3M South Africa (Pty) Ltd v Commissioner for the South African Revenue Services and Another (272/09) [2010] ZASCA 20; [2010] 3 All SA 361 (SCA) (23 March 2010)

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3M South Africa (Pty) Ltd v Commissioner for the South African Revenue Services and Another (272/09) [2010] ZASCA 20; [2010] 3 All SA 361 (SCA); 72 SATC 216 (23 March 2010)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case
No 272/09
In
the matter between:
3M
SOUTH AFRICA (PTY) LTD
Appellant
and
THE
COMMISSIONER FOR THE SOUTH
AFRICAN REVENUE SERVICE
First
Respondent
THE
MINISTER OF FINANCE
Second
Respondent
Neutral citation:
3M
South Africa v CSARS
(272/09)[2010]
ZASCA 20 (23 March 2010)
Coram:
NAVSA,
CLOETE JJA and GRIESEL, SERITI, and SALDULKER AJJA
Heard:
18
February 2010
Delivered:
23
March 2010
Summary:
Customs
and Excise
Act
91 of 1964 – importer’s entitlement to refunds and liability for
arrear import duty arising from incorrect determination by
Commissioner.
order
On appeal from:
The North
Gauteng High Court, Pretoria (Louw J sitting as court of first
instance):
1. The appeal is upheld to the following extent:
1.1 Paragraph 2 of the order of the high court is set aside and
replaced with the following:
‘
2.1 Prayer
3.2 of the notice of motion is dismissed together with the costs
incurred in respect of the relief set out in that paragraph.
2.2 It
is declared that the amount of customs duty (R3 598 971,70)
and interest thereon (R1 890 959,72), demanded
from the
applicant in the first respondent’s letter of demand dated 10
August 2007 (annexure FA27 to the founding affidavit) is
not payable
by the applicant to the first respondent.’
1.2 Paragraph 3.4 of the order of the high court is amended to read:
‘
3.4 pay
the applicant’s costs incurred in respect of the relief set out in
paragraphs 2.2, 3.1, 3.2 and 3.3 above, such costs to
include the
costs con­sequent upon the employ­ment of two counsel.’
2. The first respondent is ordered to pay the costs of the appeal,
including the costs of two counsel.
judgment
Griesel AJA (Navsa and
Cloete JJA, Seriti and Salduker AJJA concurring):
[1] The appellant
launched an application in the North Gauteng High Court, Pretoria
against the first respondent, the Commissioner
for the South African
Revenue Service (‘the Commissioner’), for declaratory and
ancillary relief based on certain provisions
of the Customs and
Excise Act 91 of 1964 (‘the Act’).
1
The application succeeded in part and, with leave of the high court,
the appellant appeals to this court against those parts of the
order
in respect of which it was unsuccessful.
2
[2] The appeal
concerns, on the one hand, the appellant’s entitlement to refunds
of customs duty paid on certain imported goods
and, on the other
hand, its liability for unpaid customs duty allegedly owing in
respect of such goods. In respect of both issues
the classification
system created by Schedule 1 to the Act and the determination of the
appropriate classification by the Commissioner
play a pivotal role.
However, it is not necessary for purposes of this appeal to embark
upon the intricacies of tariff classification
which, according to the
deponent to the Commissioner’s answering affidavit, is ‘notoriously
difficult’.
3
In this case, the Commissioner, during April 1991, determined a
tariff heading, under which the goods in question were categorised,
attracting customs duty at a rate of 20%. It is common cause that
this determination was incorrect. It was eventually corrected many
years later, in 2006. What we are concerned with are the consequences
of the new determination, made with retrospective effect.
Statutory framework
[3] In terms of s 47(1)
of the Act customs duty is payable on all imported goods in
accordance with the provisions of Schedule
1. In Part 1 of the
Schedule all goods generally handled in international trade are
systematically divided into numerous tariff headings
and subheadings.
The tariff subheading within which imported goods fall determines the
rate at which the goods attract payment of
customs duty (if any).
Many of the tariff subheadings provide that the goods specified may
be imported free of customs duty.
[4] In terms of
s 47(9)(a)(i) the Commissioner may in writing determine the
tariff headings, tariff subheadings or tariff items
or other items of
any Schedule under which any imported goods shall be classified.
