Taelon (Pty) Limited v Zimbabwe Revenue Authority & Anor

### Preamble
1
HH182-21
HC 6941/20
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TAELON (PTY) LIMITED

versus

ZIMBABWE REVENUE AUTHORITY

and

A & M ENTERPRISES (PVT) LTD

HIGH COURT OF ZIMBABWE

FOROMA J

HARARE,26 & 30 November 2020 and 21 April 2021

Urgent chamber

E.R. Samukange, for the applicant

T.L. Marange, for the 1st respondent

No appearance for the 2nd respondent

FOROMA J: By way of background to this chamber application it is common cause that the applicant was hired by the second applicant to transport second respondent’s goods from South Africa to Zimbabwe via the Beitbridge border post. Applicant is a company registered according to the laws of South Africa whose address of service is care of 28 Frank Johnson Avenue Eastlea Harare which is the address of its legal practitioners. It is the owner of a Nissan Diesel G300 truck Horse Registration No JB44KVGP with two trailers with the following registration details trailer 2 H2 49BPGP which truck second respondent hired to transport its consignment of goods from SA to Zimbabwe pursuant to a transportation contract on or about the 17th July 2020. The first respondent’s officers on the 19th July 20202 caught the second respondent off loading goods at Ardbennie Mbare from applicant’s aforesaid truck which as it turned out had not been properly imported into Zimbabwe. As a result the first respondent’s officials seized both the truck and remaining consignment under Notice of seizure No. 044688K and No. 044689 for the truck and goods respectively.

Applicant’s representations to the first respondent for the release of its vehicle based on the fact that applicant’s vehicle had merely been hired to transport the consignment and did not know that the second respondent’s representative who was travelling with applicant’s truck driver (the owner of the consignment) had not cleared the consignment. The applicant’s representations were turned down by the first respondent’s Regional Manager who imposed certain conditions for the release of the seized goods and vehicle namely-

Production of an import licence for the MAQ washing powder be called for as part of release terms.

Payment of level 14 fine amounting to ZWL120 000.00.

Payment of duty for the off loaded washing powder amounting to ZWL 2 427 030,59.

Payment 100% fine for the washing powder.

Payment of towing charges of ZWL $43 052.00.

Payment of storage charges.

These payments were to be made by the 24 November 20202 failing which the vehicle would be fortified to the State and disposed of without further reference to applicant.

It is apparent that the conditions for release of the applicant’s truck and trailers does not distinguish the offences allegedly leading to seizure of both the vehicle and the smuggled goods. This was not only improper but was challenged by the applicant who considered the conditions as illegal.

Applicant made representations to the first respondent’s Regional Manager for the release of his vehicle i.e. horse and 2 trailers which as indicated above was turned down. In turning down applicant’s representations the Regional Manager advised applicant that if it was not satisfied to appeal to the Commissioner which applicant promptly did though again unsuccessfully. Suffice it to mention that the Commissioner of Taxes in declining applicant’s appeal reiterated the conditions of release of the truck and trailers as had been imposed by the Regional Manager save for the fact that the compliance date was brought forward to 24 November 2020 from 3 December 2020.

It is important to note that in his reply dated 23 October 2020 turning down the applicant’s appeal the Commissioner advised that the Commissioner’s decision was final and that if applicant was not satisfied with it then applicant could get re-dress from the courts of law. For unclear reasons the Commissioner General’s letter dated 23 October 2020 though addressed to Samukange Hungwe Attorneys was sent via e-mail not to the addressee but  to their client on 30 October 2020.  It is not disputed that applicant’s legal practitioners only received the letter dated 23 October 2020 on 16 November 2020 from their client with instructions to challenge the Commissioner General’s decision. It was for this reason that the court ruled that the matter was urgent despite first respondent’s contest in its affidavit that the applicant’s application was not urgent.

The first respondent in its opposing affidavit raised the following points in limine.

(1)	No security of costs have been furnished

(2)	Failure to comply with s 196 (1) of the Customs and Excise Act [Chapter 23:02]

(3)	Prescription

(4)	Urgency

In regard to (1) above the first respondent’s contention was that applicant is a peregrinus and is required to deposit security of costs in order to found the court’s jurisdiction. As no security has been furnished the application should fail.

In regard to point in limine (2) it is first respondent’s contention that applicant having given 60 days notice to first respondent of its intention to sue it applicant had acted with undue haste as the 60 days had still to run thus making applicant’s application precipitate and consequently improperly before the court.

In regard to the issue of prescription (point in limine No. 3) it was first respondent’s contention that the notice of seizure provides that any proceedings for the release of the trucks and trailers were supposed to be instituted within three months from the date of seizure which period expired on 20 October 2020. The present application having been filed on 24 November 2020 it was so filed after the prescriptive period and should therefore not succeed.

