Shanka Investements (Pty) Ltd v The South African Revenue Services

• Jurisdiction: South Africa
• Judge: Mavundla J
• Judgment Date: 07 May 2020
• Docket Number: 30966/2018
• Court: North Gauteng High Court, Pretoria
• Hearing Date: 28 January 2020
• Citation: 2020 JDR 1092 (GP)

Mavundla J:

[1]

This matter revolves around the undisputed following facts:

1.1

the purchase by the applicant of LOT 9 in an auction sale held by the respondent on 26 March 2018 and which Lot is more fully described as: "UG22/17 Grindrod N/P 1 20ft Intermedial Liquid Dielectric Transformer XASP3180020 LOCAL";

1.2

present at the auction, were representatives of SARS, and they authorised and confirmed the sale of Lot 9 to the applicant, as the bid of R95 000.00;

1.3

which sale the first respondent (hereinafter referred to interchangeably as SARS / Commissioner) contends that it was erroneously made and accordingly contrary to the provisions of section 43(3) of the Customs and Excise Act 91 of 1964; and

1.4

in respect of which SARS still retained the purchase amount.

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Mavundla J

[2]

The crisp issue to be decided herein is whether:

2.1

the applicant is entitled to ownership of the Transformer arising from the sale and therefore entitled to delivery thereof;

2.2

alternatively whether the applicant is entitled to an alternative relief, namely refund of the purchase price together with interest, based on the defence raised by the first respondent that the decision to sell was erroneously taken and therefore in conflict with the provisions of section 43(3) of Customs and Exercise Act.

COMMON CAUSE / UNDISPUTED FACTS.

[3]

The following are common cause facts:

3.1

Aggreko Energy Rental South Africa (Pty) Ltd ("Aggreko SA") imported the subject matter, "the transformer" from Aggreko Argentina SRL ("Aggreko Argentina");

3.2

based on the Customs documents presented, the transformer was supposed to land in South Africa on 11 October 2017. This was viewed as an estimated time of arrival;

3.3

the transformer landed on 16 October 2017, after the estimated time of arrival;

3.4

the goods were supposed to be cleared within 28 days from the date of arrival;

2020 JDR 1092 p4

Mavundla J

3.5

the transformer was then due for clearance within 28 days from the date of landing;

3.6

the transformer was not cleared within the 28 days as prescribed by the Act.;

3.7

As the goods remained un-cleared, they are therefore subject to the provisions of section 43(3) of the Act which requires that after expiry of 28 days, they are then subject for as removal to the state warehouse and sale after 60 days have expired from the date of entry at the state warehouse;

3.8

the key principle for sale in terms of section 43(3) of the Act is that the goods must "remain un-cleared";

3.9

it should be noted that the transformer is a containerized cargo imported and having landed at Grindrod lntermodal cargo imported and having landed at Grindrod Inter intermodal, a container depot;

3.10

After expiry of 28 days required for clearance, the transformer was entered in the state warehouse form SC 37 as un-cleared goods;

3.11

On 5 December 2017, the commissioner appointed Grindrod lntermodal as virtual state warehouse in terms of section 43(2)

2020 JDR 1092 p5

Mavundla J

of the Act deeming Grindrod as a state warehouse for purposes of the un-entered / un-cleared transformer.

3.12

The same notice appointed and notified Grindrod lntermodal as importer's representative of the goods;

3.13

The expiry of sixty days as prescribed by section 43(3) expired on 4 February 2018;

3.14.

On 22 February 2018, the importer, Aggreko South Africa through a clearing agent Pro Africa cleared the goods in terms of SAD500 and paid duties and VAT for the transformer in an amount of R192 133. 70.

3.15

On 16 March 2018, the transformer was advertised by the first respondent, state warehouse division for sale to be concluded on 26 March 2018;

3.16

On 26 March 2018 the transformer was auctioned and sold to the applicant as the highest bidder;

3.17

Despite the release notice to the imported and Grindrod lntermodal through an EDI system, the state warehouse was not informed of the cleared / entered goods and release notice thereof;

2020 JDR 1092 p6

Mavundla J

3.18

The state warehouse became aware of the clearance / entry after the auction, when the importer approached the state warehouse with a request for a DA68 to clear the transformer from Grindrod lntermodal Virtual Warehouse.

[4]

The tabulation of the chronology extrapolated from the opposing affidavit is for easy reference and ex abudande cautela chronicled herein below:

DATE	DESCRIPTION	REFERENCE
14/9/17	Bill of Lading for the import of the generator	AA, p36, para13
	Arrival Notice estimated arrival on 11 October 2017	AA, p36, para14
16/10/17	Transformer lands in the Country RSA	AA, p37, para16
	s43(1)(a) requires entry within 28 days from date of landing of the goods	AA, p37. para16
	Entry was required by 12 November 2017	AA, p37, para17
	843(3) provides for goods to be removed to state warehouse if they do not make entry within 28 days of landing	AA, p38 para18
	...