These
were three opposed applications heard as one case.
The
globular relief sought was just about the same. Some facts differed
here and there. Counsel agreed this was not in any material respects.
They therefore agreed it would be practical for the cases to be
combined.
The
proposed relief was poorly crafted. Without reading the full
applications into them, ...
These
were three opposed applications heard as one case.
The
globular relief sought was just about the same. Some facts differed
here and there. Counsel agreed this was not in any material respects.
They therefore agreed it would be practical for the cases to be
combined.
The
proposed relief was poorly crafted. Without reading the full
applications into them, the draft orders by themselves were virtually
meaningless. For expedience, I have simply picked the quintessence of
the remedy sought by the applicants from their affidavits, which
themselves were prolix, argumentative and could easily pass off as
heads of argument.
Apart
from costs of suit, the essence of the main relief sought by the
applicants was an order declaring as ultra
vires
the Constitution, section 192[1] of the Customs and Excise Act
[Chapter 23:02]
[“the
Customs Act”].
Ancillary
relief included an order declaring as unlawful, the seizure, or
attempted seizure, by the Zimbabwe Revenue Authority [“ZIMRA”] of
certain second hand Toyota Fortuner motor vehicles imported by the
applicants in November 2015, March 2016, and October 2016. The
applicants also sought the immediate and unconditional return of such
of the motor vehicles as might have been seized by the Zimbabwe
Revenue Authority (ZIMRA); the nullification of ZIMRA's call for
extra duty, penalties and interest, and the reimbursement of such of
the amounts as the applicants might have paid already.
The
Zimbabwe Revenue Authority (ZIMRA) is the central collector of
revenue for Government. It was established as such by the Revenue
Authority Act [Chapter
23:11].
Except
for some additional detail, or some not so consequential variation
here and there, the factual background in all the three matters was
largely identical, and, in most material respects, common cause. The
brief facts, as summarised by myself, were these;
Through
relatives based in that country, the applicants bought the vehicles
in South Africa and imported them to Zimbabwe. At the border, the
applicants, through their customs clearing agents, declared certain
values on the vehicles for the purposes of duty, as required by the
Customs Act.
Except
for Case 1: Main
Road Motors v Zimbabwe Revenue Authority & Ors
HC139/17, the applicants say ZIMRA's proper officers rejected the
declared values and calculated their own which were higher. A Proper
Officer
is the designated officer at a port of entry.
In
Case 1, the Proper Officer accepted the declared value. The amount of
duty, as calculated by him, was duly paid. The vehicle was cleared
and released to the applicant and it became its property. That was on
23 November 2015.
In
Case 2: Sylvia
Choruwa v Zimbabwe Revenue Authority
HC138/17, Sylvia Choruwa [“Sylvia”],
the applicant, says the value of her vehicle, as declared by her
agent, was R469,000=. That was picked from some tax invoice. The duty
on such a value would have been US$17,000=. But the Proper Officer
raised the value. The duty on the raised value came to US$20,800=.
The higher amount of duty was paid. The vehicle was cleared. The
agent delivered it to her. That was on 22 March 2016. She
subsequently got the vehicle registered in her name.
In
Case 3: Patrick
Muguti v Zimbabwe Revenue Authority
HC137/17, the declared value was R200,000=. The applicant [“Patrick”]
says this was extracted from a vehicle purchase document. The Proper
Officer rejected it. He raised it to R240,000=. The duty on the
raised value was US$10,180=. It was duly paid. The vehicle was
cleared. The agent delivered it to Patrick. That was on 31 October
2016. Patrick
Muguti said
from then on the vehicle became his personal property.
Subsequently,
in November 2016, the Zimbabwe
Revenue Authority (ZIMRA)
impounded, or threatened to impound and embargo the vehicles unless
and until additional duty, as re-assessed by its officers, together
with penalties for late payments and interest, were all paid in full.
For
Main Road Motors, this development was coming a year after the
vehicle had been cleared and released to it. For Sylvia
Choruwa this
was eight months later. For Patrick
Muguti this
was after six days.
The
Zimbabwe
Revenue Authority (ZIMRA)
said, in post-clearance audits, its officers had discovered several
anomalies in the declarations of value by the applicants, or their
agents, for customs clearance purposes. Basically, it said the
applicants had undervalued their vehicles. They had given false
information concerning the vehicles' models and mileage, basically
making the cars appear much older. For that reason, ZIMRA had
re-calculated the values of the vehicles using guidelines in the
Customs Act and had re-assessed the duty. It had gone on to raise
penalties and interest on the new amounts.
