Giran Bulk Logistics (Pvt) Ltd v Zimbabwe Revenue Authority

### Preamble
1
HH 506-25
HC 3343/24
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GIRAN BULK LOGISTICS PVT LTD

versus

ZIMBABWE REVENUE AUTHORITY

HIGH COURT OF ZIMBABWE

CHITAPI J

HARARE, 5 September 2025

Opposed Court Application

L Madhuku with T Tembani, for the applicant

E Mukucha, for the respondent

CHITAPI J:   The applicant is Giran Bulk Logistics (Pvt) Ltd a duly registered company in accordance with the laws of registered in Zimbabwe.  It carries on the business of importation of fuel.  The respondent is Zimbabwe Revenue Authority, an authority so defined in the Revenue Authority Act, [Chapter  23:11] which creates it.  The principal function of the Authority is to act as an agent for the Government to assess, collect and enforce payment of revenue due to the State of Zimbabwe.  The applicant in the conduct of its business is subject to pay such taxes as may lawfully be imposed by law.  The respondent is authorised to exercise its lawful powers over the applicant in the collection of what is due to the State.

In particular and is so far as it is relevant to this case, the respondent in terms of s 34 of F(a) of the Revenue Authority Act and s 9 (2) of the Customs and Excuse Act[Chapter 23:02] has power where it believes that it is necessary to protect revenue, to enter any business premise and take possession of any documents and records which it considers necessary for purposes of any examination, trial and enquiry to do with revenue issues concerning a tax payer.

The dispute between the parties in this matter arises out of the conduct of the respondent in executing its powers of revenue collection against the applicant.  The applicant seeks that the court should set aside by review process, a special warrant issued against the applicant on 11 June, 2024 and notice of seizure number 027441K issued by the respondent on 9 July 2024.  The two documents were issued in circumstances wherein the respondent averred that it was carrying outs its powers given under the provisions of the law which I have referred to.  That contention is contested by the applicant.

The common cause conduct of the respondent was as follows.  On 22 April 2024 officers of the respondent purportedly acting in furtherance of the respondents mandate to collect revenue carried out a spot visit at the applicants offices in Willowvale.  The respondent described the purpose of the visit in the opposing affidavit in para 6 thereof as:-

“It is in the above context that four (4) ZIMRA officers were assigned on 22 April 2024 to carry out a visit at the Applicants’ premises in Willowvale to search (sic) and take possession of documents and any other thing necessary for the purpose of an investigation into the importation of fuel they transported in transit.”

The respondent also averred that it was authorised under s 223A(4) of the Customs and Excise Act to carry out post clearance investigations where goods have been released on entry to confirm or satisfy itself of the correctness of any particulars made in a declaration vis-à-vis an inspection of the goods so declared.

The respondent averred that its officers as aforesaid enquired of and requested applicants employees to produce clearance documents and proofs of deliveries of fuel which the applicants’ trucks transported in transit.  It was averred that the employees claimed that the applicant runs a tracking system of the trucks and an end of day or z report for each load of fuel carried.  The employees then released to the respondent’s inspectors, files of delivery notes, sales and tax returns.  The respondents inspectors then acknowledged the documents by issuing receipts which detailed the documents surrendered to them.

It was the respondents further averment that its investigations revealed that six transit entries were not supported by documents to evidence the exit of fuel conveyed from Zimbabwe into Zambia.  The respondent requested supporting documents “to include, but not limited to tollgate receipts, Zambia Customs exit ships, signed delivery notes and any other documents relevant to exit of the trucks involved in the six transits.”  The respondent averred that the applicant was at its instance through a letter dated 26 April 2024 granted an extended period to the two days given by the respondent to supply the documents.  The applicant wrote yet another letter of extension dated 20 April 2024.

