BP Southern Africa (Pty) Ltd v Commissioner for the South African Revenue Service

BP Southern Africa (BP), a licensee of a fuel warehouse and exporter of fuel, claimed refunds of duty at source (DAS) for diesel it represented as having been exported to Zimbabwe. SARS investigated various consignments and concluded the fuel was never exported but consumed locally, based on: goods not exported from licensed warehouses; Zimbabwean consignees not existing or not being fuel importers; vehicles not crossing the border according to electronic records; BP's inability to provide necessary export documentation; falsified documents; and transporters not being licensed removers of goods in bond. BP's version was that it sold diesel to intermediaries who sold to Zimbabwean importers, and BP acted as "exporter of record" to claim DAS refunds since intermediaries were not licensed. On 13 February 2020, SARS issued four letters of demand. BP did not pay. On 24 February 2020, SARS issued final demand and notice of legal proceedings. On 16 March 2020, SARS filed a certified statement with the High Court for R49,978,544.06 under s 114(1)(a)(ii) of the Customs and Excise Act and attempted execution. BP requested reasons on 26 March 2020 (styled as "request for information") and applied for suspension of payment, which was rejected on 19 May 2020. BP launched two urgent applications for interim interdicts pending review applications. Mothle J dismissed both applications. BP also applied to file a supplementary founding affidavit before the record was filed in rule 53 proceedings, which Munzhelele AJ refused. The full court dismissed all three appeals.

• Whether the high court properly exercised its discretion under s 96 of the Customs and Excise Act to truncate time periods
• Whether BP established the requirements for an interim interdict: prima facie right, irreparable harm, balance of convenience, and absence of alternative remedy
• Whether SARS acted lawfully in filing a certified statement under s 114(1)(a)(ii) before the lapsing of 30 days for requesting reasons
• Whether SARS' rejection of BP's suspension application was influenced by errors of law or failure to consider relevant factors
• Whether an interlocutory ruling refusing admission of a supplementary founding affidavit before filing of a record in rule 53 proceedings is appealable
• Whether the appeal was moot given that the debt had been collected under s 114AA

The application for special leave to appeal was dismissed with costs.

The binding legal principles established are: (1) Under s 77G of the Customs and Excise Act, amounts demanded by the Commissioner remain due and payable despite Chapter XA procedures (internal appeals, alternative dispute resolution) or court proceedings, unless the Commissioner exercises discretion to suspend payment. A request for reasons under rule 77H or the filing of an appeal does not automatically suspend the payment obligation. (2) SARS may lawfully file a certified statement under s 114(1)(a)(ii) and proceed with execution before the expiry of time periods for requesting reasons or lodging internal appeals, provided the amount is due and payable and has not been suspended by the Commissioner. (3) Under s 114(1)(a)(iii)(cc), a certified statement filed by SARS is deemed correct for purposes of recovery proceedings pending conclusion of dispute resolution procedures. (4) In disputes where SARS alleges goods were not exported, s 102(5) creates a presumption of non-exportation that the taxpayer must rebut. (5) For an interim interdict pending review of SARS decisions, the applicant must establish: a prima facie right likely to lead to success in the review; irreparable and imminent harm; balance of convenience favouring the interdict; and absence of other effective remedy. The balance of convenience in fiscal matters generally favours SARS given the State's constitutional obligations. (6) An interlocutory ruling refusing to admit a supplementary founding affidavit before filing of the record in rule 53 proceedings is not appealable because it has no final effect, is not definitive of the parties' rights, and does not dispose of any substantial portion of the main proceedings.

The Court made several obiter observations: (1) Acts performed subsequent to an administrative decision that is set aside are invalid once the decision is set aside, regardless of whether performed before or after the court order (citing Seale v Van Rooyen), which would affect recoveries under s 114AA if the review succeeded. (2) An appeal may be entertained even when there are no live issues if it is in the interests of justice to do so (citing Normandien Farms). (3) The constitutionality of SARS' wide powers under the Customs and Excise Act was not challenged and therefore not considered. (4) BP's assertion that SARS "misused" its wide powers was not developed into a constitutional challenge. (5) The Court noted BP's unfortunate position regarding pre-judgment interest, acknowledging this was "unfortunately part of the unchallenged legislative scheme." (6) Further evidence on appeal should only be admitted in exceptional circumstances: it must be weighty material, there must be reasonable explanation for lateness, and there should not be substantial disputes of fact militating against admission (citing P A F v S C F). (7) The Court may take judicial notice of historical material that is readily available and reliable (citing Community of Grootkraal), but disputed factual affidavits do not qualify. (8) Where SARS is dilatory in filing the record in rule 53 proceedings, the proper remedy is an application to compel filing, not irregular filing of a supplementary founding affidavit out of sequence.

This case clarifies important principles in South African tax and administrative law: (1) amounts demanded by SARS under the Customs and Excise Act remain due and payable unless the Commissioner exercises discretion to suspend payment - neither a request for reasons under rule 77H nor an internal appeal nor court proceedings automatically suspend the obligation to pay; (2) SARS may file a certified statement under s 114(1)(a)(ii) and proceed with execution even before the expiry of time periods for requesting reasons or lodging appeals, absent a decision by the Commissioner to suspend payment; (3) the certified statement is presumed correct for recovery purposes pending dispute resolution under s 114(1)(a)(iii)(cc); (4) the presumptions under ss 102(4) and 102(5) regarding non-existence of required documents and non-exportation place significant evidentiary burdens on taxpayers in customs disputes; (5) interim interdicts against exercise of SARS' statutory powers are granted only in the clearest of cases, and the balance of convenience generally favours SARS given the fiscal imperatives of the State; (6) interlocutory rulings on procedural matters in rule 53 review proceedings (such as refusal to admit supplementary founding affidavits before the record is filed) are not appealable as they have no final effect and do not definitively determine rights. The case reinforces the strong collection powers granted to SARS under customs legislation and the limited scope for interim relief pending resolution of disputes.