Determinations are subject to appeal to the high
court having
jurisdiction, which appeals must be prosecuted within a period of one
year from the date of the determination.
4
[5] A determination may
also be amended, withdrawn, or another determination substituted for
it with retrospective effect. Where the
original determination was
made in bona fide error of law or of fact (as happened in this
instance), a new determination may be made
with effect from the date
of the original determination.
5
Alternatively, the amended determination may be made with effect from
the date of the amendment of the previous determination or
the date
of the new determination.
6
[6] A proviso to
s 47(9)(d) that is particularly relevant to the present enquiry
reads as follows:
‘
Provided that whenever
any amendment of a determination or a new determination is effective
from a date resulting in the person to
whom the determination was
issued â€“
(a) being entitled to a refund of duty, such refund
shall be subject to the provisions of section 76B;
(b) retrospectively incurring an increased liability for
duty, such liability shall . . .  be limited to goods
entered
for home consumption during a period of two years immediately
preceding the date of such amendment or new determination.’
[7] The material
portions of s 76B to which reference is made in the first
proviso quoted above reads as follows:
‘
(1) Notwithstanding any
other provision of this Act, . . . where any person
becomes entitled to any refund or drawback
of duty –
(a)
in the case of any determination, new
determination or amendment of any such determination in terms of
section 47(9) . . . ,
such refund shall be limited to
–
(i) a refund in respect of goods entered for home
consumption during a period of two years immediately preceding the
date of such
determination, new determination or amendment, whichever
date occurs last; . . . and
(ii) any application for such refund which is received
by the Controller within a period of 12 months from the date of –
(aa) such determination, new determination or amendment
of a determination. . . .’
Factual
background
[8] The appellant has
been conducting business as an importer of Interam Brand mats (‘the
mats’) since June 1990. These mats are
made up, inter alia, of
ceramic fibre mineral wool which is used, after press-cutting thereof
into shapes, in the manufacture of
automotive catalytic converters
for exhaust emission control systems. All such converters were
destined for the export market, but
the appellant was not responsible
for either the manufacture or the export thereof.
[9] On 11 June 1990,
acting in accordance with the provisions of s 47(9)(a)(i), the
Commissioner determined the mats to be classifiable
under tariff
subheading 6806.90.90 of Part 1 of the Schedule (‘the 1990
determination’). The effect of this determination was
that no
customs duty was payable in respect of the imported mats.
[10] However, less than
a year later, in terms of a new tariff determination, dated 9 April
1991 (‘the 1991 determination’), the
Commissioner amended his
earlier decision and determined the mats to fall under tariff
subheading 6806.10, with the result that customs
duty at a rate of
20% became payable in respect of the imported mats as from that date.
[11] On 4 July 1992 the
appellant obtained registration as a rebate store for purposes of
importing the mats under a full rebate of
duty in terms of Rebate
Item 470.03 in Part 3 of Schedule 4 to the Act. The effect thereof
was that as long as the applicant complied
with the rebate
conditions, it paid no customs duty in respect of the mats. Two of
those conditions were that the goods imported
had to be used for the
processing and manufacture of goods for export and the manufactured
goods had to be exported within 12 months
from date of entry thereof.
[12] During January
2003, after an inspection by two SARS officials of the appellant’s
records, the Commissioner issued a letter
of demand to the appellant
for payment of an amount of some R27 million in respect of, inter
alia, underpayment in customs duty and
value-added tax (‘VAT’).
As emerged subsequently, the demand was based on a contention that no
proof that the mats had been used
in compliance with the relevant
rebate requirements had ever been furnished to the Commissioner, with
the result that the duty and
VAT payable in respect of the mats
should have been paid by the appellant.
[13] On 25 March 2003,
no doubt prompted by the Commissioner’s letter of demand, the
appellant applied to the Commissioner for a
new tariff determination
in respect of the mats. However, on 22 April 2003 the Commissioner
again determined the imported mats to
fall under tariff heading
6806.10 (‘the 2003 determination’), at that stage attracting
customs duty at the rate of 15%.
[14] The appellant made
further representations to the Commissioner to change this
determination, but on 25 September 2005 the Commissioner
reaffirmed
the 2003 determination.