The respondent averred that the applicant by letter dated 10 May 2024 shifted goal posts and averred that the respondents conduct violated provisions of the Administrative Justice Act [Chapter 10:28] for giving the applicant short period of compliance with the respondents request transit acquittal documentation.  The letter was written by the applicants’ legal practitioners to the respondent.  In the letter it was averred that the respondents charter provided that any response to an issue raised for the respondent to attend to gave the respondent fourteen (14) days to do so.  It was averred that it made sense and logic to give a similar period to a person requested or directed to provide information as in casu.  Thus, it was averred that the two (2) days given to the applicant to supply the requested information was unrealistic.

In relation to the substance of the request for the transit cargo documentation, the applicant averred in the same letter aforesaid that it was impossible to comply therewith because tollgate receipts are system generated and rub off the ink after some months such that they could not be maintained or kept for future reference.  It was submitted that the tollgate tickets did not identify the vehicle to which the ticket relates.

The applicant averred that it could not provide exit slips from Zambian Customs because the applicant had no legal requirement to keep and/or maintain such.  It was averred that the client whose goods are conveyed as per the bills of entry is given exit slips issued by the Zambian Customs Officials.

In relation to delivery notes, the applicant responded in the letter aforesaid that the originals were given to the importer to enable processing of payment since without the delivery note the applicant would not be paid its fees.

The applicants legal practitioner in para 6 of its letter of 10 May 2024 aforesaid then gave three reasons why the applicant must be held to have complied with the law and delivered the consignments to their declared destinations.  Firstly, the ASYCUDA WORLD system which the applicant, the respondent and the clearing agent all use ensures that transit consignments are acquitted at the point of exit.  The applicant averred that consequently, transit goods are monitored by reason of the provisions of s 234(2) of the Customs and Excise Act which reads as follows:

“The owner of any goods in transit shall give sufficient security in the sum as determined by the Commissioner General for the payment of duties on such goods and compliance with the provisions of this Act and any other law relating to the import and export of goods.  Such security shall not be released until evidence has been produced to the satisfaction of the Commissioner General that such goods have been exported.”

The applicant further placed reliance on ss 60(5)(e) and (g) of the Customs and Excise General Regulations S.I 154/2001 wherein it is provided in those sections as follows:

“(e) any goods in transit shall be exported within 3 days or in the case of abnormal loads, 5 days of the date of entry or removal; failing which the goods shall be delivered to the custody of the Authority within that period?

(g) road vehicles conveying goods through Zimbabwe shall have electronic seals placed on their cargo as determined by the Commissioner doors and all other closing systems of the road vehicles shall be fitted with a device which shall facilitate customs dealing.

The applicant averred that the respondent did not raise any issues regarding the exiting of the consignment within 3 and/or 5 days of entry into Zimbabwe, security guarantees or sealing of the doors to the carrier of the consignments.  It was averred that at the port of exit the respondents’ officials acquitted the consignments and removed the seals thus acquitting the consignment.  The applicants legal practitioners legal practitioners then averred that in view of the said submissions there was no legal basis for the respondent to provide the documentation which it demanded.

In response to the letter aforesaid the respondent in its letter dated 17 May 2024 averred that there was no contravention of the Administration Justice Act on the alleged basis of short notice because after the applicant had been given two(2) days to provide the documents sought, it requested for an extension of time of seven (7) days.  The respondent noted that as at the date of its response which was twenty (20) days post the making of the demand for the documentation, the applicant had still not complied therewith.

The respondent averred that it had a legal basis to seek or demand the information in question.  It averred that it was within its power given in s 9(2) and 223 of the Customs and Excise Act.  It is common cause that s 9(2) provides for general powers of the respondents’ officers to stop and search any person or vehicle for evidence of the commission of any offence so defined in terms of the Customs and Excise Act.  Section 223A provides for the respondents power to conduct a post clearance audit of goods previously cleared at the port of entry to verify the accuracy of documentation or information provided in the declaration made by the importer.  It is also common cause that s 223 provides for the duty of the importer to keep proper books of accounts.

