Bechan and Another v SARS Customs Investigations Unit and Others

The first appellant, Mr Kapeel Bechan, was the sole director of the second appellant, Bechan Consulting (Pty) Ltd. On 28 March 2022, SARS obtained a search and seizure warrant from the Gauteng High Court in terms of sections 59 and 60 of the Tax Administration Act 28 of 2011 (TAA) to search premises at 62 Wessels Road, Rivonia, Johannesburg in relation to Bullion Star (Pty) Ltd, which was suspected of committing tax offences. On 29 March 2022, SARS officials executed the warrant. While awaiting access to the premises, they observed people removing items from the building and placing them in vehicles. Upon entering the premises, SARS officials noticed Mr Bechan's Toyota Fortuner parked on the premises with files, notebooks and electronic equipment inside. After Mr Bechan could not find the keys, a locksmith was used to unlock the vehicle. SARS officials seized items from the Fortuner including 10 laptop computers, four cellular phones and various financial documents pertaining to Bullion Star. The appellants sought return of two laptop computers and two cellular phones by way of the mandament van spolie (spoliation remedy), contending the seizure was unlawful as the warrant only applied to the taxpayer (Bullion Star) and not to third parties. The High Court dismissed the application, and the appellants appealed to the Supreme Court of Appeal.

• Whether a search and seizure warrant issued in terms of sections 59 and 60 of the Tax Administration Act 28 of 2011 is location-specific or taxpayer-specific
• Whether SARS officials were entitled to search and seize property belonging to third parties found on premises identified in a warrant
• Whether section 61(3)(a) of the TAA permits SARS officials to search vehicles parked on premises identified in a warrant if they suspect those vehicles contain material relevant to the taxpayer
• Whether SARS officials had reasonable cause to search the appellant's motor vehicle
• Whether the appellants were entitled to the spoliation remedy in circumstances where SARS had statutory authority to execute the warrant

The appeal was dismissed with costs, including costs of two counsel.

Sections 59(1) and 60(1) of the Tax Administration Act 28 of 2011 are location-specific, not taxpayer-specific. A warrant issued under section 60 authorizes SARS officials to search the premises identified in the warrant and any person present on those premises, and to seize relevant material. Section 61(3)(a) of the TAA permits SARS officials executing a warrant to open or search anything on the premises which they suspect contains relevant material. The word "anything" in section 61(3)(a) is broad enough to include motor vehicles parked on the premises identified in the warrant. However, SARS officials may only search property of third parties on the premises if they suspect it contains material relevant to the taxpayer. The threshold for exercising search powers under section 61(3)(a) is reasonable suspicion, not certainty, that the property contains relevant material. Where SARS exercises statutory powers under a validly issued warrant to seize property, the dispossession is lawful and the spoliation remedy is not available.

The Court noted that raising the threshold for execution of search and seizure warrants beyond reasonable suspicion would impact negatively on their efficacy in bringing tax offenders to book, as such warrants play a vital role in achieving the core objective of the TAA, which is to ensure effective and efficient collection of tax. The Court observed that search and seizure operations would be rendered ineffectual if SARS officials were powerless to search third parties for relevant material, especially in cases where material relevant to the taxpayer is spirited away and placed in a vehicle belonging to a third party. The Court noted that the subsequent setting aside of the warrant by the High Court in separate proceedings instituted by Bullion Star was irrelevant to the appeal, as appellate courts decide whether the judgment appealed from is right or wrong according to facts existing at the time it was given, not new circumstances arising afterwards.

This case is significant as it authoritatively interprets the search and seizure provisions in Part D of the Tax Administration Act 28 of 2011, clarifying that warrants issued under sections 59 and 60 are location-specific rather than taxpayer-specific. It establishes that SARS officials may lawfully search and seize property belonging to third parties on premises identified in a warrant, provided they suspect such property contains material relevant to the taxpayer. The judgment affirms the broad investigative powers granted to SARS under the TAA to combat tax offences, while setting the threshold requirement at reasonable suspicion rather than certainty. It reinforces that search and seizure warrants are vital investigation tools to achieve the core objective of the TAA - effective and efficient tax collection. The case also demonstrates the application of the Plascon-Evans rule to factual disputes concerning the execution of search and seizure warrants in motion proceedings, following the approach adopted in Thint. It clarifies that the spoliation remedy is not available where the dispossession is authorized by statute.