[15] In the meantime
there had been a parallel exchange of correspondence between the
parties arising from the Commissioner’s letter
of demand issued in
January 2003. Certain further information and documentation was
requested on behalf of the Commissioner, some
of which was furnished
by the appellant. Many meetings also took place which, however, did
not resolve the differences between the
parties. Having considered
the information furnished by the appellant, the Commissioner, on 22
November 2005, issued an amended letter
of demand, claiming payment
of some R16,4 million. Written reasons for the decision were
requested by the appellant and furnished
by the Commissioner.
[16] During January
2006 the parties agreed to refer the determination issue to the World
Customs Organisation (‘WCO’) for a non-binding
advisory ‘ruling’.
On 21 November 2006, after receipt of the WCO’s ‘ruling’, the
Commissioner amended the classification
of the imported mats from
subheading 6806.10 to 6806.90.90 (‘the 2006 determination’), ie
the determination contended for by
the appellant. This decision
reinstated the earlier position that no customs duty was payable in
respect of the imported mats. With
regard to the effective date of
the new determination, the Commissioner stated that the determination
would take effect as from 22
April 2003, ie the date of the 2003
determination. He did so, however, in ignorance of the earlier 1991
determination. Having been
made aware of the true position, the
Commissioner ultimately, in the answering affidavit in the present
proceedings, conceded that
the effective date of the 2006
determination ought to be 9 April 1991. He accordingly did not oppose
the appellant’s claim for
a
mandamus
to that effect.
[17] In a letter dated
10 August 2007, the Commissioner informed the appellant of its rights
arising from the 2006 determination,
in particular, its right to
claim refunds of duties paid in respect of all goods imported ‘during
the two years immediately preceding
the 2006 determination, ie from
22 November 2004 until 21 November 2006’. At the same time, the
Commissioner reiterated his earlier
demand in respect of underpayment
of customs duty, based on the appellant’s alleged failure to
furnish proof that the mats had
been used in compliance with the
relevant rebate conditions during the period 1 November 2000 until 1
February 2002. In the circumstances,
the Commissioner was holding the
appellant liable for payment of a reduced amount of some R11,9
million.
[18] The appellant took
issue with the Commissioner’s contentions. In launching its
application in the high court, the appellant
accordingly sought an
order (in prayer 1 of the notice of motion) –
‘
. . . declaring that on
a proper interpretation of s 47(9)(d)(ii)(cc) and s 76B of the
Customs and Excise Act, 91 of 1964, the Applicant
is entitled to
refunds in respect of importations of the imported mats . . .
for the period 1 March 2002 to 20 November
2004’.
The corollary to this
declarator was a claim (prayer 3.2) for payment of refunds in the
amount of R8,8 million in respect of
the same period. (The
appellant’s further claim (in prayer 3.1) for a refund in the
amount of R4,5 million in respect of the
period 21 November 2004
to 20 November 2006, together with interest, was not contested by the
Commissioner.) Finally, the appellant
also sought an order (prayer
7), ‘that the [Commissioner’s] letter of demand dated 10 August
2007 . . . be reviewed
and set aside and that it be
declared that the amount demanded therein is not payable by the
[appellant] to the [Commissioner]’.
(By the time the matter came to
be argued in the high court, the appellant had narrowed down the
relief in prayer 7 by claiming an
order declaring that the amount of
customs duty and interest thereon, demanded from the appellant in the
letter of demand of 10 August
2007, is not payable by the appellant.)
[19] The high court
held that the appellant was not entitled to the declarator claimed in
prayer 1 in respect of the full period,
but that its claim was
limited to the period 21 November 2004 to 20 November 2006, ie the
two-year-period immediately preceding the
2006 determination. It
accordingly dismissed the claim for refunds arising during the
earlier period (prayer 3.2) and also dismissed
the claim in terms of
prayer 7.
[20] What falls to be
decided in this appeal are the questions (a) whether or not the
appellant is entitled to a further refund
of customs duty in respect
of the period 1 March 2002 to 20 November 2004; and (b) whether
or not the appellant is liable for
payment of the additional duty and
interest as claimed by the Commissioner in his letter of demand,
dated 10 August 2007.
