COMPLIANCE WITH PROCEDURAL REQUIREMENTS ESSENTIAL WHEN DEALING WITH CUSTOMS

By Virusha Subban Wednesday, November 30, 2016
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The Pretoria High Court (sitting as three judges) recently decided on an appeal case that involved a dispute with Customs. The case outlined the repercussions of non-compliance with procedural requirements when litigating against Customs.

In this case, SARS had detained imported blankets on the basis that the price had been under-declared by the importer. The importer urged SARS to release the goods and either to increase the declared value on a without prejudice basis, or to accept security in the form of a provisional payment as provided for in the Customs and Excise Act. However, SARS refused to release the goods from detention based on the reason that certain textile products including blankets are considered as high risk imports which require special attention. As a result, the importer filed a notice of motion giving notice as required in the Customs and Excise Act and seeking an order for SARS to release the container in issue.

At the hearing, the importer handed up an amended notice of motion. This time, the notice of motion included a prayer for an order that the seizure of the goods contained in the said container be set aside. The court a quo found in favour of the importer. SARS sought leave to appeal the court a quo’s order.

In the appeal, the court held that the importer failed to give notice in respect of the new cause of action introduced by the amendment in which they sought to review and set aside the seizure of the goods. The importer could not rely on the notice that they had served to obtain the release of the goods from detention. The Customs and Excise Act requires that the notice must relate to a specific cause of action, which is required to be set forth clearly and explicitly in the written notice. Such notice must comply with the requirements prescribed as provided for in the Customs and Excise Act. Since no notice was delivered in respect of the review, the court a quo accordingly lacked jurisdiction to grant the final relief it granted. Therefore, SARS succeeded on appeal on this procedural point.

Section 89 requires any litigant to give notice to SARS before serving any process for instituting any proceedings as contemplated in s96(1)(a) within 90 days after the date of seizure or the conclusion of an internal administrative appeal. In addition, s96 provides that no process instituting legal proceedings against SARS for anything done in pursuance of the Customs and Excise Act may be served before the expiry of a period of one month after the delivery of a notice in writing. The notice should set forth clearly and explicitly the cause of action and the particulars of the litigant. In order to be valid, the notice must comply with the specific requirements of s96 and such notice must be given within 90 days of the seizure. The one month period referred to in s96(1)(a) of the Customs and Excise Act, being the waiting period before which proceedings may be instituted, may be reduced or extended by SARS on good cause shown. If SARS refuses to reduce or extend the period, the High Court may do so, if the interests of justice so require. In addition, s102 (4) and (5) place an onus upon the owner of the goods to prove compliance with the Customs and Excise Act.

Importers must be aware of the prerequisite procedural requirements contemplated in the Customs and Excise Act before instituting legal proceedings against SARS.

* Virusha Subban, partner and Yue Li, candidate attorney, Bowmans