SARS Must Give Reasons:
A New Weapon for Taxpayers

A recent SCA ruling reinforces the right for
proper reasons in SARS customs disputes.

The Judgment
In QI Logistics v Commissioner for SARS, SARS held a licensed clearing agent liable for approximately R35 million in customs duties and penalties. This followed SARS’ view that certain fuel consignments had not been properly acquitted for export.

QI Logistics responded with detailed written submissions and four lever arch files of supporting documents. Despite this, SARS failed to properly explain why that evidence was rejected, and its explanations remained sparse even after repeated requests.

What the Court Decided
  • SARS must show a rational link between the evidence placed before it and the decision it ultimately reaches.
  • SARS cannot simply reject evidence without explaining whether it considered the information incomplete, unreliable, inconsistent, or legally insufficient.
  • An administrative decision generally stands or falls on the reasons that existed when it was made – SARS cannot bolster its reasoning only once litigation has begun.
Why It Matters

For importers, exporters, clearing agents and other participants in the customs and excise environment, this judgment is a timely reminder that SARS’ decisions are not beyond scrutiny. Where customs assessments, penalties, tariff determinations are inadequately explained, affected parties may be entitled to challenge not only the outcome, but also the decision-making process itself.

Facing a similar customs audit, assessment, or penalty dispute with SARS or unsure whether the reasons you’ve been given by SARS are adequate?
Our customs advisory team can help evaluate your position, assess whether SARS has followed the correct legal and procedural requirements and advise on the best approach moving forward.  

 

Contact us today:
Tel : +27 (0)11 884-0792
E-Mail : mail@harty.law    
Block A, Ground Floor, West Wing, Morningside Close Office Park
222 Rivonia Road, Morningside (entrance via Michelle Street)
www.harty.law
Follow us on LinkedIn: https://za.linkedin.com/company/harty-rushmere