In regard to the issue of urgency first respondent considered that the matter was not urgent given that the decision to forfeit the truck and trailers was made on the 23 October 2020 and waiting a whole moth to challenge the said decision makes any urgency the kind that should be regarded as self-created urgency. Besides first respondent considered that applicant had an alternative remedy i.e to sue for damages should applicant succeed in the proposed review application.

At the hearing I directed the parties to deal first with the issue of urgency for the reason that if the matter was ruled not to be urgent that would be the end of the matter as the matter would not proceed on the merits. Applicant argued that the matter was urgent by reason of the fact that first respondent did not deliver to it on behalf of applicant letter dated 23 October 2020. The said letter was sent to the applicant by e-mail despite the fact that it was addressed to applicant’s legal practitioners. Applicant’s legal practitioner only received a copy of letter dated 23 October 2020 from applicant with instructions to challenge the decision contained in the said letter on 16 November 2020. This position namely failure to deliver its response to applicant’s legal practitioners letter of 7 October 2020 was not challenged by the first respondent. The needful response by applicant’s legal practitioners on 20 November 2020 aimed at saving costs cannot be criticized as sitting upon one’s laurels by the applicant.

It was on the basis of the undisputed failure to respond to applicant’s legal practitioners’ letter that I ruled that the need to act arose no earlier than after 16 November 2020 and that the letter demanding an undertaking not to act in terms of the threatened forfeiture and disposal was an appropriate step to save costs. I accordingly found that the matter was urgent and proceeded to hear it as an urgent application.

First respondent did not move that it be heard in respect of the remaining points in limine and was content to deal with the matter on the merits.

On the merits applicant argued that the first respondent could not order forfeiture and disposal of the applicant’s truck and trailers before a notice given by applicant in terms of section 196 had expired as s 193 (12) (a) of the Customs and Excise Act [Chapter 23:02] prohibits such course of action pending any action instituted or contemplated or if such proceedings have been instituted, until they have been concluded in his favour. Reduced to its barest minimum once a notice of intention to institute action against the Commissioner General for the release of seized goods is given the Commissioner General is prohibited by section 193 (9) (3) to declare all or any of the articles to be forfeited.

The argument by respondent that the claim for release from seizure had prescribed by 20 October 2020 cannot avail the first respondent as prescription could not run when the first respondent had granted conditional release from seizure up to 24 November 2020. Accordingly, once notice in terms of s 196 of the Customs and Excise Act [Chapter 23:02] had been given on 20 November 2020 the first respondent could not proceed to declare forfeit goods seized pending any action contemplated in terms of section 193 of 12 (a) as this is prohibited by section 193 (9) (a) of the Act aforesaid.

Clearly therefore applicant succeeded in proving a prima facie case for the provisional order. The Com missioner General’s order of forfeiture as contained in his letter dated 23 October 2020 was precipitate and not supported by the Statutory provisions applicable.

First respondent’s other points in limine namely failure to deposit security to found jurisdiction and also instituting a claim against first respondent before the expiry of the 60-day notice call for consideration.

The issue of security for costs though raised was not argued by the first respondent. Section 196 (1) provides that no civil proceedings shall be instituted against the State, the Commission or an officer for anything done or omitted to be done by the Commission or an officer under this Act or any other law relating to Customs and Excise until 60 days after notice has been given in terms of the State Liabilities Act [Chapter 8:15]. The defence pleaded by first respondent in the point in limine under discussion is not available to first respondent as applicant   has not yet instituted the action  contemplated against the first respondent. It has only intimated an intention to do so. The provisional order sought by applicant is not in the class of civil proceedings against the State or first respondent in that by its nature it is a mandamus.

The applicant seeks an order by way of an interdict for the preservation of goods the subject of its proposed action. For all we know such contemplated civil claim may not come to fruition if the first respondent before the expiry of the 60 days notice tenders amends to applicant. Besides the only bar to a civil action in terms of Customs and Excise Act is not security for costs but the notice in terms of s 196 (1) supra.

This is apparent from s 193 (12) as read with section 193(13) which provides that goods declared to be forfeited shall only vest without compensation in the President  in which event they will be liable to be sold, destroyed or appropriated to the State if proceedings are not instituted in terms of subsection 12. What it means is that pending vesting in the President the goods declared to be forfeited remain the property of the owner (in casu the applicant) and the said goods can competently be treated as security for purposes of compliance with the point in limine in respect of security raised.

As regards the contention that applicant has acted precipitately, by bringing this application before the expiry of the notice in terms of s 196 (1), it is clear that urgent applications are not covered by the prohibition. An urgent chamber or court application is a dispensation granted by the court to an applicant on good cause shown to waive certain time limits including time frames set in the court’s own rules. In casu as the court accepted that the matter was urgent the applicant was granted waiver of the need to give notice in terms of s 196 or await expiry of the said notice period. Accordingly, applicant is entitled to approach the court for the relief it seeks as the court found the matter to be urgent.

For the foregoing reasons the points in limine cannot succeed. In the circumstances applicant is granted the provisional order in terms of the draft.

Samukange Hungwe Attorneys, applicant’s legal practitioners