Big blow for SARS

Big blow for SARS

….Authority ordered not to seize foreign-registered cars….

MASERU-THE days of the South African Revenue Services (SARS) wantonly impounding and holding on to Lesotho registered cars for years might be over.
A South African court has ruled that SARS should not arbitrarily seize vehicles and keep them for inordinate time without finalising its investigations on whether duty is owed.

SARS has for years impounded Lesotho registered cars in South Africa on charges that they violate customs regulations.
The revenue authority has mostly targeted Lesotho cars driven by South Africans.

SARS would hold on to the cars for months and even years while insisting that they are still investigating the matter.
Their justification has been that duties have not been paid on those vehicles and South Africans are not allowed to drive foreign registered cars.
Even Basotho driving Lesotho registered vehicles have been caught up in the SARS dragnet.

Cars registered in Namibia, Swaziland and Botswana have also been impounded. In some cases South African cars have not been spared.
The authority would only release the vehicles when the owners pay penalties that ranged from M2 500 to as much as M40 000. Those who refused to pay would watch as their cars rot at police stations. Some of the vehicles have been stripped of parts.

By some estimate SARS is holding on to nearly 5 000 such vehicles.
But that might soon change. And it’s all thanks to persistence of Joaquim Alves a South African businessman whose Lesotho registered vehicle SARS impounded in May last year.
Alves’s Lesotho registered car was being driven by a friend when SARS officials pounced on it. The revenue authority argued that the car did not have an import permit and they suspected that duties had not been paid.
However, Alves vehemently protested and retrieved his car from the municipality’s yard.

The police then charged him with theft.
SARS then confiscated the car and kept it for months until Alves sued for its release. In the meantime the police withdrew the theft charge against him.
On his lawsuit the court ruled that SARS should return his car within two days because it had failed to investigate the case within a reasonable time.
The court described the seizure as “unreasonable, arbitrary and therefore unlawful”.

Instead of complying with the order SARS held on to the car and appealed against the judgement, insisting that the seizure was unlawful.
On July 27 the Free Sate’s Appeals Court dismissed the case, ruling that the initial judgement was correct.

That means SARS has to release the vehicle.
This week Alves told thepost that SARS is yet to release the vehicle despite emails from his lawyer.
He described the ruling as a “victory for thousands of other people who have been harassed by the SARS”.

“There is no law that says a South African cannot drive a vehicle registered in another country. SARS has been illegally impounding the vehicles to make money,” Alves said.
“This is one case that I will take all the way to the highest court because I believe SARS is violating people’s rights. They have no business taking those vehicles.”

Advocate Mkhosi Radebe, Alves’s lawyer, said the ruling has serious implications for SARS.
“It’s clear that Section 88 of the Customs and Excise Act that SARS has been relying on to impound and detain those vehicles has become untenable,” Advocate Radebe said.

The clause says a revenue officer, magistrate or police officer is allowed to “detain any ship, vehicle, plant, material or goods at any place for the purpose of establishing whether” they are liable to forfeiture”.
“The judgement means SARS is compelled investigate a case and release a vehicle within a reasonable time. What has been happening is that SARS would hold a vehicle for years unless you pay a punitive penalty,” Advocate Radebe said.

The clause, he said, gives SARS unfettered powers to impound vehicles without probable cause and charge hefty penalties to release them.
“So punitive were the penalties that most people just gave up on their vehicles.”

He explained that the vim with which SARS is pursuing the vehicles is based on the fact that the Customs and Excise Act allows an officer who impounds a car to get a 30 percent commission from the penalties.
“So pernicious is that law that they can impound your vehicle in Ficksburg, make you pay penalties, then impound it again in Ladybrand and still charge penalties.”

“I am now inviting anyone whose vehicle has been unjustifiably impounded by SARS to be part of the lawsuit that will go all the way to the highest court. Such a class action is urgent. Ideally, SARS should be releasing all the cars it impounded.”

Advocate Radebe said SARS has been deliberately misinterpreting the law by insisting that South Africans driving vehicles registered in SACU countries should have import permits.
“That is totally wrong because an import is a good on which customs duty is supposed to be paid. We all know that duties on those cars have been paid in their countries of registration within SACU. They cannot be liable for duty simply because South Africans have bought or are driving them.”

“What is at stake here is that banks and automobile companies feel threatened by the vehicles from other SACU countries. Their market share and profit is under pressure so they are fighting back.”
South Africa has some of the most expensive cars in southern Africa. Many South Africans have resorted to buying cars from SACU countries which they register through third parties.
Some have registered the vehicles through their companies.

Staff Reporter

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