The issues which falls for determination are firstly the legality of the alleged imposition of duty through the issue of the special warrant.  Secondly, whether the respondents decision is irrational for reasons advanced by the applicant.  On the issue of illegality, the applicant averred that there was no enabling provision in the Customs and Excise Act which permitted the imposition of duty through the issue of a special warrant.  On the issue of irrationality, the applicant averred that the decision of the respondent was so unreasonable that no reasonable person applying his/her mind to the facts and circumstances of the case would have reached such a decision.  The contentions of the applicant in that regard were as follows:

that the respondent could have but did not invoke other provisions of the Customs and Excise Act to obtain the documents which it demanded of the applicant to produce or to reach a workable solution with the applicant and resolve the matter otherwise than by issue of a special warrant.

that the respondent simply picked up figures from the hat or randomly without regard to the practicality of and/or ability of the taxpayer to pay the figure demanded.

that the respondent did not give regard to the fact that transit consigned goods meant to exit Zimbabwe had electronic seals fitted by the respondents officers and would be removed by the respondents officers at the port of exit with the fuel being tested by the respondents officials after which the consignment would then be cleared for exit.

The respondents position was that there was neither illegality in its decision nor was the decision irrational.  The respondent averred that the information that it requested of the applicant which was to produce documents fell into the kind of information which the respondent is permitted under ss 9 and 223 of the Customs and Excise Act to demand of an importer or person required to account for imports or exports as the case may be.  The respondent averred that the special warrant was issued to the applicant under the provisions of s 34 of the Customs and Excise Act.  The respondent also averred that the information which it sought from the applicant fell within the purview of the provisions of ss 9 and 223 as it constituted “records” as provided for in that section.

The necessary background facts of this application is that in its letter to the applicant dated 25 April 2024, the respondent noted that it was involved in an ongoing review of the applicants fuel mportations.  The respondent noted that from documents available and analysed, there appeared to be “inadequate acquitted documents validating that the goods in transit were removed and delivered to their intended destination.  The identified consignments as of that date were six (6) in number as listed in the letter aforesaid. The respondent advised the applicant that the “transported loads have inadequate acquittal documents validating that the goods were removed in transit and delivered to their intended destinations out of Zimbabwe”.  the respondent then made a request as follows after listing the consignments.

“Kindly provide documentary proof within 2 days that the above detailed transit consignments exited Zimbabwe.  the documentary proof required includes (but not limited to) tollgate slips.  Inkomo; Licons Ben), Zambian Customs (Chirundu) exit slips; signed delivery notes etc.”

The letter advised the applicant that a failure to provide the proofs sought would lead to the respondent dealing with the consignments as not properly cleared.

I have already noted in the judgment that the applicant did not protest the legality of the respondents’ request but requested extended time for compliance.  It is now common cause that the applicant made an about turn through its legal practitioners thereby questioning the legality and rationality of the respondents’ request.  The applicants position as set out in the founding affidavit advances a different reason for the failure to provide the documents requested by the respondent. The applicant stated as follows in para(s) 13, 14 and 15 of the founding affidavit;

“13. Suddenly, without having received any of the documents it had been requested, respondent issued that special warrant in issue; special warrant dated 11 June 2024 imposing duty in the sum of US$905 225.86 (including interest).  I attach the special warrant as Annexure II.

14. It is clear that the special warrant of 11 June 2024 was the implementation of the threat in the closing paragraph respondents letter of 17 May 2024 which read:

“You are therefore required to submit the information requested in the letter dated 25 April 2024 by Monday 20 May 2024 failure of which we will proceed to make the necessary decisions with the information currently at our disposal.”

15. In the foregoing closing paragraph, the respondent is admitting that it did not have sufficient information yet from the correspondences I have attached, applicant no longer had the documents because they had been confiscated by the Respondent.  The Respondent was therefore asking for documents it knew could not be availed by applicant.”

Significantly, from the above deposition the applicant does not say that it could not access the documents.  It does not state that it did not have them.  It stated that the documents were confiscated by the respondents thereby inhibiting the applicant from producing them.

