The facts were these.
The applicants, at different times, and using their agents
and relatives, had bought the motor vehicles from South Africa and imported
them into Zimbabwe. They said the vehicles were for personal use. In Case 1,
the vehicle was a 2012 Toyota Fortuner. The applicant said it had bought it for
ZAR112,500=. ...
The facts were these.
The applicants, at different times, and using their agents
and relatives, had bought the motor vehicles from South Africa and imported
them into Zimbabwe. They said the vehicles were for personal use. In Case 1,
the vehicle was a 2012 Toyota Fortuner. The applicant said it had bought it for
ZAR112,500=. According to the respondent, that would translate to US$7,920= at
the then prevailing rate of exchange. The vehicle was imported on 25 November
2015. The Proper Officer assessed the duty at US$5,121=07.
A Proper Officer is the designated officer at a port of
entry. His assessment was based on the applicant's declared value, namely, the
purchase price.
In Case 2, the vehicle was a 2015 Toyota Land Cruiser
Prado. It was imported on 21 March 2016. The applicant said she had bought it
for ZAR469,000=. That would translate to US$28,615=. The duty would be US$17,000=.
However, the Proper Officer rejected the applicant's value as being too low. He
re-assessed the duty at US$20,800=. Only after the applicant had paid the
higher amount was the vehicle cleared.
After customs clearances, the applicants said they went on
to enjoy the use of their vehicles. In Case 2, the applicant went on to
register it in her name. However, the enjoyment was short-lived. The respondent
was soon after them, and several others who had imported vehicles between
January 2014 and June 2016. He first published a public notice in all national
print media on 27 July 2016. In it he announced that he was carrying out a post
clearance audit in respect of motor vehicles imported during that period. He
then said he was requesting all owners of vehicles imported during that period
to approach the Zimbabwe Revenue Authority to get confirmation of proper
clearances, and to regularise the clearances if they were found to be contrary
to the applicable laws.
After the public notice, the respondent went on to write to
the applicants individually: on 28 November 2016, in respect of Case 1, and on
29 November in respect of Case 2. The respondent insisted that the post-clearance
audits had revealed that the vehicles had been under-declared and that,
therefore, the duty on them under-paid. The applicants had to top-up the duty
or else risk having their vehicles seized. The vehicles would be embargoed
until the correct amount of duty was paid.
In Case 1, the top-up required was US$5,600=63 to which a
penalty in the same amount was levied. That brought the total to US$11,201=26.
Interest would run on the total amount at 10% per annum from the date of
importation.
In Case 2, the top up was assessed at US$6,353=24 and the
penalty at US$1,588=31. Interest would also run at 10% per annum from the date
of importation.
The respondent said 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 un-customed goods. Un-customed goods, among
others, 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], the Zimbabwe Revenue Authority (ZIMRA) is empowered to seize or embargo
goods in respect of which the correct amount of duty has not been paid. That
power can be exercised at whatever place, and from whomsoever those goods are
found, within a period of six years from the date of importation.
The respondent explained that owing to the large number of
goods that pass through the borders requiring customs clearances, the Zimbabwe
Revenue Authority 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 of the Customs and Excise Act [Chapter 23:02], and others, clothed the
Zimbabwe Revenue Authority with powers to conduct post-clearance audits and to
recover any underpayments of duty.
The applicants' case, on the advice of their lawyers, was
that the Zimbabwe Revenue Authority did not have such powers to conduct post clearance
audits.
It turned out that the lawyers had not kept themselves
abreast with legislative changes.
Section 223A of the Customs and Excise Act [Chapter 23:02]
was an addition to the Act in 2014. When they first challenged the Zimbabwe
Revenue Authority's intention to embargo the vehicles, the lawyers had been
unaware of that amendment. When it was brought to their attention, they
challenged the Zimbabwe Revenue Authority's conduct on the basis that once it
had assessed and had received the duty on any imported non-merchandise goods,
and the owner had assumed ownership of such goods, it was illegal for the
Zimbabwe Revenue Authority to start interfering with such ownership. They
argued that the owner would have acquired a right over those goods under section
71 of the Constitution. It was also argued that section 223A of the Customs and
Excise Act [Chapter 23:02] does not apply to goods imported for private use.
The respondent said the applicants were ill-advised. It
repeated its arguments on the provisions and import of section 223A, as read
with section 192 of the Customs and Excise Act [Chapter 23:02]. It also argued
that section 223A made no distinction between brand new goods or second-hand
imports; or between goods for re-sale and those for private use.
In both cases, the respondent submitted that during the
post-clearance audit, the investigations by his officers had revealed that the
applicants had bought the vehicles for much more than they had declared. He
said despite several requests, the applicants had failed, or neglected, or
refused to submit the actual bills of lading or some such other documents as
would have proved the actual purchase prices. At any rate, he said, his
officers had confirmed with their South African counterparts that the
applicants had paid much more for the vehicles than the amounts they had
declared. Furthermore, he had made comparisons, as he was entitled to do, with
vehicles of the same make, type, model and condition as the applicants', either
through the internet or from his records of imports by others, and had
discovered that the applicants' vehicles had been grossly undervalued.
In Case 1, the respondent made the point that contrary to
its declaration that the vehicle was for personal use, the applicant had
already sold it to someone else by the time the respondent was recalling it.
In Case 2, as proof that the declared value for the vehicle
was false, the respondent stressed that even in the founding affidavit, the
applicant had, in several paragraphs, unwittingly given two conflicting figures
as being the purchase price for the vehicle: ZAR469,000= [or US$28,615=] in one
instance, and US$70,000= [or ZAR1,147,540=98] in another.
But before a decision on the merits could be
made, the respondent took four points in limine.
