Watson v Commissioner of Customs and Excise

• Jurisdiction: South Africa
• Judge: Milne J and Henochsberg J
• Judgment Date: 05 May 1960
• Citation: 1960 (3) SA 212 (N)
• Hearing Date: 09 February 1960
• Court: Natal Provincial Division

Milne, J.:

The plaintiff who is the proprietor of an hotel in Pietermaritzburg, sued the defendant for the delivery to him of a certain quantity of liquor, manufactured in the Union or, alternatively, its value, £563 4s. 5d. It was alleged in the declaration that the Collector for Customs and Excise in Pietermaritzburg, acting as the A servant of the defendant within the scope of his employment on or about 1st August, 1959. The defendant, in his plea, admits these averments save that he says that the seizure was made on or about 31st July, 1959. Paras. 8 to 12 of the plea are as follows:

B 'The said Collector seized the said liquor pursuant to sec. 27 of Act 62 of 1956 in that he had reasonable cause to believe and did so believe that such liquor was forfeited under sec. 85 of the said Act.

9. The said Collector is and was at all material times an officer as defined in sec. 1 of the said Act.

10. The said Collector's belief arose out of the following facts, which at the time of the seizure were known to him:

(a)

the said liquor consisted of excisable goods within the meaning C of those words as used in sec. 85 (a) (ii) of the said Act.

(b)

Duty had become payable on the said liquor in terms of sec. 9 of the said Act in that at 3.10 p.m. on 16th July, 1959, the Minister of Finance gave notice of motion in the House of Assembly of a resolution affirming the expediency of increasing the rate of duty already payable upon the said liquor and the plaintiff was one of a class of dealer specified in the said notice.

(c)

D The said liquor had not at the said time been delivered from the stocks of the plaintiff, who was a dealer as defined in the said Act.

(d)

The said liquor, at the said time was in the possession of the plaintiff and it was incumbent on the plaintiff to perform the duties set out in sec. 12 of the said Act.

(e)

The plaintiff had failed to comply with the provisions of sec. 12 (b) of the said Act in that he had failed within 7 days or at all to deliver to the proper officer a statement as required by E the said section in respect of the said liquor.

(f)

The plaintiff had failed to comply with sec. 12 (c), of the said Act in that he had failed within 14 days of the said date (namely 16th July, 1958) or at all, to transmit to the proper officer the amount of duty payable by him in respect of the said liquor.

11. In the premises, the said liquor, at the time it was seized, was unlawfully possessed by the plaintiff within the meaning of sec. 85 of the said Act, and the said liquor was accordingly forfeited.

F 12. The said Collector holding the belief aforesaid was accordingly entitled to seize the said liquor and the defendant is entitled to retain possession thereof.'

The plaintiff excepts to the plea on the ground that it discloses no defence and is bad in law or is not sufficient in law to sustain the defence in whole or in part in that -

'The facts set out in para. 10 G of the plea are not capable of providing the alleged reasonable cause for the belief that the said liquor was forfeited under sec. 85 of Act 62 of 1956 on the grounds that it was unlawfully possessed within the meaning of the said section, and the plea therefore fails to show that the Collector had the right to seize the said liquor.'

Sec. 12 of the Act is as follows:

'Whenever the Minister has given the notice of motion referred to in sec. 9 every manufacturer or dealer shall -

(a)

H forthwith take stock of all articles specified in the resolution, which were in his possession or under his control at the time when the notice was given, and make a clear and accurate record thereof; and

(b)

within seven days of the date on which the notice was given, deliver to the proper officer a statement verified by affidavit, giving the number, weight or quantity of articles specified in the resolution, which were in his possession or under his control or in transit to him at the said time, the quality and condition of those articles, and any other information which the Commissioner may require of him; and

(c)

within fourteen days of the said date, transmit to the proper officer the

Milne J

amount of duty payable by him in respect of the articles in question, unless he has been granted an extension of time in terms of sec. 10.'

Sub-secs. (1) and (4) of sec. 27 are as follows:

'(1) An officer shall forthwith seize any thing or goods which he has reasonable cause to believe are forfeited under sec. 85 and may convey A them to a police station or custom house or other place of security or mark and impound them on the premises where they are found.

(4) Unless the owner or the person from whom a thing or goods have under sub-sec. (1) been taken, takes steps within thirty days of the seizure and without delay proceeds to prove to the satisfaction of the Commissioner that the use or possession of the thing or goods was not unlawful, such use or possession shall be deemed to have been unlawful.'

B Sec. 85 (a) (ii) of the Act (referred to in para. 10 (a) of the plea) provides that 'exciseable goods which are unlawfully used, manufactured, possessed, stored, removed or otherwise dealt with' shall be 'forfeited and shall be dealt with as provided in sec. 27'.

The contention of the Commissioner is that the plaintiff's failure to C comply with the provisions of sec. 12 (b) and (c) made his possession of the liquor unlawful; alternatively, that such non-compliance provided the Collector with reasonable cause to believe that it was unlawfully possessed within the meaning of sec. 85; and, thus, that it was forfeited in terms of that section.

It will be convenient to deal first with a submission made on behalf of D the Commissioner that the provisions of sec. 27 (4) are of operation even in a case where an officer, purporting to act in terms of sec. 27 (1), has seized goods which he has no reasonable cause to believe are forfeited under sec. 85. If that submission is sound, there is an end to the plaintiff's case as it is common cause that no steps were taken within 30 days of the seizure to prove to the Commissioner that the E possession of the goods was not unlawful. By virtue of sec. 27 (4), failure to take such steps results in deeming that the owner's possession of the goods was unlawful and I am fully persuaded that the contention advanced on behalf of the Commissioner is unsound. The provisions of sec. 27 (4) are very drastic indeed. Failure 'to prove to the satisfaction of the Commissioner' that the possession of the goods F was not unlawful, results in the goods being forfeited and it would appear that the Commissioner's decision would not be subject to appeal or review, however wrong it was, if it was properly arrived at, as he is made the sole arbiter of the matter (cf. Crown Mines Ltd v Commissioner for Inland Revenue, 1922 AD 91; Commissioner for Inland G Revenue v City Deep Ltd., 1924 AD 298). These cases dealt with similarly worded provisions in the Income Tax Act, 41 of 1917, and show, further, when read with Union Government v Union Steel Corporation (S.A.) Ltd., 1928 AD 220, that the Courts would not interfere with a decision of the Commissioner under sec. 27 (4) even if he has misinterpreted the statute (save in certain excepted cases which need H not here be restated). I do not...