MTSHIYA
J:
On
10 April 2013 the applicant filed this application for the following
relief:
“1.
The decision of the 1st
Respondent of the 20th
of December 2012 directing the Applicant to pay duty in the sum of
US$219 437.62 and a penalty of the same amount be and is hereby set
aside.
2.
The costs of this application shall be borne by the Respondents
jointly and severally one paying the other to be absolved”.
The
first, second and third respondents all filed their notices of
opposition to the application on 25 April 2013.
The
background to the relief sought is that following investigations,
which are common cause to the other parties, the first respondent
directed the applicant to pay duty totalling US$219,437-62 together
with a penalty in the same amount in respect of goods it alleged the
applicant had fraudulently imported into the country. The applicant,
a non-profit making organisation engaged in humanitarian work, is, in
law, “entitled to a rebate or refund of duty on such goods as the
Commissioner General of the first respondent may approve”.
On
27 September 2012, the first respondent, the Zimbabwe Revenue
Authority (ZIMRA), seized 27 wire rolls weighing about 14.096 tonnes
and 387 rolls of barbed wire weighing about 20 tonnes from the
premises of the third respondent. The third respondent was one of the
applicant's approved suppliers. The goods were seized “on
suspicion that although a rebate of duty had been applied for and
granted, the goods were not destined for consumption or use in an aid
or technical co-operation project” in which the applicant was
involved. That led to investigations by both the applicant and the
first respondent. In the main the findings were that:
“19.1
During the period extending from March 2011 – September 2012
fraudulent purchase orders in the name of Care
International
had been raised by the 2nd
Respondent, who was employed as a Procurement Supervisor by Care
International.
The purchase orders raised were neither processed nor approved by
Care
International
in terms of its procurement procedures”.
On
20 December 2012, following the conclusion of the investigations, the
first respondent then wrote to the applicant in the following terms:
“RE:
POST CLEARANCE AUDIT 2009-2012: CARE ZIMBABWE
I
refer to the Post Clearance Audit exercise which our office was
conducting on your organisation.
Please
be advised that CARE Zimbabwe is being held responsible for the
payment of duty totalling to USD219,437.62 plus a penalty of
USD219,437.62. These amounts are arising from all the importations
done by your organization and were not properly sanctioned in terms
of sec 122 of the Customs and Excise (General) Regulations 2001,
REBATE OF DUTY ON GOODS IMPORTED BY A FOREIGN ORGANISATION UNDER AN
AID OR TECHNICAL COOPERATION AGREEMENT. As per our meeting in the
morning, please note that we will be waiting for your feedback by the
4th
of January 2013.
I
wish to thank you so much for your co-operation during the exercise.
Let
me take this opportunity to remind you that goods cleared under the
said rebate shall not be disposed of other than for the purpose for
which the rebate was granted without authority from the Commissioner
General.
Please
feel free to contact the ZIMRA office for further information and
clarification on the above case.
Yours
faithfully
L.
Chibika (Ms)
For
Regional Manager Customs and Excise Region 1”
It
is the decision contained in the above letter that the applicant
seeks to have set aside.
A
number of points in
limine
were raised by all the respondents. In the main, in its opposing
affidavit, the first respondent raised three main points in
limine.
These were that:
(a)
The applicant had not complied with s 196(1) of the Customs and
Excise Act [Chapter
23:02]
(“the Act”);
(b)
The applicant had not exhausted domestic remedies; and
(c)
The applicant was approaching the court with dirty hands.
The
first point in
limine
raised by the first respondent, is of crucial importance, because,
all the other points can only be dealt with if the applicant is
properly before the court. That includes points raised by other
respondents. To that end, the first respondent averred:-
“6.1
The Application before this Honourable Court is premature and
irregular. I aver so because Applicant has not complied with the
mandatory provisions of section
196(1) of the Customs Act.
The said section makes it mandatory that before instituting
proceedings against the 1st
Respondent one shall
first give sixty days notice of its intention to institute civil
proceedings against the 1st
Respondent before the proceedings are instituted..
6.2
In the present case, the Applicant has not given any notice to the
1st
Respondent as required by the said section as read with the State
Liabilities Act [Chapter 8:14].
6.3
Over the years it has been the approach of this Honourable Court that
the failure to give the required notice renders the application
fatally defective, and I aver that the present case is no exception
and it should be dismissed.