Appellant’s
entitlement to refunds
[21] This claim must be
determined with reference to the provisions of s 76B(1)(
a
),
which have been quoted above,
7
more specifically the expression ‘the date of such determination’
8
as it appears in that paragraph. The appellant contended that those
words refer to the
effective date
of the 2006 determination,
which is 9 April 1991. In the result, so it was contended, the two
year period contemplated by para (a)
is to be calculated as from 9
April 1989. The Commissioner, on the other hand, took up the attitude
that the words in question refer
to the date when the 2006
determination was made, ie 21 November 2006.
[22] The high court
upheld the Commissioner’s interpretation, reasoning as follows:
‘
It was at the forefront
of the legislature’s mind that there could be effective dates going
back many years, and it immediately
made the right of recovery
subject to section 76B, which imposes a limit of two years. Secondly,
whereas the terms “with effect
from” and “effective from a
date” have just been used, and the concept of effective date is
being dealt with, it is striking
to note that there is no reference
to effective date or the word effective in the relevant part of
section 76B to which the proviso
refers.’
9
After quoting the
relevant portions of s 76B, referred to above, the learned judge
proceeded as follows:
10
‘
The phrase highlighted
above, namely “the date of such determination” is clear and has
to be given its usual meaning. The date
of the relevant determination
is 21 November 2006. I find it obvious that the legislature would
have used the concept of effective
date in section 76B(1)(a)(i) if
that was intended. If the Act was intended to limit the right of
refund not to the period of two
years preceding the date on which the
determination was made, but to a period of two years preceding the
effective date thereof,
it would have stated so.
The applicant protests
that this construction leads to unjust, even absurd, consequences.
Pointing to various letters and memos exchanged
between the parties
and their legal representatives during the process of having the
determination amended, it is argued that the
first respondent now
profits by its own delay, ie by not having made the correct
determination much earlier, ie at a stage when the
applicant first
protested that the classification was wrong. The process of arriving
at the redetermination of 21 November 2006 included
a detailed
submission on behalf of the applicant by South African Customs &
Trade Specialists CC dated 10 August 2005 and an
eventual referral of
the issue to the World Customs Organisation (WCO) by agreement
between the parties during about January 2006.
It was after the WCO’s
“determination” that the first respondent amended the tariff
determination during November 2006.
The short answer to these
arguments of the applicant is that it was at all times open to the
applicant to appeal the wrong determination
and so limit its loss.
The proviso to s 76B(1)(a)(i) . . .  makes it
clear that in the case of any appeal against
a determination, the
two-year period shall be calculated from the date of such appeal, ie
the two years preceding the date of the
appeal. The applicant did not
appeal any of the wrong determinations, namely: 9 April 1991, 22
April 2003 and 22 September 2005.’
The learned judge
accordingly concluded ‘that the plain meaning of the relevant part
of s 76B is clear and that no absurd consequences
follow’.
11
[23] Before us, counsel
for the appellant assailed the reasoning of the high court and
reiterated the main argument that, on the Commissioner’s
interpretation, he can deprive the appellant of its right to refunds
by simply delaying (for whatever reason) the decision to correct
the
determination.
[24] I am unpersuaded
by this argument. As rightly pointed out by the high court,
12
it was at all times open to the applicant to appeal the wrong
determination in terms of s 47(9)(e) and so limit its loss. It
is thus clear that a disgruntled importer can, at least to this
extent, curtail any delay on the part of the Commissioner. Counsel
has been unable to point to any absurd consequences that will flow
from adopting the high court’s interpretation of the expression
‘the date of such determination’ and I am unable to find any. I
am satisfied that the interpretation of s 76B advocated
by the
Commissioner and adopted by the high court is indeed the correct one.
[25] I am fortified in
this conclusion by the fact that the expression ‘the date of such
determination’ is used, not only in sub-paragraph
(i) of
s 76B(1)(a), but also in the very next sub-paragraph (ii), where
an application for a refund is required to be received
within a
period of 12 months from ‘the date of such determination’. It is
a well-established principle of statutory interpretation
that
ordinarily the same words and phrases in a statute bear the same
meaning.
13
As it was put by Kriegler J in
S v Dlamini; S v Dladla &
others; S v Joubert; S v Schietekat
:
14
‘
It is of course most
unusual to find one and the same expression used in one and the same
statute but not bearing a consistent meaning.
In our law the
Legislature is presumed to use language consistently and one would
deviate from the presumption with great hesitation
and only if driven
to do so, for example, because to do otherwise would lead to manifest
absurdity or would clearly frustrate the
manifest intention of the
lawgiver.’
