There is a particular move that, in my experience, appears with some regularity in tax disputes.
An assessment is issued on one basis. Ground is lost in objection. And then — when the matter reaches the Tax Court — the case presented in the Rule 31 statement begins to look materially different from the case that gave rise to the assessment in the first place.
For some time, that approach may have found occasional traction. Recent judgments suggest that courts are becoming increasingly unwilling to permit it. BASF v CSARS is the clearest statement yet that what matters is the assessment that was issued — not the one that could have been.1
That theme has, frankly, been building for some time. I made much the same point in Erasmus: Rule 31 Is Not A Second Chance To Invent A New Assessment, where the focus was the SCA’s unwillingness to let SARS reshape its case at pleading stage. I also dealt with the same mischief from a slightly different angle in A Cautionary Tale For SARS: Novation, Rule 31, And The Perils Of Shifting Grounds, and, long before BASF, I had already raised the separate but related problem in The Word “Or” In Tax Court Rules: Can We Just Ignore It? — namely that Rule 31(3) contains two prohibitions, not one.
BASF now brings all of that together.
It is the clearest statement yet: Rule 31 is not a second chance to invent a new assessment!
And it does more than that. It reshapes three areas of Tax Court practice: when you can appeal a Tax Court pleading ruling; how far SARS can go under Rule 31; and how far a taxpayer can go under Rule 32.
How a transfer pricing case became a pleading case
At its core, BASF is a standard transfer pricing dispute.
BASF South Africa purchased platinum group metals from its Swiss-related party and used those inputs to manufacture catalytic products. SARS issued an additional assessment for the 2011 year of assessment under section 31 (pre-2012), applying a TNMM / cost-plus methodology. BASF objected.
So far, nothing unusual.
The real dispute arose later — in the pleadings.
In the Tax Court, SARS sought to amend its Rule 31 statement to introduce three entirely new benchmarking studies and an additional “MNE group synergies” ground. BASF, for its part, sought to amend its Rule 32 statement to introduce corrections to EBIT and a ground relating to OEM compensation.
The Tax Court allowed SARS’s amendments and refused BASF’s.
That decision went on appeal.
And what followed is, in my view, a very important procedural tax judgment.
Appealability: Lion Match was not the last word
For years, practitioners may have believed that you cannot appeal Tax Court rulings on new grounds in SARS’ Rule 31 statements.
The authority for that proposition is Lion Match Company (Pty) Ltd v Commissioner for the South African Revenue Service (301/2017) [2018] ZASCA 36 (27 March 2018).2
And to be fair — Lion Match did say exactly that.
It involved a Rule 31 dispute. The SCA said the ruling was not appealable. End of story.
Except, it turns out, it may not have been.
What BASF does differently
BASF does not say Lion Match was wrong.
It simply asks a different question, with the benefit of the subsequent jurisprudence on the issue.
The court adopts the framework developed in ITC 1813 69 SATC 79 (Black Mountain Mining) and later endorsed by the SCA in Commissioner for the South African Revenue Service v Virgin Mobile South Africa (Pty) Ltd (1303/2023) [2025] ZASCA 77.3
On that approach, a decision is appealable if it arises from a procedural matter under the Rules and is final in effect, unalterable and definitive of rights.
The Black Mountain test therefore requires two questions to be answered in the affirmative:
First: is this a procedural matter under the Rules?
Second: is it final in effect?
Why a Rule 31 amendment qualifies
BASF answers both questions affirmatively and decisively.
A Rule 31 amendment is not just case management. It is a Rules-based procedural mechanism that determines what case SARS is allowed to run.
That is why BASF matters. Once the amendment is granted, the taxpayer is compelled to meet that case and the Tax Court will not ordinarily revisit whether the pleading was competent. That is “final in effect” in the Black Mountain / Virgin Mobile sense.
