THE Commercial Court has reserved its decision in a historic legal dispute where Thabang Qathatsi, a former employee of British American Tobacco South Africa, is requesting refund from the Lesotho Revenue Authority (LRA) for the Pay as You Earn (PAYE) Tax and Fringe Benefit Tax (FBT) he claims to have been overcharged
June 21, 2023
5 min read
Ex tobacco worker continues to fight LRA for refund
Former LRA boss, Thabo Khasipe rubuffed Qathatsi's claim
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This, after the court on June 13, heard an application in which, among others, Qathatsi re-granted leave to appeal the judgement of the Revenue Appeals Tribunal of April 25, 2013.
Qathatsi of Upper Thamae, Maseru, who is an accountant by profession, worked for the tobacco company from August 1, 1996, until December 31, 2007.
The termination of his employment contract was due to medical disablement, for which compensation has not been forthcoming.
In his court papers, he declares that during the 10 years and four months he spent as an employee of that international company, the firm unlawfully deducted a total of M100,768.42 in PAYE Tax from his salary.
Upon his retirement, the company also unlawfully made him pay Fringe Benefits Tax to the value of M192 428.
Aware of the miscalculations, Qathatsi approached the LRA’s then Commissioner General, who accepted the liability and promised to pay the refund, but when the reimbursement was subsequently made, it was insufficient.
Qathatsi sought to assist the authority in correcting the blunder but was instead rebuffed by the Commissioner General.
The revenue authority has since changed its name to Revenue Services Lesotho (RSL).
The authority instead refunded him M21 169.88 from the M100 76.42 and declined to give him the remaining M79 59.54, Qathatsi’s papers show.
It also gave him a M73 021 refund from the M192 428 and refused to pay the M119 407 balance.
Therefore, the total balance the LRA owes him amounts to M199 005.54 plus interest accrued from 1996 to date, at 18.5 percent interest per annum.
But the LRA’s case is that the appellant is not owed the balance he wants.
This prompted Qathatsi to approach the Revenues Tribunal sometime in 2012 and ask it to determine whether the Commissioner General’s assessments of the Fringe Benefit Tax along with the PAYE Tax he was paid were correct.
But the tribunal ruled in favour of the LRA, deciding that the gross income figures claimed by Qathatsi were unverifiable.
The tribunal also showed that Qathatsi had failed to make a prima facie case and that he was likely to lose his claim before dismissing his application.
Following the dismissal of his appeal before the Tribunal, he instituted review proceedings, and judgement was handed down in his favour on August 21, 2014.
In 2015, the LRA filed an appeal before the Court of Appeal, and a ruling delivered on April 29, 2016 set aside the review judgement of the High Court.
Qathatsi thereafter filed a fresh matter with the Revenue Appeal Tribunal for rehearing of his appeal.
The matter was, however, dismissed on February 27, 2017 on legal grounds.
Dissatisfied with the results of the tribunal for the second time, Qathatsi appealed that judgement to the Commercial Court, but the application was dismissed on August 5, 2020, for lack of grounds of appeal.
After the dismissal of the appeal, he sought leave to appeal the decision, but the application was not heard until he appealed to the Appeal Court, which, however, struck his appeal off the roll on account of a lack of a certificate of leave to appeal.
"I aver that from the deliberatrions before the Court of Appeal, which I conducted personally, it emerged that I ought to have pursued the application for leave to appeal before I filed that appeal with the Court of Appeal," he says in his court papers.
Following that, his matter was postponed indefinitely to allow his new lawyer to study the content of the now voluminous case.
At the end of the study, the new lawyer advised Qathatsi to withdraw all pending matters, as they should not have been filed in the first place, against Qathatsi’s judgement.
Qathatsi has named the Commissioner of the LRA, the LRA, and the President of the Revenue Appeals Tribunal as respondents in the application that is before Justice Moroke Mokhesi.
"I aver that since the matter was before different courts, at some point it fell twice before some court, as narrated, and stated that the stipulated time frame within which to lodge the appeal herein lapsed, I have never lost the thrill of challenging the incorrect assessment of tax payments.
"Thus, I aver that this application and appeal herein are not meant to delay the finality of this matter but to seek a final determination of what is just and justice to my claim," he says in his court papers.
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He adds: "The honourable court would realise, and I so aver, that I have not stood inactive throughout the whole time, only that I was not benevolently and profoundly advised like now."
In its heads of argument, the revenue authority (RSL) says Qathatsi simply wants his case to be reviewed to finality and Summersault again to have it appealed to finality.
"This is an application for condonation of late filing an appeal against the decision of the Revenue Appeals Tribunal made on April 25, 2013.
"The application for review of the same decision was made before the High Court, which set aside the decision of the tribunal. The decision was later overturned by the Court of Appeal. As if that were enough, I appealed and reviewed it again to the High Court, and later, for the second time, I appealed to the Court of Appeal."
The RSL further says the parties are in total agreement about the facts that transpired in the 10 years since the decision sought to be appealed against by Qathatsi.
"The application is opposed on the basis that it does not meet the requirements of a condonation application."
The RSL also argues: "A party seeking condonation must make out a case entitled to the court’s indulgence. It must show sufficient cause. This requires a party to give a full explanation for the non-compliance with the rules or the court’s directions. Of great significance, the explanation must be reasonable enough to excuse the default."