Commissioner for the South African Revenue Service v Bullion Star (Pty) Ltd

Bullion Star (Pty) Ltd is a licensed gold refinery. SARS investigated whether it was trading in Krugerrand gold coins (zero-rated for VAT) rather than second-hand gold (taxable), focusing on the VAT period November 2020 to February 2022. On 28 March 2022, SARS obtained an ex parte search and seizure warrant under s 60 of the Tax Administration Act 28 of 2011 from the Gauteng High Court, Pretoria (Maumela J). The warrant was executed at Bullion Star’s premises and at the homes of its director and an employee. On 4 April 2022, Bullion Star launched an urgent application to seal the seized material, which resulted in a consent order on 7 April 2022. The consent order required Bullion Star to institute a reconsideration application within 10 days and, pending finalisation, authorised SARS to use the seized documents solely for the VAT audit for periods 11/2020 to 02/2022. In the reconsideration application before Janse van Niewenhuizen J, Bullion Star sought to set aside the warrant, arguing it was overbroad and that SARS had failed to disclose material facts. SARS conceded the warrant was overbroad but sought a limited severance. The high court set aside the warrant in its entirety on 2 February 2024 and interdicted SARS from using the seized information. SARS appealed to the Supreme Court of Appeal with leave.

• Whether an overbroad search and seizure warrant issued ex parte under s 60 of the Tax Administration Act is unlawful and liable to be set aside on reconsideration under rule 6(12)(c) of the Uniform Rules of Court.
• Whether the high court on reconsideration was empowered to sever or amend the overbroad warrant instead of setting it aside in its entirety.
• Whether the high court failed to exercise its discretion at all when it set aside the warrant without considering severance.
• The proper interpretation and effect of the parties' consent order pending the reconsideration, particularly whether the authorisation in paragraph 7 permitting SARS to use seized documents for a VAT audit was interim or a final, self-standing agreement.
• Whether the Supreme Court of Appeal should interfere with the high court's exercise of discretion on reconsideration.

The appeal is dismissed with costs, including the costs of two counsel where so employed.

An ex parte search warrant under the Tax Administration Act must not be overbroad; if its terms authorise acts beyond those permitted by the statute or fail to particularise the scope of the search adequately, it is unlawful. On reconsideration under rule 6(12)(c), the court has a broad discretion to uphold, amend, or set aside the warrant, and an appellate court will interfere only if the lower court materially misdirected itself. Where the overbroad warrant has already been executed and the party that obtained it belatedly seeks severance without a proper basis, formal amendment, or notice, the court is entitled to refuse severance and set the warrant aside. A consent order regulating the use of material seized under an ex parte warrant, pending reconsideration, is interim and contingent on the outcome of the reconsideration; clauses permitting the use of documents do not operate as standalone final authorisations if the overall order is framed as interim.

The dissent's view that the high court inverted the parties in the reconsideration application and that paragraph 7 of the consent order was a permanent, self-standing agreement authorising SARS to use seized documents for the VAT audit (not followed by the majority). The majority's observation that there was no purpose in examining the discretion exercised by Maumela J when he initially granted the warrant because the warrant had already been executed (para 22). The majority's remark that if SARS requires a search and seizure, it may properly apply for a lawful warrant (para 40). The majority's observation that an overbroad warrant cannot be remedied simply by asserting that the subject of the search knew or ought to have known what was being looked for (para 25).

The case reinforces that overbroad search and seizure warrants issued under the Tax Administration Act are unlawful and will not be tolerated by courts. It affirms the high court's broad discretion on reconsideration under rule 6(12)(c) of the Uniform Rules of Court and limits an appellate court's power to interfere with that discretion. The judgment also provides important guidance on the interim nature of consent orders concluded pending reconsideration of ex parte warrants, and confirms that parties cannot rely on belated applications for severance to cure fundamental overbreadth. It further underscores the constitutional protection of privacy (s 14 of the Constitution) in the context of invasive search and seizure powers exercised by SARS.