Glencore acquired the company. Following the audit, SARS issued a letter of demand in October 2019, accusing Astron of underpaying excise duties and fuel levies. The tax body claims the company owes a staggering R2,714,001,723.73, including interest and penalties.
SARS has refused Astron’s attempts to offset the alleged liability with refund claims for what the company says were overpaid tax amounts during the same period. The refusal prompted Astron to escalate the matter legally.
Astron’s Position: Disputing the Bill
Astron maintains that the tax bill is both legally unfounded and factually flawed. The company argues that the assessment was unfair and that SARS’ refusal to honor its refund claims only exacerbates the injustice.
In court documents, Astron asserts that the revenue service misapplied relevant tax laws and disregarded important financial evidence that would have reduced or eliminated the liability altogether.
To challenge SARS’ position, Astron approached the Western Cape High Court, seeking relief through either a direct appeal of SARS’ assessment or a judicial review to have the decision set aside.
In response, SARS attempted to derail the case by filing procedural exceptions. The tax authority argued that Astron’s legal submissions lacked critical factual detail, contained legal misinterpretations, and failed to follow required procedures.
However, Judge Moosa of the Western Cape High Court dismissed SARS’ objections, ruling that the case should proceed to trial.
What the Court Will Decide
The upcoming trial will focus on two pivotal issues:
- Is Astron legally obligated to pay the full R2.7 billion?
- Are Astron’s claims for tax refunds valid and enforceable?
The case could set a precedent for how SARS handles large-scale tax assessments involving fuel and excise duties and may have broader implications for the oil and gas sector in South Africa.
High Stakes for Both Sides
For Astron Energy, a loss in court could mean a crippling financial blow and reputational damage. For the revenue, the case is a test of its authority and auditing methods—especially in a sector critical to the national economy.
As the trial date approaches, legal and financial observers will be watching closely to see whether the court sides with the state’s tax collector or one of the country’s leading fuel providers in this multi-billion rand battle.
Related article: Petrol Pain for SARS: Fuel Levy Collections Drop 6.3%, but Revenue Exceeds Expectations
