Commissioner, South African Revenue Service v Van der Merwe NO and Others

Pela Plant (Pty) Ltd, which later went into liquidation, had imported heavy earth‑moving equipment that had been used in the Democratic Republic of the Congo and returned to South Africa. The equipment was stored in a customs and excise warehouse under deferment of customs duty and VAT. After the company was wound up, its liquidators sought to take possession of the equipment in order to realise it for the benefit of creditors. SARS refused to release the equipment, contending that under the Customs and Excise Act 91 of 1964 and the VAT Act 89 of 1991, duty and VAT had to be paid before the goods could be released. The liquidators applied to the High Court for an order compelling release without prior payment, arguing that insolvency law obliged them to take possession of all assets of the insolvent company. The High Court granted the order, and SARS appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel, and the order of the High Court directing the release of the equipment to the liquidators was upheld.

This case clarifies the interaction between customs and tax legislation and insolvency law in South Africa. It confirms that SARS does not enjoy an implied super‑preference or embargo over goods in insolvency merely because customs duty or VAT is unpaid, and that such goods fall into the insolvent estate to be dealt with under the Insolvency Act. The decision reinforces the centrality of the concursus creditorum and limits the extent to which fiscal statutes can disrupt established insolvency principles.