[26] If the appellant’s
interpretation were to be applied to the expression ‘date of such
determination’ in both sub-paragraphs,
namely to refer to the
‘effective date’, then it would lead to the absurd result that,
in the present context, the application
for a refund should have been
submitted within 12 months from the effective date, in other words by
not later than 9 April 1992,
whereas the new determination was only
made in November 2006. Faced with this incongruity, counsel for the
appellant was constrained
to urge the court to depart from the
ordinary principle referred to above and to attach a different
meaning to the expression in
the two consecutive sub-paragraphs,
namely by interpreting the expression as referring to ‘the
effective date’ in sub-para (i),
but to ‘the date the
determination was issued’ in sub-para (ii).
[27] In my view, a
departure from the general principle is not warranted, either by the
clear wording of the relevant provisions or
by the context in which
it appears. If the Commissioner’s interpretation is applied to both
sub-paragraphs, no absurdity follows.
Then it simply means that the
appellant is entitled to a refund for a period of two years preceding
the date upon which the new determination
is made and that its claim
for a refund must be received within a period of 12 months from such
date. The appellant’s interpretation,
on the other hand, could
potentially give rise to liability going back many years (as in this
instance), which would be in conflict
with the manifest purpose of
s 76B, namely to limit claims for refunds.
15
[28] It follows, in my
view, that the first leg of the appeal cannot succeed.
Appellant’s
liability to pay customs duty
[29] I now turn to
consider the question whether the appellant is liable to pay arrear
customs duty plus interest, as claimed by the
Commissioner in his
amended letter of demand, dated 7 August 2007. With regard to this
aspect of the matter, the high court held
as follows:
‘
Whether this amount [ie
the additional refunds claimed] is payable to the applicant depends
on an interpretation of the Act, specifically
section 47(9)(d) and
section 76B(1)(a)(i) thereof.
The interpretation of these sections
will also determine whether the amount of R11.8 million claimed by
the first respondent during
August 2007 is payable
.’
16
[30] In my opinion, the
high court erred in holding that the fate of the first claim
necessarily determines the fate of the second
claim or that s 76B
has anything to do with the second claim. It is clear that s 76B
expressly deals with refunds only
and
not
with liability for
additional customs duty. For an answer to the latter question one has
to look elsewhere.
[31] Before doing so,
however, it is necessary first to deal with a preliminary objection
raised on behalf of the Commissioner, based
on the provisions of the
Promotion of Administrative Justice Act 3 of 2000 (‘Paja’). It
was argued that the August 2007 letter
of demand was only a further
demand for payment of an amount that had become payable by virtue of
the January 2003 and November 2005
letters of demand. It was those
decisions of the Commissioner, so it was argued, that should have
been impugned on review, as that
was the action which established the
appellant’s liability. However, by virtue of the provisions of
s 7(1)(b) of PAJA, any
review of those decisions should have
been instituted by the appellant within 180 days after the appellant
‘was informed of the
administrative action, became aware of the
action and the reasons for it or might reasonably have been expected
to have become aware
of the action and the reasons’, with the
result, according to the Commissioner, that the appellant’s right
to impugn those decisions
had become time-barred.
[32] The answer to this
argument is that, in resisting the Commissioner’s demand for
payment of arrear import duty, the appellant
is not invoking judicial
review as a remedy to set aside an unlawful administrative act;
instead, it is raising a ‘defensive’
or ‘collateral’
challenge to the validity of an administrative act, by which is meant
‘a challenge to the validity of the administrative
act that is
raised in proceedings that are not designed directly to impeach the
validity of the administrative act’.
