The Commissioner for the South African Revenue Service and Others v Dragon Freight (Pty) Ltd and Others

SARS seized 19 containers of clothing imported from China under s 88(1)(c) of the Customs and Excise Act 91 of 1964 on the basis that the respondents had under-declared the transaction value of the goods to evade customs duties. The seizure followed an investigation triggered by SARS’ electronic risk system, discrepancies between declared values and Chinese export declarations (showing values approximately 1000% higher), expert textile valuation evidence, and forensic document analysis casting doubt on the authenticity of the respondents’ agreements and invoices. The respondents launched review proceedings in the High Court to set aside the seizure and compel release of the goods, relying on a prior notice of intended legal proceedings delivered before the seizure decision was taken. The High Court upheld the review and ordered release of the goods. SARS and other appellants appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order dismissing the review application with costs. The application for intervention by the Southern African Clothing and Textile Workers’ Union was struck from the roll with costs.

The case confirms the strict and peremptory nature of the notice requirements in s 96(1) of the Customs and Excise Act and clarifies that anticipatory notices of intended legal proceedings are invalid. It reinforces SARS’ powers to combat customs fraud and under-declaration and underscores the importance of compliance with statutory preconditions before instituting review proceedings against revenue authorities.