TM Supermarkets (Private) Limited v Zimbabwe Revenue Authority

In November 2012, TM Supermarkets imported refrigeration units from South Africa without condensers, compressors and evaporators. TM's clearing agent classified the goods as 'furniture meant to receive refrigeration equipment' attracting 5% duty instead of 'refrigeration equipment' which attracts 60% duty. During physical examination at the container depot, ZIMRA discovered the wrong tariff classification, noting that the cabinets had piping fitted with refrigeration gas. ZIMRA determined the goods constituted refrigeration equipment and that duty had been underpaid. A penalty of US$134,789.00 (100% of the underpaid duty) was imposed. TM's appeal was dismissed and the deposit fine was converted to revenue. TM then brought an application under the Administrative Justice Act seeking to set aside the penalty, arguing ZIMRA acted ultra vires and that there was no deliberate attempt to evade duty. TM did not give the requisite 60 days' notice to ZIMRA as required by s196 of the Customs and Excise Act.

• Whether the applicant was required to give 60 days' notice to ZIMRA before instituting civil proceedings in terms of s196 of the Customs and Excise Act
• Whether ZIMRA qualifies as 'the State', 'the Commissioner' or 'an officer' for purposes of the notice requirement in s196
• Whether ZIMRA is a state entity entitled to protection under the notice requirements
• Whether failure to comply with the mandatory notice requirement renders the application fatally defective

The point in limine was upheld. The application was dismissed with costs.

Section 196 of the Customs and Excise Act requires 60 days' notice before instituting civil proceedings against the State, the Commissioner or an officer. ZIMRA is a state entity and agent of the State as defined in s4 of the Revenue Authority Act, and therefore falls within the meaning of 'State' in s196. The notice requirement is mandatory and failure to comply renders proceedings improperly before the court. There is no provision for condonation of failure to give the requisite notice under s196 or the State Liabilities Act. The definitions of 'Commissioner' and 'officer' must be read contextually with the entity they work for, and it would be illogical to exclude the state entity from notice requirements while including its officers.

The court noted that the merits of TM's challenge to the penalty could only be considered if the point in limine was disposed of in its favor. The court also observed that the notice requirements serve important purposes: they give consistency to procedural requirements for suing the State and accord state institutions an opportunity to fully investigate claims and consider settlement. The court made reference to the question of whether condonation for failure to observe time frames should be permitted, noting this as a separate issue that has been discussed in other cases such as Michael Nyika & Anor v Minister of Home Affairs & others HH 181/16.

This case reinforces the consistent line of Zimbabwean jurisprudence requiring strict compliance with s196 of the Customs and Excise Act before instituting civil proceedings against ZIMRA. It clarifies that ZIMRA, as a state entity and agent of the State, is entitled to the protections afforded by the notice requirements. The judgment emphasizes that these procedural requirements are mandatory and cannot be bypassed by arguing that ZIMRA is not literally 'the State'. The case contributes to administrative law by underscoring the importance of following statutory procedural prerequisites when challenging decisions of revenue authorities, and confirms that failure to comply with such mandatory provisions is fatal to proceedings regardless of the merits of the underlying dispute.