17
As it was put by Scott J in
National Industrial Council for the
Iron, Steel, Engineering & Metallurgical Industry v Photocircuit
SA (Pty) Ltd & others
:
18
‘
But
the validity of administrative acts and subordinate legislation can
be challenged not only directly in review proceedings, but
also
indirectly or, as is sometimes said, collaterally, ie in “proceedings
which are not themselves designed to impeach the validity
of some
administrative act or order” (Wade
Administrative
Law
6th ed at 331). Obvious examples
are enforcement proceedings and criminal prosecutions, the latter,
according to
Baxter (op cit
at
706), being “one of the hardiest methods of securing review”. In
such proceedings, therefore, the need for judicial scrutiny
of an
administrative act or subordinate legislation arises not for the
purpose of affording a discretionary remedy, viz review or
a
declaratory order, but for the purpose of determining the entitlement
of the party seeking enforcement, or the guilt or innocence
of an
accused person. The defendant or accused in such proceedings cannot,
it seems to me, be precluded from raising invalidity as
a defence
merely on the grounds of delay. Indeed, if the position were
otherwise it would be akin to a defence to a claim becoming
prescribed before the claim itself, which would be untenable (cf
McDaid v De Villiers
1942
CPD 220
and for comment thereon, see De Wet and Yeats
Kontrak­tereg
en Handelsreg
4th ed at 273). In
practice, therefore, administrative acts and subordinate legislation
are “reviewed” in criminal and enforcement
proceedings, in some
cases many years after they were performed or promulgated . . .
.’
[33] In this instance,
the Commissioner is seeking to coerce the appellant into compliance
with its demands for payment of import
duty. In an attempt to defend
itself against such coercive power, the appellant is mounting a
collateral challenge to the validity
of the underlying administrative
act on which such power is purported to be exercised.
19
In these circumstances, a defence based on delay – whether under
the common law or PAJA – is simply not available.
[34] Turning now to the
merits of the Commissioner’s claim, he relied heavily on the
presumption that a
statute ordinarily does not apply with
retrospective effect.
20
Reference was made in this context to the principle in
Bell v
Voorsitter van die Rasklassifikasieraad & andere
21
in support of an argument that in the absence of a clear intention to
the contrary, a retrospective decision is not to be treated
as
affecting actions or transactions that have already been finalised,
stand to be finalised in due course, or which are the subject
of
pending litigation. In developing this argument, reliance was also
placed on the wording of s 47(9)(b) as it read at the
relevant
time, prior to its amendment in 2003 and 2007:
‘
Any determination so
made shall, subject to appeal to the Court, be deemed to be correct
for the purposes of this Act, and any amount
due in terms of any such
determination shall remain payable
as long as such determination
remains in force
.’
(My emphasis.)
According to the
Commissioner, therefore, the appellant remains liable for payment of
customs duty in respect of the period 1 November
2000 to 1 February
2002, during which the incorrect determination remained in force.
[35] I cannot accept
this argument. It is settled law that the presumption against
retrospectivity can be rebutted, inter alia, where
the retrospective
operation of a statute or a decision is provided for, either
expressly or by necessary implication.
22
Thus, even pending legal proceedings may be affected by a
retrospective amendment where such an intention is clear.
23
[36] Here,
s 47(9)(d)(ii) of the Act specifically provides that an
amendment or new determination may be made ‘with effect
from’ an
earlier date; in other words, there is a clear intention that the new
determination is deemed to have become operative
at the earlier date.
What was intended, in other words, was true ‘retro-activity’, or
retrospectivity in the ‘strong’ sense.
24
Applied to the present scenario, the new determination took effect
and became operative
ex tunc
, ie with effect from 9 April
1991. To hold otherwise would be to negate entirely the effect of the
retrospectivity of the 2006 determination
and would render the words
‘with effect from’ meaningless. Having said that, however, it
needs to be emphasised that the retrospective
effect of the new
determination does not affect completed transactions, but only
applies in respect of uncompleted transactions,
such as the
Commissioner’s demand for unpaid customs duty in this instance. The
dispute in that regard has been ongoing for a long
period and it is
truly one that is covered under the rubric of pending legal
proceedings.
[37] Moreover, in
seeking payment of arrear import duty from the appellant, the
Commissioner is effectively relying on and seeking
to enforce his own
mistakes, starting with the incorrect 1991 determination, followed by
the incorrect 2003 determination, followed
by his subsequent
incorrect fixing of the effective date as being April 2003, instead
of April 1991. The fact of the matter is that
none of these incorrect
determinations should have been made. To allow the Commissioner now,
in pursuing the demand for payment,
to rely on such mistakes would
not only be grossly unreasonable, but would offend against the
principle of legality itself.
[38] For these reasons,
I conclude that the appellant is not liable for the arrear customs
duty or interest claimed by the Commissioner
in the letter of demand,
dated 7 August 2007. It follows that the appellant is entitled to a
declaratory order to that effect.
