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[2024] ZAFSHC 84
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Tresping Manufacturing (Pty) Ltd v Commissioner for the South African Revenue Services (1286/2024) [2024] ZAFSHC 84 (13 March 2024)
SAFLII
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personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
Case
no:
1286/2024
In
the matter between
:
TRESPING
MANUFACTURING (PTY) LTD
Applicant
and
THE
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE
SERVICES
Respondent
CORAM:
JP DAFFUE J
HEARD
ON:
11 MARCH 2024
DELIVERED
ON:
The order was granted on 11 MARCH 2024
and the reasons
delivered
on 13 MARCH 2024
REASONS
[1]
On 11 March 2024 I dismissed an urgent application by
the applicant,
Tresping Manufacturing (Pty) Ltd. Due to the urgency of the matter
and other urgent applications that needed my
attention, I indicated
that my reasons would follow in due course. These are my reasons.
[2]
On 5 March 2024 the applicant issued an urgent application
out of
this court, seeking the release and handing over of a truck with
registration number DG […], two trailers and a consignment
of
textile. A costs order was also sought against the Commissioner for
the South African Revenue Services (SARS), cited as the
respondent.
[3]
On 6 March 2024 the application was served on SARS. It
was directed
to file its notice of intention to oppose by not later than 15h30 on
8 March 2024. SARS did so. The application was
enrolled for hearing
on Monday, 11 March 2024 at 10h00. 8 March 2024 was a Friday. SARS,
through its Pretoria attorneys, prepared
an answering affidavit. This
was served at 22h36 (after half past ten) on Friday night on Kambule
Attorneys Inc, the applicant’s
Bethlehem attorneys, by making
use of the email address set out in the notice of motion. The next
morning, Kambule Attorneys acknowledged
receipt of the answering
affidavit.
[4]
SARS went out of its way to ensure that all relevant
information was
placed before the court for a proper hearing of the matter
notwithstanding its submission that the matter was not
urgent at all.
Its answering affidavit was also served on the Bloemfontein attorneys
at 09h14 on Monday morning where after it
was filed at court. I,
being the judge on duty to deal with urgent matters, received the
following documents less than half an
hour before the start of the
hearing:
a.
SARS’ answering affidavit;
b.
applicant’s notice to oppose the SARS’
notice in terms of
rule 47 requiring security to be provided;
c.
applicant’s practice note and its heads
of argument;
d.
an email indicating that SARS’ heads
of argument and practice
note had been served already at 10h31 on Sunday, 10 March 2024; and
e.
SARS’ heads of argument and practice
note.
[5]
The two counsel met me in chambers before the hearing
whereupon I
requested applicant’s counsel, Mr Mphuloane, to get
instructions as to whether the applicant intended to ask
for a
postponement to file a replying affidavit. In court, I enquired
what was the applicant’s attitude pertaining
to the filing of a
replying affidavit. There was uncertainty and I allowed another five
minutes to get proper instructions. Eventually
I was told that no
replying affidavit would be filed and that the applicant forfeited
the right to file same.
[6]
It is common cause that the applicant is a
peregrinus
of this
country. SARS’ counsel, Mr Mothibe, indicated at the onset that
he was prepared to argue the matter notwithstanding
the fact that
security in the amount of R400 000 was sought in terms of rule 47,
but not provided.
[7]
I requested Mr Mphuloane to deal with the following three
issues in
argument:
a.
urgency;
b.
applicant’s alleged
locus standi
; and
c.
applicant’s non-compliance with section
96 of the Customs and
Excise Act 91 of 1964.
[8]
The golden thread through Mr Mphuloane’s argument
was that his
client faced the proverbial double jeopardy, the reason being that
the applicant had already been fined to pay R1
500, where after the
matter was regarded ‘closed’. Consequently, SARS was not
entitled to keep the vehicles and consignment
any longer and/or to
seize them as this would amount to a further penalty which was not
allowed in law. This argument, dealing
with the merits of the
matter, does not hold any water. The court is not asked to review or
appeal the imposed penalty. In any
event, it related to incorrect
documentation pertaining to the weight of the transported freight. I
do not intend to deal with
this issue any further. Herein later I
shall briefly deal with the merits.
[9]
On 8 February 2024 the truck, trailers and consignment
were detained
in terms of section 88(1)(a), read with section 87 and 102 of the
Customs Act. SARS established serious issues pertaining
to the
incorrect importers’ code number. Further suspicion was also
raised pertaining to the applicant’s business pertaining
to
twenty-nine entries into the country since 2023. No answers could be
given pertaining to the questions asked about the applicant
and the
imports.
[10]
It is accepted that detention must be for a reasonable period only
for the
purpose of establishing whether the goods or the vehicles
were liable to forfeiture in terms of section 87 of the Customs Act.
[11]
On 21 February 2024 Ms Kambule of Kambule Attorneys contacted the
relevant
SARS official for the first time in writing. Correspondence
ensued. SARS
inter alia
required a lease agreement of the
truck for movement of the consignment from Lesotho to South Africa.
This was communicated in
a letter of 4 March 2024 addressed to
Kambula Attorneys. On the same day a further letter was addressed
pertaining to the customs
process, requesting clarity on the use of
the particular code number as well as other aspects. These two
letters were attached
to the answering affidavit, but unlike as could
be expected, the applicant decided not to attach these important
letters to its
founding affidavit. Also, the queries were not dealt
with at all.