The issue of whether the respondent can carry out a post clearance verification or audit is answered by s 223A(4) of the Customs and Excise Act.  The provisions of the section say:

“(4) The Commissioner after releasing the goods subject to entry and in order to satisfy himself as to accuracy of the particulars contained in the declaration; may undertake a post clearance audit in relation to these goods; that is to say, he or she or any officer or person authorized by him or her in writing may-

(a) carry out inspections at the premises of the owner of the goods or at the place to which the goods are destined or at the premise where any documentation or data relating to the goods in question is located or may reasonably be expected to be found.

(b) question any person at any premises or place referred to in para (a) of any having possession or custody of the documentation or data there referred to.

(c) at any premises or place referred to in para(a) inspect or examine the goods; and any books, written records, computer records, computer records and other data or documentation relating to the import, export or subsequent disposal of the goods in question;

(d) take possession of and remove or make extracts from or make copies of the records, data or documentation referred to in para(c)”

What is clear from the quoted provisions is that the powers of the respondent therein given are intended for the respondent to confirm the authenticity and accuracy of the declaration made by the importer on entry.  The confirmation of the accuracy and authenticity of the declaration is made by reference to the inspection of the premises of the owner of the goods or the premises where the documents are destined or the inspection of the place where data or documentation relating to the goods is located or may reasonably be expected to be located.  The respondent may question any person who has possession of the documentation or data found at the inspected premises or place.  The respondent may also inspect or examine “the goods and any books, written records, computer records and other data or documentation relating to the import, export or subsequent disposal of the goods in question.”   Lastly, the respondent may take possession of and remove from the premises or make copies of the records, data or documentation found on inspection.

From the foregoing it is also clear that the above provisions do not provide for any power on the part of the respondent to demand further documentation relating to the declaration.  If such power be said to be there, then, it is not there by virtue of the provisions of s 223A.  The provisions section 223 provide for checks on documents relating to a declaration already made.  Its does not create a duty on the importer to provide further evidence of importation or exportation.  The provisions do not speak to consequences of any failure by the importer to provide further documents or data to the ones found upon inspection.  The provisions cannot be used to threaten adverse consequences against the importer if the importer does not produce any additional documents or data.  A demand made to produce further documents would fall outside the scope of the provisions of s 223A as read.

The respondent averred that it levied whatever duty was due on the consignments in issue in terms of ss 34, 38 and 193(6)(c) of the Customs and Excise Act [Chapter 23:02].  Without copying down the provisions of ss 34, 38 and 193(6)(c) a reading of the ss show that s 34 is a general provision which provides for persons who are liable for duty.  It places the liability for payment of duty upon the master of a ship, the pilot of an aircraft or the owner of the goods or person in charge of any vehicle which will be conveying the goods.  Where liability for payment of duty does not rest on persons referred to then the importer is the one liable for duty.

Section 38 is a general section which provides for “No importation without entry” so headed.  Subsection (1) of s 38 provides that:

“(1) No goods shall be imported into Zimbabwe without entry being made and without duty being paid or secured.”

The provisions of subsections (2) and (3) which I do not copy down prohibit the removal of any unaccustomed goods placed in a customs or transit shed without written authority from an officer of the respondent.  Similarly, no carrier of unacustomed goods including operators of a pipeline may remove, discharge or permit the removal of unaccustomed goods without written permission of the respondent’s officer.  The provisions of s 38 are therefore clearly irrelevant to the issues for determination herein because there is no allegation that the goods in issue herein were unlawfully removed from the customs area or transit shed.  It was certainly not the respondents stance or allegation that the first respondent or its proxies did not make entry of the consignments in issue as required under s 39 of the Act.  The reliance by the respondent that it acted under s 38 of the Act is therefore, no untenable.  In other words, the powers under which the respondent purported to levy the duty demanded by the applicant is not a derivative power granted under s 38 of the Act.

