It is not easy to obtain an order for costs in the tax court, still less to get a punitive one against the South African Revenue Service (SARS). The Income Tax Act provides five grounds on which costs may be awarded against either taxpayer or SARS, and it was in terms of subsection (a), "the claim of the Commissioner is held to be unreasonable", that the Gauteng tax court recently awarded, not merely costs, but costs on the attorney and client scale against SARS in ITC 1816 69 SATC 62. This is the most punitive scale of fees that a court can impose and is used only when the court wishes to express its extreme displeasure with a litigant.
The facts were that the taxpayer, a Chartered Accountant (SA), was employed as a structured finance specialist and head of the business and market development division of a company in the banking sector from November 1995. In 1999 she and her employer commenced discussions, initiated by the employer, to enter into a restraint of trade agreement,
