ultra vires the Act in that it is not empowered to impose penalties outlined in s 174 (2a) of the Act then as these may be imposed only after a person has been convicted by a court of law. T (Pvt) Ltd asserts further that ZIMRA could also not have relied on s 200 of the Act to impose a 100 per cent penalty as there was no admission by it that it had contravened s 174 of the Act.{mprestriction ids=″1,2,3,4,5″}
The facts upon which the application is made are these. Sometime in November 2012 T (Pvt) Ltd imported refrigeration units from South Africa. The units were without condensers, compressors and evaporators as these were to be supplied separately. The goods were described by T (Pvt) Ltd's clearing agent, Key Logistics, as ″furniture meant to receive refrigeration equipment″. Duty was accordingly made under this classification as opposed to being levied under goods classified as ″refrigeration equipment″ which has a different code and tariff altogether. The tariff used attracts a duty of five per cent whilst the correct tariff attracts a duty of 60 per cent.
The wrong tariff was discovered at the physical examination stage at the container depot. ZIMRA determined then that the goods constituted refrigeration equipment and that duty had been underpaid. The cabinets had piping fitted to them which contained refrigeration gas. A fine of US$ 134 798 was imposed. A reduction was rejected on the grounds that had the omission not been picked up, the State would have suffered prejudice. T (Pvt) Ltd appealed on 15 January 2013 and ZIMRA says that the appeal was again dismissed. Having not heard any further from T (Pvt) Ltd, the deposit fine was converted to revenue.
In light of the fact that there was no deliberate attempt to evade duty, the 100 per cent fine is said to be unreasonable. ZIMRA opposes the application on several grounds. As a preliminary point it is averred by ZIMRA that T (Pvt) Ltd's application is fatally defective as it did not give the requisite 60 days' notice of its intention to institute legal proceedings against it in accordance with s 196 of the Act. ZIMRA also points out that this issue of the requisite notice requiring to be given to the Commissioner, has been dealt with vividly in a number of cases before this Court, all of which have come to the same conclusion that for ZIMRA to be sued, the relevant notice must be given in terms of s 196 of the Customs and Excise Act. They also argue that in terms of the Revenue Authority Act [Chapter 23:11], ZIMRA is clearly an agent of the State. The application is therefore said to be defective for want of compliance with mandatory provisions.
On the merits, ZIMRA's argument is that the goods had the essential character of complete goods as the pipes already contained gas. It says that T (Pvt) Ltd's clearing representative, Speedlink Cargo, conceded in a letter to it that the goods had been wrongly classified, particularly as the cabinets had refrigeration tubes. Furthermore, in another letter written by T (Pvt) Ltd's Managing Director to ZIMRA, it is said he agreed with the tariff determination and what T (Pvt) Ltd asked for was a reduction in the penalty as first offenders. However, the merits of this matter can only be delved into if the point in limine raised is disposed of in favour of T (Pvt) Ltd.
Mr Madzoka argued on behalf of the applicant, T (Pvt) Ltd. His main point in opposition to the point in limine was that, the Act does not to require any such notice to be given to ZIMRA. He said it speaks of notice to the State, the Commissioner or an officer. He further argued that the ″State″ is not defined. Drawing on the meaning of State as defined in the case of Chandler v Director of Public Prosecutions [1962] 3 All ER 142 (HL) at 156 where it is said to ″denote organs of government of a national community″, he said ZIMRA is not the ″State″ within this meaning of the word.
As regards Commissioner, whose meaning is defined, he argued that only natural persons can be commissioners and that artificial persons and juristic persons like ZIMRA are not commissioners. A similar argument was made in relation to an officer as referring to a natural person. ZIMRA was said to be a body capable of being sued in its own name and that proceedings against ZIMRA are not proceedings against the State. As such, he said that there was no need to favour ZIMRA with a notice in terms of s 196 of the Act and that if the legislature had wanted ZIMRA to be given notice, it would have said so clearly in the Act.
