Astron Energy, one of South Africa’s largest petrol station operators, is headed to court to challenge a R2.7 billion (~$140 million) tax assessment by the South African Revenue Service (SARS).
SARS claimed it identified five serious infractions during a 2017 audit of Astron, which prompted it to issue a letter of demand in October 2019 to the fuel supplier.
The agency alleges Astron did not pay sufficient excise duties and fuel levies, and that the fuel dealer wrongly offset the debt by claiming refunds for overpaid taxes. SARS denied Astron of the refund.
As a result, SARS insists Astron still owes the full amount.
However, Astron rejects the assessment, calling it legally and factually incorrect.
The oil firm added that SARS unfairly denied legitimate refund claims and have taken the case to the Western Cape High Court.
Astron is seeking both direct appeal and judicial review under the Promotion of Administrative Justice Act (PAJA).
Court clears the way for a full legal hearing
Judge Moosa dismissed SARS’s attempt to have the case struck out.
SARS had argued that Astron’s court papers were defective and mixed legal processes improperly.
But the judge ruled that Astron sufficiently detailed its claims, and that “SARS is simply being called on to defend its decisions,” accusing SARS of using exceptions as “a delaying tactic”.
The judge also ruled SARS must pay legal costs on the highest scale.
Consequently, Astron’s appeal and PAJA review will now proceed to trial, where it will be decided whether Astron must pay the R2.7 billion—or if SARS must refund some of it.
Astron’s expansion and rebranding efforts
After acquiring Chevron’s Southern African assets in 2017, Glencore established Astron Energy in 2018.
The ongoing legal dispute stems from a customs and excise audit conducted on Astron between May 2015 and March 2017, before Glencore acquired the energy group.
Originally operating under the Caltex brand, Astron rebranded over 850 service stations beginning in 2021 and introduced its first new-look station in 2022.
The firm has completed approximately 400 station rebrands and is currently taking measures to boost South Africa’s refining sector.
The country’s refining capacity has dropped in recent years, exposing its fuel sector to perpetual fluctuations in global oil prices.
In March, Astron said it was investing up to $328 million into upgrading its 100,000 b/d refinery in Cape Town, in compliance with the country’s clean fuel policy.
As the legal battle unfolds, all eyes will be on the High Court’s final ruling, which could have significant implications for both Astron Energy and the broader fuel retail sector.