6.4
I am further advised that no court of law has the discretion to
dispense with strict compliance with the provisions of a statute.
Again it follows that the present application is invalid for want of
compliance with section
196 (1) of the Act.
6.5
On the above basis this application ought to the dismissed with
costs”.
However,
notwithstanding the fact that the other points in
limine
raised by the other respondents depend on the determination of the
first point in
limine
raised by the first respondent, I shall briefly state them herein.
The
second respondent, who did not attend the hearing, also raised a
number of points in
limine.
However, he being in default at the hearing and therefore barred,
detailing his points in
limine
will not serve any purpose.
The
third respondent's points in
limine
were given as follows:
“4.
The deponent to the Applicant's affidavit has no authority to act
on behalf of the Applicant. He has not given this honourable court
proof of such authority nor has he made the necessary averment that
could clothe him with authority. Accordingly the application is
improperly before Court.
5.
Secondly, the 3rd
Respondent has wrongfully been made a party to these proceedings as
no specific and substantive relief is being sought from it. 3rd
Respondent has been inconvenienced and made to suffer unnecessary
costs.
6.
Accordingly, this application is an abuse of Court process and should
be dismissed with cots on a legal practitioner and client scale”.
As
the first point in
limine
raised by the first respondent is to the effect that there is no
valid application before the court, it is therefore imperative to
start by examining that point. That is important because if that
point is upheld, everything else in
casu
will, in my view, indeed fall away. Upholding the point in
limine
will mean that the application is fatally irregular and cannot be
entertained.
It
is important to proceed by indicating the exact provisions of the law
that the first respondent is relying on in raising its first point in
limine.
Sections
6 and 7 of the State Liabilities Act [Chapter
8:14]
provide as follows:
“6.
Notice
to be given of intention to institute proceedings against State and
officials in respect of certain claims
(1)
Subject to this Act, no legal proceedings in respect of any claim for
–
(a)
money, whether arising out of contract, delict or otherwise; or
(b)
the delivery or release of any goods;
and
whether or not joined with or made as an alternative to any other
claim, shall be instituted against –
(i)
the State; or
(ii)
the President, a Vice-President or any Minister or Deputy Minister in
his official capacity or;
(iii)
any officer or employee of the State in his official capacity;
unless
notice in writing of the intention to bring the claim has been served
in accordance with subsection (2) at least sixty days before the
institution of the proceedings.
(2)
A notice referred to in subsection (1) –
(a)
Shall be given to each person upon whom the process relating to the
claim is required to be served; and
(b)
Shall set out the grounds of the claim; and
(i)
Where the claim arises out of goods sold and delivered or services
rendered, shall specify the date and place of the sale or rendering
of the services and shall have attached copies of any relevant
invoice and requisition, where available; and
(ii)
Where the claim is against or in respect of an act or omission of any
officer or employee of the State, shall specify the name and official
post, rank or number and place of employment or station of the
officer or employee, if known.
(3)
the court before which any proceedings referred to in subsection (1)
are brought may condone any failure to comply with that subsection
where the court is satisfied that there has been substantial
compliance therewith or that the failure will not unduly prejudice
the defendant.
(4)
For the purposes of this section, legal proceedings shall be deemed
to be instituted by the service of any process, including a notice of
application to court and any other document by which legal
proceedings are commenced, in which the claim concerned is made.
7.
Exemptions
Section
six shall not apply to –
(a)
a claim in which the debt concerned has been admitted to the
claimant, expressly and in writing; or
(b)
a counter-claim; or
(c)
a claim which the court or a judge or magistrate, on application, has
determined to be urgent; or
(d)
a claim in respect of which the defendant has waived, expressly and
in writing, the notice required by section six”.
The
above exemptions are not relevant in
casu.
Section
196 of the Customs and Excise Act (“the Act”) as amended by Act
No. 17 of 1999 provides as follows:-
“196
Notice of action to be given to officer
(1)
No civil proceedings shall be instituted against the State, the
Commissioner or an officer for anything done or omitted to be done by
the Commissioner or an officer under this Act or any other law
relating to customs and excise until sixty days after notice has been
given in term of the State Liabilities Act [Chapter
8:15].