ZIMRA
says post clearance audits are authorised by section 223A of the
Customs and Excise Act [Chapter 23:02].
In subsection [4], the Zimbabwe Revenue Authority (ZIMRA) is
empowered to undertake a post-clearance audit of goods cleared at
entry in order to satisfy itself of the accuracy of any declarations
made on them. In terms of subsection [1], a declaration made for the
purposes of clearance of goods at ports of entry which contains any
omission, inconsistency, error or misrepresentation shall be invalid
whether or not such declaration has been accepted by an officer.
Subsection [3] says that any goods not properly declared shall be
deemed to be uncustomed goods. Un-customed goods, among other things,
are dutiable goods on which the full amount of duty has not been
paid.
In
terms of section 192 of the Customs and Excise Act [Chapter 23:02],
ZIMRA is empowered to seize or embargo goods in respect of which the
correct amount of duty has not been paid.
The
Zimbabwe Revenue Authority (ZIMRA), through its deponent, one William
Gadzikwa [“William”],
at the relevant time the Acting Regional Manager, Customs and Excise
Region 3, and in equally expansive and argumentative affidavits,
explained that owing to the large number of goods that pass through
the borders requiring customs clearances, ZIMRA has an enormous task
to check, scrutinise, assess and collect duty. Mistakes are sometimes
made. It was in appreciation of the difficult circumstances that its
officers operate under that the Legislature, in section 223A, and
others, clothed ZIMRA with powers to conduct post-clearance audits
and to recover any underpayments of duty.
The
applicants did not accept the Zimbabwe Revenue Authority's (ZIMRA)
demands. In February 2017, Main Road Motors and Sylvia
Choruwa filed
an urgent chamber application to bar ZIMRA pendente
lite
from impounding and embargoing their vehicles.
The
lite
said
to be pending were these applications.
The
urgent chamber applications failed on the points in
limine.
Under judgment HMA17-17 I dismissed them on three grounds, namely,
that the proper respondent had not been cited; that the certificate
of urgency was incurable; and that the matters were not urgent, in
the sense that the applicants had themselves not treated them as
such. The details appear in the judgment.
In
casu,
the applicants do not accept ZIMRA's argument about post clearance
audits. They say that once the vehicles had been customs-cleared and
released to them, they had become their personal properties. Any
attempt to seize and embargo them as ZIMRA had done, or had purported
to do, was unlawful, because such conduct violated their in-alienable
right to property as enshrined in section 71 of the Constitution.
Section
71(3) of the Constitutions says:
“Subject
to this section, and to section 72, no person may be compulsorily
deprived of their property except where the following conditions are
satisfied –”
The
Zimbabwe Revenue Authority (ZIMRA) justified its actions on section
192(1) of the Customs and Excise Act [Chapter 23:02].
William Gadzikwa stressed that the power to seize and embargo goods
in post-clearance audits can be exercised at whatever place, and from
whomsoever those goods are found, within a period of six years from
the date of importation.
In
full, section 192(1) of the Customs and Excise Act [Chapter 23:02]
reads:
“192
Embargo on goods which have passed out of customs control
[1]
If, at any time, an officer has reason to believe that the correct
duty has not been paid on any goods which have passed out of customs
control, or that there has been or may be in respect of those goods a
contravention of any of the provisions of this Act or any other law
relating to the importation of goods, he may, within
a period of six years from the date of importation,
removal from bond or delivery from factory in the case of excisable
goods, seize or place an embargo on those goods, wheresoever or in
possession of whomsoever found, and until the embargo has been
withdrawn no person shall remove such goods from the place indicated
by the officer or in any deal therewith, except with the permission
of the officer.” [emphasis
by counsel for both parties]….,.
The
applicants say section 192[1] of the Customs and Excise Act [Chapter
23:02]
is
ultra
vires
section 68(1) of the Constitution. Section 68[1] of the Constitution
says:
“Every
person has a right to administrative conduct that is lawful, prompt,
efficient,
reasonable,
proportionate,
impartial and both substantively and procedural fair.” [emphasis
by applicants' counsel].
The
applicants argued that seizing and embargoing goods one year [in the
case of Main Road Motors] and eight months [in the case of Sylvia
Choruwa],
after customs clearances, was the anti-thesis of promptness,
efficiency and reasonableness….,.
The
Zimbabwe Revenue Authority (ZIMRA)
responded in full to the merits of the applications but also raised
several technical objections….,.
At
the hearing, counsel agreed that the points in
limine,
or at least some of them, went to the root of the applications. As
such, they further agreed that a determination be made on them before
the merits could be considered.
I
agreed.
