The South African Revenue Service (SARS) has welcomed the unanimous judgment of the Supreme Court of Appeal (SCA) affirming the revenue collector’s procedure and right to seize goods which have been under-declared when crossing into South Africa.
Ruling on the matter involving SARS and a freight company that had its goods seized in 19 containers imported from China.
In a statement, SARS said the goods had been under-declared for customs duties on import.
“These containers contained textiles and clothing goods, which were flagged by SARS’ electronic risk engine, designed to counter fraud and illegal activities, which was further investigated by Customs staff,” said SARS.
Argument in the SCA from the Respondents was that SARS’ decision ought to be set aside on the grounds of “procedural unfairness, irrationality and unreasonableness”.
The SCA wholly rejected this argument, overturned the High Court’s prior decision in favour of the agent and traders and issued a cost order in favour of SARS.
The SCA ruled that SARS had acted within its mandated scope, that SARS had acted procedurally fairly and that SARS had acted on evidence gathered.
SARS said the importation of clothing and textiles has been steadily increasing since the dawn of democracy due to the availability of cheap manufactured goods outside of South Africa.
“This case is an important reflection that SARS performs its functions for the benefit of South Africa and her people and is a reminder that SARS is an integral component in the economy. The judgment confirms that SARS is dedicated to enforcing its mandate to control the importation of certain goods to support and promote the macro-economic policy objectives of the government.”
SARS said it was firmly committed to service excellence and this includes not being deterred by aggressive litigation that undermines the fiscal and economic fabric of the country.
SARS Commissioner Edward Kieswetter, who expressed his satisfaction with the decision, said there are concerted attempts by those engaged in illicit activities to circumvent the support put in place by government for local industries thereby eroding productive capacity in the country with accompanying job losses, particularly in the local manufacturing sector.
“This limits the country’s potential to grow and create jobs, and leads to unfair competition for legitimate trade.
“SARS is continually refining its capacity to detect this non-compliant behaviour, and will do all in its power to make it costly to non-compliant taxpayers, while facilitating legitimate trade”.