A tax practitioner has been acquitted of all charges after he turned to the Supreme Court of Appeal following his conviction for defrauding SARS of more than R2 million.
A tax practitioner has been acquitted of all charges after he turned to the Supreme Court of Appeal following his conviction for defrauding SARS of more than R2 million.
Seshin Naraidu appealed against his conviction and six-year imprisonment sentence handed down by the Gauteng Regional Court. His sentencing was handed down without the option of a fine.
Naraidu was convicted on three counts of fraud, and three alternative charges under the Value-Added Tax Act.
According to court documents, Naraidu was accused of having “unlawfully, and with intent to defraud, misrepresented to the South African Revenue Service (SARS) that Serghony Shoes Fashion CC (SSF) had incurred expenses and was entitled to refunds”.
SSF and its sole member, were the two other accused in the matter. The sole member had not returned to court for sentencing.
According to court documents and the State’s case against the accused, they “knew that SSF was not entitled to any such refunds and that the information submitted to SARS was false”.
However, even if Naraidu is held accountable for what he wrote in the emails, it does not follow that resubmitting the documents meant he knew they were fictitious invoices or that the claim was fraudulent, the SCA found.
The refund sought was substantial, amounting to R2 748 037.
“The SARS witnesses were unable to say who had accessed the e-filing system to make the claims on behalf of SSF. But, even if Naraidu must be held to what he wrote in the emails, it does not follow that because he resubmitted the documents in support of the claim, he had any knowledge that these documents were fictitious invoices and that the claim was fraudulent,” court documents read.
SCA Justice David Unterhalter said: “There was no direct evidence of this. It was the investigations undertaken by SARS that uncovered the fraud. This was done by verifying whether there were true sales that the invoices purported to record. There were not. But there was no evidence that Naraidu knew this to be so. It cannot be inferred that because he submitted the documents on behalf of SSF, he thereby represented that they recorded transactions that supported the VAT refund, knowing that they were fictitious. Once that is so, the State failed to prove beyond reasonable doubt that Naraidu had the intent to defraud SARS.
“That Naraidu acted recklessly is plainly the case. He lent his efforts to secure the payment of a fraudulent claim. But absent proof beyond reasonable doubt that he knew the claim to be fraudulent, he cannot be said to have made himself party to the fraud.
There is an absence of proof that Mr Naraidu had the intention required to be guilty of fraud. His conviction on the charges of common law fraud...must be set aside,” said Judge Unterhalter.
Cape Times