[12]
Having provided some background, it is necessary to deal with the
first issue,
to wit, urgency. The applicant tried to make out a case
in paragraph 7 of the founding affidavit. It vaguely alleged why it
would
not be afforded redress at a hearing in due course. It referred
to the use of the truck. It never indicated that it was the owner
of
the truck and trailers. In fact, it is apparently not the case. It
also failed to show who was the owner of these vehicles,
notwithstanding repeated requests by SARS. There is no specific
allegation as to who would suffer damages if the truck and trailers
were detained pending further investigation. There is also no
indication as to who will suffer damages if the consignment is kept
pending the investigation. I would have expected the applicant to
show that it will suffer damages in the regard, for example because
of non-payment by the buyer and importer of the consignment due to
the failure to deliver. It might have been a situation where
the
importer who stands to lose profit as a result of not being able to
sell the goods for which it has paid, has threatened to
claim his
losses from the applicant. Nothing is said in this regard.
[13]
I have to an extent already dealt with the issue of lack of
locus
standi
. Clearly, the applicant is not the owner of the truck and
trailers. It also failed to allege and prove that it has a right to
apply
to court for the release to it of these vehicles. No lease
agreement or any other agreement has been relied upon to prove the
applicant’s
entitlement to possession notwithstanding requests
from SARS to provide same. Therefore, there is a dearth of evidence
pertaining
to the identity of the owner and the applicant’s
right to claim possession of the vehicles.
[14]
Section 96(1) of the Customs Act provides that no process by which
any legal
proceedings are instituted against
inter alia
the
Commissioner may be served before the expiry of a period of one month
after delivery of a notice in writing, setting forth
clearly and
explicitly the cause of action, the name and place of abode of the
person who institutes such proceedings and the name
and address of
his/her attorney or agent, if any. The applicant also failed to
comply with the rules issued in terms of the Customs
Act,
specifically rules 96.01 and 96.02, pertaining to the completion of
form DA96. Such form has not been filed.
[15]
The failure to
comply with section 96(1) and the abovementioned rules is fatal as
these constitute peremptory requirements. Service
of the section 96
notice prior to institution of proceedings is a jurisdictional
condition precedent for the asking of relief from
the court. In
Commissioner
for SARS & Others v Dragon Freight (Pty) Ltd and Others
[1]
,
the SCA, relying
on a decision of the full court in
Prudence
Forwarding
stated
that non-compliance with section 96 is fatal, quoting from paragraph
28 of the full court judgment which reads as follows:
‘…
It was therefore
incumbent upon them to serve the relevant notice and to obtain the
agreement of the Commissioner or the sanction
of the court to reduce
the one month period in respect of the new cause of action involving
a review of the seizure decision. This
was not done. … and
neither the Commissioner or the court agreed to a reduced period, the
jurisdictional conditions precedent
were not fulfilled, and the court
accordingly lacked jurisdiction to grant the final relief it granted,
… .’
[16]
Although
unnecessary for the adjudication of the application, it is necessary
to deal briefly with the merits of the application.
Section
4(8)(A)(a) provides that any officer may stop, detain and examine any
goods while under customs control in order to determine
whether the
provisions of this Act or any other law has been complied with.
Sub-section (b) provides that the release of goods
may be stopped at
any time while such goods are under customs control. After levying
the administrative penalty referred to above,
but while the items
were still under ‘stop note’ and pending payment of the
penalty, SARS officials found reason to
become suspicious. Therefore,
the truck, trailers and goods were detained in terms of section
88(1)(a) of the Act. The applicant
was requested to provide relevant
documents and to explain the use of the importers’ code 707070.
This code is often used
to hide records of importation and make it
difficult for SARS to track and trace the whereabouts of consignment
post clearance
inspection. Also, the power of attorney of the
applicant’s attorneys was also required. There was no
compliance. Section
88(1)(a) provides for detention of goods to
establish whether they are liable to forfeiture or not in terms of
section 87. I refer
to
Dragon
[2]
supra
as
well
Commissioner
for South Africa Revenue Services v Trend Finances (Pty) Ltd.
[3]
In
Trend
Finances
the
SCA stated as follows:
‘…
In terms of the words of
that section, such detention is ‘for the purpose of
establishing whether . . . goods are liable to
forfeiture under this
Act’. A limitation must be read into that section to the effect
that the right to detain goods only
endures for a period of time
reasonable for the investigation which the section contemplates to be
made, but no longer. …’
In casu
, a
reasonable period of detention has not expired by the time the
application was moved, particularly insofar as the goods were
detained on 8 February 2024 and the applicant has notwithstanding
several requests failed to provide the required information and/or
documents. It is also apparent that the Commissioner has decided to
take further steps and intend to issue a notice of intent to
seize.
[17]
Consequently, the application was dismissed with costs.
JP
DAFFUE J
On
behalf of the Applicant:
Adv
PS Mphuloane
Instructed
by:
Kambule
Attorneys Inc
c/o
Mokhomo Attorneys
BLOEMFONTEIN
On
behalf of the Respondent:
Adv
WM Mothibe
Instructed
by:
Maponya
Inc
c/o
Honey Attorneys
BLOEMFONTEIN
[1]
(751/21) [2022] ZASCA 84; [2022] 3 All SA 311 (SCA); 85 SATC 289 (7
June 2022).
[2]
At
para 44.
[3]
(162/06) [2007] ZASCA 59; [2007] SCA 59 (RSA); 2007 (6) SA 117 (SCA)
(23 May 2007) at para 29.