The Free State move (this is the real unlock)
The court then brings in Commissioner for the South African Revenue Service v Free State Development Corporation (Pty) Ltd [2023] ZASCA 84.4
Free State is not a pleading case. It is a competence case.
But BASF uses it to reinforce the finality leg of the appealability enquiry: where the real question is whether the Tax Court had the power under the rules to permit the pleading at all, that issue is effectively final unless corrected on appeal.
That is the move Lion Match did not make!
I have written before about Lion Match itself in The Lion Match Case: Should SARS’ Case Not Have Gone Up In Flames?. BASF does not erase Lion Match. But it does narrow its practical reach. The point now is not simply whether the ruling arose before the trial. The point is whether the ruling is one that fixes the battlefield. If it does, BASF says it can be appealed.
And, to my knowledge, BASF is the first post-Lion Match judgment where a Tax Court ruling allowing SARS to persist with or amend its Rule 31 case has been successfully taken on appeal and overturned.
Rule 31: SARS cannot reinvent its assessment
This is where BASF really matters.
Rule 31(3) provides that SARS may include in its statement a new ground or new basis of assessment, unless it constitutes a novation of the whole of the factual or legal basis of the disputed assessment or requires the issue of a revised assessment.
Two prohibitions. Not one.
That second point matters, and I have said so before in The Word “Or” In Tax Court Rules: Can We Just Ignore It?. The disjunctive wording in Rule 31(3) means a taxpayer should win even if novation cannot be shown, provided the new pleaded case would require revised numbers. BASF itself succeeds on novation. But the logic of the judgment arguably supports the independent force of the revised-assessment limb too.
What SARS tried to do in BASF was straightforward enough. It attempted to replace its original benchmarking with three new studies and introduce a new MNE synergies ground. In other words: new data, new comparables, new analytical framework, new legal hook.
The court’s response was, in substance, devastating for SARS. It held that the new case was not a mere amplification of what had come before. It was materially different.
This is not refinement. This is replacement.
On the legal side, the original case was an adjustment to “consideration” under section 31. The amended case relied on “MNE group synergies”. That is not the same legal basis.
On the factual side, the original assessment rested on one benchmarking study. The amended case relied on three new studies, different comparables and different data. Again — not refinement. Replacement.
That seems to be why in BASF, the court parts company with Taxpayer v Commissioner for the South African Revenue Service (Case No 45840, Tax Court) (unreported).5
In that case, the Tax Court treated the move from CUP to PSM as merely analytical and therefore not part of the factual basis and that there was no novation. BASF takes a more realistic view. In transfer pricing cases, methodology, benchmarking and comparables are not floating abstractions. They are part of the factual foundation of the assessment itself.
Even if one accepts the Taxpayer SC approach on novation, however, both cases should still fail on a different ground. Rule 31(3) does not only prohibit novation. It also prohibits amendments that require the issue of a revised assessment. If your new Rule 31 case yields different numbers, you are no longer defending the same assessment. You are creating a new one.
That is impermissible — whether or not you can label it “novation”.
This is not a once-off: the courts are pushing back
BASF is not happening in isolation. I can see a pattern emerging.
In IT 25209 (2025) (Tax Court, unreported), SARS initially accepted the factual link between development fees and financing and later, in its Rule 31 statement, reversed course and said the taxpayer had not proven that link. The Tax Court held that this amounted to a novation of the entire factual and legal basis of the assessment.6
That judgment was the focus of A Cautionary Tale For SARS: Novation, Rule 31, And The Perils Of Shifting Grounds, and it sits neatly alongside BASF as another example of the courts refusing to let SARS change horses mid-race.
Then came Commissioner for the South African Revenue Service v Erasmus (864/2024) [2026] ZASCA 22 (5 March 2026).7
The SCA was more measured on the label “novation”, but it still held that SARS’s reformulated case would require a revised assessment. The language is slightly softer. The message is not.