(2)
Subject to subsection (12) of section one
hundred and ninety-three,
any proceedings referred to in subsection (1) shall be brought within
eight months after the cause thereof arose, and if the plaintiff
discontinues the action or if judgment is given against him, the
defendant shall receive as costs full indemnity for all expenses
incurrent by him in or in respect of the action and shall have such
remedy for the same as any defendant has in other cases where costs
are given by law”.
Section
2 of the Act defines the Commissioner referred to in s 196(1) above
as follows:
“Commissioner”
means
-
(a)
the Commissioner in charge of the department of the Zimbabwe Revenue
Authority which is declared in terms of the Revenue Authority Act
[Chapter
23:11]
to be responsible for assessing, collecting and enforcing the payment
of duties in terms of this Act; or
(b)
the Commissioner-General of the Zimbabwe Revenue Authority, in
relation to any function which he has been authorised under the
Revenue Authority Act [Chapter
23:11]
to exercise”.
The
above definition creates a link between the Act and the Revenue
Authority Act [Chapter
23:11],
particularly when read together with ss 38 and 39 of the Revenue and
Authority Act.
Sections
38 and 39 of the Revenue and Authority Act provide as follows:
“38
Savings
Where,
before the fixed date –
(a)
the Commissioner of Taxes; or
(b)
the Director of Customs and Excise; or
(c)
an officer, proper officer or revenue officer;
made
any assessment or decision, or issued any notice or directive, or did
any other thing whatsoever in terms of an Act specified in the First
Schedule, and that assessment, decision, notice, directive or other
thing had or was capable of acquiring effect immediately before the
fixed date, it shall be deemed to have been made, issued or done, as
the case may be, by the appropriate Commissioner or officer in terms
of the Act concerned as amended by this Act, and shall continue to
have effect or to be capable of acquiring effect, as the case may be,
accordingly.
39
Construction
of certain references
Any
reference in any enactment, other than a provision of an Act amended
by the Third Schedule, or in any document to –
(a)
the Director or Controller of Customs and Excise, shall be construed
as a reference to the Commissioner in charge of the department which
is declared in terms of subsection (2) of section twenty-one
to be responsible for assessing, collecting and enforcing the payment
of duties under the Customs and Excise Act [Chapter
23:02];
(b)
the Department of Customs and Excise, shall be construed as a
reference to the department referred to in paragraph (a);
(c)
the Commissioner of Taxes -
(i)
in relation to value added tax, shall be construed as a reference to
the Commissioner in charge of the department which is declared in
terms of subsection (3) of section twenty-one
to be responsible for assessing, collecting and enforcing the payment
of the value-added tax leviable under the Value Added Tax Act
[Chapter
23:12];
(ii)
in relation to any other tax or impost, shall be construed as a
reference to the Commissioner in charge of the department which is
declared shall be construed as a reference to the Commissioner in
charge of the department which is declared in terms of subsection (2)
of section twenty-one
to be responsible for assessing, collecting and enforcing and
enforcing the payment of the taxes leviable under the Income Tax Act
[Chapter
23:06];
(d)
the Department of Taxes, shall be construed as a reference to the
department referred to in paragraph (c)”.
In
view of the foregoing clear provisions of the law, there can be no
doubt that the Commissioner referred to in s 196(1) of the Act is the
Commissioner-General responsible for the supervision and management
of the first respondent.
It
is common cause that the notice referred to in s 196(1) of the Act
was not given to the Commissioner General or first respondent before
the filing of this application.
The
first respondent is an authority established in terms of s3 of the
Revenue Authority Act [Chapter
23:11]
and its functions are given under s4 of that Act as follows:
“4.
Functions
and powers of Authority
(1)
The functions of the Authority shall be –
(a)
to act as an agent of the State in assessing, collecting and
enforcing the payment of all revenues; and
(b)
to advise the Minister on matters relating to the raising and
collection of revenue; and
(c)
to perform any other function that may be conferred or imposed on the
Authority in terms of this Act or any other enactment.
(2)
For the better exercise of its functions, the Authority shall have
the power, subject to this Act, to do or cause to be done, either by
itself or through its agents, all or any of the things specified in
the Second Schedule, either absolutely or conditionally and either
solely or jointly with others”.