In relation to the provisions of s 193(6)(c) of the Act which again the respondent relies upon for its conduct it is noted that section 193 generally, provides for “Procedure as to seizure and forfeiture” and is so headed.  An understanding of subsection (6)(c) of the Act requires that subsection (5) and the (7) of be taken into consideration.  The provisions of subsection 5 and then 6(c) state:

“(5) If an officer has seized articles in terms of subsection (1); or would have seized articles in terms of that subsection but for the fact that he could not find or recover them, he shall report the fact to the Commissioner setting out reasons why he considers such article liable to seize.

(6) Subject to subsection (9) where an officer has reported in terms of subsection (5) the Commissioner may:

(a)…

(b)…

(c) if the articles could not be found or recovered declare that the person from whom the articles would have been seized shall pay to the Commissioner an amount equal to the duty paid value of such articles.

Provided that if any of the articles are of a dangerous or perishable nature, the Commissioner may direct that they be sold out of hand or, if they cannot be sold, that they be destroyed or appropriated to the State.

(7) If any amount referred to in para (c) of subsection.

(6) is not paid on demand, the Commissioner may recover the amount by civil action in a court of competent jurisdiction.”

What is pertinent to note from a reading of the rest of the provisions of s 193 in so far as they may relate to the powers of the respondent exercisable under subsection (6) para (c) of the Act is that the provisions do not provide for seizure of any goods to enforce payment of duty which should have been paid.  The respondent as a punishment against the person who should have paid duty is permitted to levy the duty paid value of the goods concerned as opposed to the duty payable on that value.  In short, the respondent may demand and sue for the value of those goods in the civil courts.

In casu, the respondent issued what it calls a special warrant.  Such warrant so named, does not appear to derive from any provision of the Act.  The respondent did not cite any such provision if it exists.  The applicant argued that there is no such provision.  I did not find any such provision on perusal of the Act.  The respondent’s purported reliance on ss 34, 38 and 193(6)(c) is not in support of the exercise of the respondent purported power of seizure of the applicant’s trucks and trailers as detailed in notice of seizure No 027441K issued on 9 July 2024 a copy whereof is annexed by both the applicant and the respondent to their founding and opposing affidavits respectively.  I make a passing observation that the notice of seizure is vague and embarrassing.  It is directed at a named person and reads:

“You are one hereby notified that the goods described below have been seized in terms of the customs and Excise Act [Chapter 23:02] as amended because there are reasonable grounds for believing that they are liable to seizure.”

The seized goods are then listed.  The applicant is then advised to make written representations to the Pore Manager within three months of the date of seizure for the release of the goods seized.  The notice of seizure does not list the “reasonable grounds on which the goods are seized.”  The challenge which arises by reason of such a vague and embarrassing warrant is that the person seeking the release of the goods does not know the precise grounds for the seizure.  The issue is thereafter handled in a see-saw fashion where grounds for seizure will change from one ground to another.  The grounds for issuing the seizure notice of 9 July 2024 were not given in the notice nor referred to as arising from any specified conduct of the applicant.  I however, exercise caution in that the applicants’ case for release of the seized goods was not based on any attack on the validity of the notice of seizure.  My comments are thus obiter dictum.

The respondent averred in the opposing affidavit that the notice of seizure was issued in terms of the provisions of s 188(2) of the Act.  Indeed s 188 provides that “…any goods which are the subject matter of an offence under this Act shall be liable to forfeiture.”  The provisions of the section do not provide for seizure of the goods but simply provide that such goods may be forfeited.  The powers of seizure must be located elsewhere in the Act.  Similarly, the exercise of powers and procedure for forfeiture are again not provided for in s 188.  Section 188 also creates criminal liability against persons who have used or allowed the use of their vehicles, aircraft or ships to convey goods liable to forfeiture.  Section 188(2) as relied upon the respondent does not detract from the provisions of s 193(6)(c) which the respondent relied upon for its actions.  The provisions thereof should have been followed.  The respondent could not in terms of that section issue a notice of seizure but levy the duty paid value of fuel and sue for recovery of the amount if it remained unpaid or liability was disputed.