[39] To the extent that
it has succeeded in resisting payment of the amount claimed by the
Commissioner, the appellant has been substantially
successful on
appeal and is accordingly entitled to the costs of the appeal,
including the costs of two counsel.
Order
[40] The following
order is issued:
1. The appeal is upheld to the following extent:
1.1 Paragraph 2 of the order of the high court is set aside and
replaced with the following:
‘
2.1 Prayer
3.2 of the notice of motion is dismissed together with the costs
incurred in respect of the relief set out in that paragraph.
2.2 It
is declared that the amount of customs duty (R3 598 971,70)
and interest thereon (R1 890 959,72), demanded
from the
applicant in the first respondent’s letter of demand dated 10
August 2007 (annexure FA27 to the founding affidavit) is
not payable
by the applicant to the first respondent.’
1.2 Paragraph 3.4 of the order of the high court is amended to read:
‘
3.4 pay
the applicant’s costs incurred in respect of the relief set out in
paragraphs 2.2, 3.1, 3.2 and 3.3 above, such costs to
include the
costs con­sequent upon the employment of two counsel.’
2. The first respondent is ordered to pay the costs of the appeal,
including the costs of two counsel.
B M Griesel
Acting Judge of Appeal
appearances
FOR APPELLANT: J P Vorster SC
N C Maritz
Instructed by: Wolvaardt Inc, Pretoria
Matsepes Attorneys, Bloemfontein
FOR RESPONDENT: J A Meyer SC
L G Kilmartin
Instructed by: The State Attorney, Pretoria
The State Attorney, Bloemfontein
1
The Minister of Finance was originally joined as the second
respondent, but played no further role in the litigation after the
appellant’s challenge to the constitutionality of s 76B of
the Act was abandoned.
2
The judgment of the high court has been reported as
3M SA (Pty)
Ltd v The Commissioner for the South African Revenue Service
2009 JDR 0481 (GNP).
3
As to the process of classification, see eg
International
Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise
1985 (4) SA 852
(A) at 863G–864C. See also
CSARS v
Fascination Wigs (Pty) Ltd
[2010] ZASCA 6
para 9 and the cases
referred to therein.
4
Section
47(9)(e)
and (f). For a very recent example of such an appeal, see
CSARS v
Fascination Wigs
above.
5
Section
47(9)(d)(ii)
(cc).
6
Section
47(9)(d)(ii)
(dd).
7
Para 7 above.
8
Afrikaans: ‘die datum van sodanige bepaling’.
9
Judgment para 22.
10
Paras 24–26.
11
Judgment para 28.
12
In para 26 of the judgment, quoted above.
13
See 25(1) Lawsa (1st reissue) para 335 and the cases cited in n 1.
14
[1999] ZACC 8
;
1999 (4) SA 623
(CC) para 47 (footnotes omitted).
15
See eg the heading to s 76B, which reads: ‘Limitation on the
period for which refund and drawback claims will be considered
and
the period within which applications therefor must be received by
the Controller’.
16
Judgment para 15 (my emphasis).
17
Oudekraal Estates (Pty) Ltd v City of Cape Town & others
2004 (6) SA 222
(SCA) para 32 (footnote 22).
18
1993 (2) SA 245
(C) at 252J–253D, referred to with approval in
Oudekraal
para 33.
19
Cf
Oudekraal
above,
loc cit
.
20
25(1) Lawsa (1st reissue) para 329.
21
1968 (2) SA 678
(A) at 683D–G. See also
S v Mhlungu &
others
[1995] ZACC 4
;
1995 (3) SA 867
(CC) paras 65–67;
Unitrans Passenger
(Pty) Ltd t/a Greyhound Coach Lines v Chairman, National Transport
Commission & others; Transnet Ltd (Autonet
Division) v Chairman,
National Transport Commission & others
1999 (4) SA 1
(SCA)
paras 18–19.
22
25(1) Lawsa 1st reissue (2001) para 329.
23
Compare in this regard
Bartman v Dempers
1952 (2) SA 577
(A)
at 582A–D.
24
Cf
Unitrans
case, above,
para 13;
National Director
of Public Prosecutions v Carolus & others
2000 (1) SA 1127
(SCA) paras 33–35.