In a precedent-setting decision, the Durban High Court refused yesterday to allow a South African Revenue Service (SARS) employee to testify and submit documents about the tax affairs of Schabir Shaik.

Judge Hillary Squires' ruling reinforces the rights of taxpayers to confidentiality. Shaik is appearing in court on fraud and corruption charges.

Squires was ruling on the admissibility of evidence after SARS, the prosecution and the defence had taken three different positions.

SARS argued that for its official, Rob Reid, to take the stand without offending the Income Tax Act, it needed a specific order from the judge.

The defence agreed that a court order was required, but urged the judge not to give it, saying it was unnecessary.

The prosecution, however, argued the order was not necessary.

Squires said he was consequently required to answer the question of whether an order was necessary and if so, whether it should it be given in this case.

He said a legal case that took place without the official sanction of the commissioner was not sufficient to allow SARS officials to give evidence without a specific court order.

On the question of whether a court order should be given, the judge said he could do so only if the need for the evidence was pressing.

Four other witnesses took the stand yesterday, including two representatives of an educational institution, Workers' College, that was alleged to have been a 10% shareholder in Shaik's Nkobi Holdings at one time.

The trial was adjourned to the end of January next year.

With acknowledgements to Tim Cohen and the Business Day.