That point ties directly back to Contradictory Views By Tax Court And SARS: What Now?, where the concern was not only what SARS says in formal guidance or an assessment, but what happens when that position later shifts in litigation. BASF, IT 25209 and Erasmus all point in the same direction: the more SARS’s pleaded case starts to diverge from the assessment that was actually raised, the less willing the courts appear to be to indulge it.
So one should be careful not to make blanket statements about how SARS always litigates. But it is fair to say this: recent case law shows increasing judicial resistance to material attempts to repair or recast an assessment at pleading stage.
Rule 32: ITC 1912 finally gets a proper endorsement!
On the taxpayer side, BASF is just as important.
Rule 32(3) provides that the taxpayer’s statement of grounds of appeal may include a new ground, unless it amounts to a new objection against a part or amount of the assessment not previously objected to under Rule 7.
The key phrase is “part or amount”.
In ITC 1912 (2018) 80 SATC 256, the Tax Court held that a taxpayer may raise a new ground on appeal provided it relates to the same part or amount already placed in dispute.8
That principle has been widely cited, but often cautiously.
Before BASF, higher courts had already moved in that direction, though usually with a qualification. In Free State, new grounds were allowed because they were foreshadowed. In TALT v Commissioner for the South African Revenue Service [2024] ZAGPJHC 827, the court held that a prescription objection can cover the entire assessment. In Commissioner for the South African Revenue Service v Baseline Civil Contractors (Pty) Ltd [2026] ZASCA 20, the SCA accepted part of the ITC 1912 logic but insisted that the new ground must not change the substance of the objection.10
BASF pushes harder.
If the amount is in dispute, that is enough.
The taxpayer had objected to the entire transfer pricing adjustment. The new grounds — EBIT corrections and OEM compensation — went to that same amount. That was sufficient. Novelty did not matter. Difference did not matter.
That is the strongest judicial endorsement yet of the full ITC 1912 approach.
But Baseline is still there. And it suggests that sameness of amount may not always be enough on its own; there may still need to be some substantive continuity between the objection and the later ground.
So there is tension.
BASF pushes hard in one direction. Baseline holds the line in another. That tension will ultimately have to be resolved by the SCA.
Final thoughts
BASF is not a transfer pricing case.It is a pleading case.
And it delivers three very clear messages.
On appealability: if the ruling fixes the case to be met, it can be appealed.
On Rule 31: SARS cannot reinvent its assessment in its pleadings.
On Rule 32: if the amount is in dispute, the taxpayer has room to move — though Baseline suggests not unlimited room.
The broader message is simpler still.
The Tax Court is not a workshop for repairing defective assessments.
If readers want the longer-form practical treatment of these remedies and procedural pressure points, that is exactly the terrain covered in Practical Guide To Handling Tax Disputes.
Footnotes
1. BASF South Africa (Pty) Ltd v Commissioner for the South African Revenue Service (A2024/024644) [2026] ZAGPJHC 275 (13 March 2026).
2. Lion Match Company (Pty) Ltd v Commissioner for the South African Revenue Service (301/2017) [2018] ZASCA 36 (27 March 2018).
3. ITC 1813 69 SATC 79; Commissioner for the South African Revenue Service v Virgin Mobile South Africa (Pty) Ltd (1303/2023) [2025] ZASCA 77.
4. Commissioner for the South African Revenue Service v Free State Development Corporation (Pty) Ltd [2023] ZASCA 84.
5. Taxpayer v Commissioner for the South African Revenue Service (Case No 45840, Tax Court) (unreported).
6. IT 25209 (2025) (Tax Court, unreported).
7. Commissioner for the South African Revenue Service v Erasmus (864/2024) [2026] ZASCA 22 (5 March 2026).
8. ITC 1912 (2018) 80 SATC 256.
9. TALT v Commissioner for the South African Revenue Service [2024] ZAGPJHC 827; Commissioner for the South African Revenue Service v Baseline Civil Contractors (Pty) Ltd [2026] ZASCA 20.
