VAT Refund Battle: Taxpayer vs NamRA in Court
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What happens when you’re owed a VAT refund, but the tax authority uses that money to cancel out other debts you might owe?
That’s exactly what happened in the case between Stuttafords Stores Namibia and the Namibian Revenue Agency (NamRA).
The Background
Stuttafords, the taxpayer, applied for a VAT refund under section 38 of the VAT Act. However, instead of paying out the refund, NamRA applied a set-off, using the refund amount to settle other tax debts they claimed Stuttafords owed. Stuttafords disagreed with this move, arguing that NamRA had no legal basis to withhold the refund in this way, and took the matter to court to have the decision reviewed and overturned.
NamRA’s Defence
Rather than tackling the refund issue head-on, NamRA raised three technical defences (known as special pleas):
The court doesn’t have the power to hear the case.
The taxpayer used the wrong legal process, they should have gone another route.
They should’ve asked for a direct order (mandamus) instead of a review.
The Court’s Ruling
The court dismissed all of NamRA’s special pleas, clearing the way for the main case to proceed. In doing so, the judge made a few early comments on the tax issues, but made it clear these weren’t final rulings on the actual dispute. Those remarks couldn’t be used to block the case from moving forward.
The Amendment Attempt
After losing the special pleas, NamRA tried to change their original defence. Stuttafords objected, saying the change came too late and wasn’t made in good faith. The court allowed only the parts of the amendment that raised real, triable issues, and NamRA was ordered to cover the costs of the amendment application.
The court said:
Some changes were allowed, if they helped clarify the real issues.
But changes that didn’t raise real disputes were rejected.
NamRA must pay costs for the amendment application.
Key Takeaways
Taxpayers are not powerless when facing set-offs. If the tax authority withholds a refund without proper justification, it can be challenged. Courts look beyond legal tactics to get to the heart of the matter, and aren’t afraid to call out weak or untimely defences.
✅ Just because SARS (or NamRA) says you owe money, doesn’t mean they can always grab your refund.
✅ Courts need to look at the full picture, not just technicalities.
✅ Procedural tactics can’t replace real answers on the facts.