The respondent also made reference to s 223 of the Act to justify its demand for the applicant to provide further documents to evidence exit from Zimbabwe of the fuel in issue.  The provisions section of 223 are very wide.  They mandate every person who carries on any business in Zimbabwe which involve handling or dealing in goods to keep within Zimbabwe “reasonable and proper records and books of account in the English language of all his transactions; and

“the bills of entry, bills of lading, rail notes, invoices and all other documents relating to any goods required to be accounted for in terms of this Act or any other law relating to Customs and Excise” and to avail the documents for inspection if required to.

A failure to keep such records as required grounds a criminal charge under subsection (2) of s 223.  The provisions of s 223 therefore do not provide for powers of the respondent to issue  a special warrant or for seizure of goods involved in the matter.  If the respondent acted without statutory basis or power, then its decision was illegal.  That puts paid to the matter.  The decision and conduct are in such a case a nullity.  The issue of irrationality of the decision or procedural impropriety or indeed any other ground of review will not arise.  A nullity cannot be reviewed because the court is blind to it and cannot see it for all purposes although an order to declare a nullity such, may be given for convenience.

The respondent also pleaded that the provisions of s 204 of the Act permitted the conduct of its officers.  The provisions of the section read as follows:

“204 when any goods are stopped, seized or placed under embargo under this Act or would have been so stopped, seized or placed under embargo but for the fact that they could not be found or recovered, and in any proceedings under this Act other than a prosecution, if any question arises as to whether the duties have been paid on the goods or whether the goods have been lawfully imported or lawfully laden or are being lawfully exported, the burden of proof of the affirmative of these facts shall be on the person who owns, owned or claims such goods as the case may be.”

The respondent in para 17:10 of the opposing affidavit averred that on the strength of the above provision, thus: “it follows that “having failed to account for the fuel it transported the applicant must discharged (sic) the burden of proof that it acted within the confines of the law.”

It seems to me that the last part of s 204 is apposite. It provides “…the burden of proof shall be on the person who owns, owned or claims such goods as the case may be.” (my underlining)

The facts as alleged in this application are not that the applicant owned, owns or claims the fuel in issue.  This provision does not relate to a transporter or carrier unless he or she lays claim to the goods in relation to which the issue of lawful importation or exportation or legality of lading arises.  In any event the provisions of the section do not provide for the issue of a special warrant.  Section 204 provides for a presumption that where the issue of the legality of goods which have been stopped, seized or placed under or where the goods would have been stopped seized or placed under embargo arises, the burden to prove lawful importation, lading or exportation rests on the owner of the goods, the person who owned the goods or the person who claims the goods.  The presumption is intended not to place an undue burden on the fiscus to prove the legality thereof because the owner or claimant of the goods would be the one who possesses the facts thereof.  The provision deliberately uses the words, “own owned or claims.”  It cannot under the circumstances be intended that a transporter or carrier of goods is intended to be covered by s 204.  There is no room for such inference or extension of the class of persons intended to be subject to the presumption.

In the result, the applicant has made a case for review and is entitled to an appropriate order setting aside the decision of the respondent.  On the issue of costs the applicant prays for costs on the scale of legal practitioner and client.  There was no jurisdiction pleaded for the issue of such costs.  Punitive costs should not be granted as a matter of course.  They must be justified. In the absence of such justification, where the award of costs is considered to justified, costs must be granted on the court or ordinary scale.  The respondent did not submit any reasons why the general rule that costs follow the event should not be applied.  Accordingly, the respondent should pay court tariff calculated costs.  The matter is disposed of as follows:

IT IS ORDERED THAT

The special warrant dated 11 June 2024 imposing duty of US905 225.85 and liability for payment therefore on the applicant is set aside.

The notice of seizure reference 027441K dated 9 July 2024 placed on the applicant’s trucks and trailers as denoted on the notice is set aside.

The respondent shall pay the costs of the application.

Chitapi J:…………………..

Tembain Gomo Law Practice, applicant’s legal practitioners

Zimbabwe Revenue Authority, respondent’s legal practitioners