The
operations of the authority are supervised and managed by a
Commissioner-General, whose functions are stipulated under s19(4) of
the Revenue Authority Act as follows:
“(4)
The Commissioner-General shall be responsible, subject to the Board's
control, for –
(a)
supervising and managing the Authority's staff, activities, funds
and property; and
(b)
performing such other functions as the Board may assign to him or as
may be conferred or imposed on him by or under this Act or any other
enactment”.
There
is no dispute regarding the position or authority of the
Commissioner-General in relation to the transition from the former
office of Director or Controller of Customs and Excise under the Act.
The authority, as agent of the State and under the supervision and
management of the Commissioner-General, is charged with carrying out
the functions spelt out in the Act and also in s19(4) of the Revenue
Authority Act as quoted above. That explains the continued protection
granted under ss 196 and 6 of the Act and the State Liabilities Act
respectively.
It
was argued that in enacting the Revenue Authority Act, parliament was
already aware of the provisions of s196 of the Act as amended by Act
No.17 of 1999, but it did not deem it necessary to expressly extend
the protection to the new entity called the Zimbabwe Revenue
Authority (i.e. first respondent).
That
argument, however, does not go far to explain why the legislature did
not expressly remove the protection from the agent of the State, now
seized with exactly the same functions that were formerly executed by
the department of Customs and Excise. It cannot be denied that the
authority (first respondent) is as an agent of the State, and
continues to carry out the functions of the former department of
Customs and Excise. The law protecting the former officers and the
former department of Customs and Excise is still in our statutes. The
protection has been retained for the benefit of the first respondent
and its officers.
It
is important at this stage to also take note of the endorsement on
the official Notice of Seizure issued to the applicant on 27
September 2012. The relevant endorsement reads as follows:
“If
you wish, you may, within three months from the date of this notice,
make your own written representations to the Port Manager of the Port
shown on this notice, for the release of the goods.
Additionally
or alternatively you may, within three months from the date of this
notice and subject to the submission of written notification 60 days
beforehand in terms of the provisions of section 196 of the Act,
institute proceedings for the recovery of the goods from the
Commissioner or for the payment of compensation in respect of any
dangerous or perishable goods which have been disposed of by the
Commissioner.
If
the Commissioner does not release the goods following representations
made by you or if you do not institute proceedings within the period
specified, any goods declared to be forfeited will become the
property of the State without compensation”.
The
endorsement on the seizure notice cannot be taken lightly. It
explains the law and those affected, like the applicant, should obey
the mandatory provisions of the law. There was therefore a clear need
on the part of the applicant to give the requisite notice to the
first respondent before making this application. Failure to give the
notice was, in my view, fatal. There is therefore no proper
application before the court and as already stated, upholding this
point in
limine,
means that the court cannot proceed to do anything else. I liken this
position to a situation, where, in an urgent application, the court,
upon making a finding that there is no urgency, cannot proceed to the
merits.
I
am also unable to ignore the authorities relied on by the first
respondent, namely Tasmine
P/L
v Zimbabwe
Revenue Authority
HB115/09, Ronald
Machacha v
Zimbabwe
Revenue Authority
HB186/11, Puwayi
Chiutsi v
Commissioner
of Police and Zimbabwe Revenue
Authority
and Anor,
HH65/05
and
Bethy
Dube v
ZIMRA
HB2/14,
where the need to comply with s 196(1) of the Act was emphasized.
In
Puwayi, supra,
Bhunu J said:
“Apart
from the need to exhaust domestic remedies before approaching the
courts section 196 precludes the applicant from approaching the
courts before observing laid down procedures …… As the laid down
60 days period has not yet expired this application is ill-conceived
and premature. The section is mandatory and admits of no exception
because it constitutes a prohibition without making provision for any
exception”.
In
addition to the mandatory need for notice, I fully associate myself
with the above.
I
agree with the first respondent that there is no valid application
before the court and accordingly the rest of the other issues raised
by the respondents cannot be delved into. This finding estoppes me
from going any further.
I
therefore order as follows:
1.
The first point in
limine
raised by the first respondent be and is hereby upheld.
2.
The application is not properly before the court and is therefore
dismissed with costs.
Wintertons,
applicant's legal practitioners
Kantor
& Immerman,
1st
respondent's legal practitioners
Mbizo
Muchadehama & Makoni,
3rd
respondent's legal practitioners
Mr
Desmond Maninimini
Flat
200 Block 37
Zambezi
Flats, Mabelreign, Harare