He further argued that the legal decisions ZIMRA relies on for its notice argument (Machacha v Zimbabwe Revenue Authority HB 186-11 (unreported) and Chiutsi v Commissioner of Police & Ors HH 65-05 (unreported)), are distinguishable from the case in point in that the issues raised herein regarding the nature of ZIMRA were not raised in those proceedings.
The relevant legal provisions
The relevant section of the Act which lays out the requirement to give notice reads as follows:
″196 Notice of action to be given to officer
(1) No civil proceedings shall be instituted against the State, the Commissioner or an officer for anything done or omitted to be done by the Commissioner or an officer under this Act or any other law relating to customs and excise until sixty days after notice has been given in terms of the State Liabilities Act [Chapter 8:14].
(2) Subject to subsection (12) of section one hundred and ninety-three, any proceedings referred to in subsection (1) shall be brought within eight months after the cause thereof arose, and if the plaintiff discontinues the action or if judgment is given against him, the defendant shall receive as costs full indemnity for all expenses incurred by him in or in respect of the action and shall have such remedy for the same as any defendant has in other cases where costs are given by law″.
Section 2 of the Act defines ″Commissioner″ and ″officer″ as follows:
″'Commissioner' means –
(a) the Commissioner in charge of the department of the Zimbabwe Revenue Authority which is declared in terms of the Revenue Authority Act [Chapter 23:11] to be responsible for assessing, collecting and enforcing the payment of duties in terms of this Act; or
(b) the Commissioner-General of the Zimbabwe Revenue Authority, in relation to any function which he has been authorised under the Revenue Authority Act [Chapter 23:11] to exercise;
'officer' –
(a) means an officer of the department of the Zimbabwe Revenue Authority which is declared in terms of the Revenue Authority Act [Chapter 23:11] to be responsible for assessing, collecting and enforcing the payment of duties in terms of this Act;″
Section 4 of the Revenue Authority Act defines the functions of ZIMRA as:
″Functions and powers of Authority
(1) The functions of the Authority shall be –
(a) to act as an agent of the State in assessing, collecting and enforcing the payment of all revenues; and ...″
As such ZIMRA is a State entity. It is in my view an organ of government through which it collects revenue.
What can be logically and legally deduced from the above provisions is that the State, ZIMRA being the State entity in this instance; the Commissioner, being the person responsible for the department within ZIMRA which collects revenue; as well as an officer of the relevant department within ZIMRA which collects revenue, can be sued in civil proceedings. Looking at the definition of an officer, it would make little, if any sense, to exclude the entity that the officer works for, from being the given the requisite notice. Furthermore, the word ″State″, all too frequently used in legislative enactments, must be read contextually, and in general refers to the relevant branches of government institutions that operate under the broad rubric of the umbrella State.
It is also clear from the above provisions that all parties involved cannot be sued without proper notice. The requirements must be followed. It is only after the time period has expired without any result that any claim or action may be brought. There is presently nothing in s 296 of the Act or in the State Liabilities Act [Chapter 8:14] that allows for condonation of failure to give the requisite notice or failure to operate within the stipulated time frame. (Whether condonation for failure to observe time frames should be permitted is another issue altogether. For a discussion of this see for instance Nyika & Anor v Minister of Home Affairs & Ors HH 181-16 (unreported)).
It follows that failure to give notice of intention to sue as laid out in the applicable Act, does have an impact on the legality of the proceedings.
In Care International Zimbabwe v Zimbabwe Revenue Authority & Anor 2015 (1) ZLR 567 (H) it was held that there can be no doubt that the Commissioner referred to in s 196 (1) of the Act is the Commissioner-General responsible for the supervision and management of ZIMRA. It was equally held that ZIMRA is an agent of the State under the supervision and management of the Commissioner-General, hence the continued protection granted under ss 196 and 6 of the Act and the State Liabilities Act respectively. The issue which the applicant seeks to raise in this case as regards it having no obligation to notify ZIMRA is the same as that which was raised in the Care International case (supra). There is no merit in the submission that the issue applicant now raises was not addressed in that case. Furthermore, MTSHIYA J considered other cases that had dealt with the issue of notice. As he put it:
″I am also unable to ignore the authorities relied on by the first respondent, namely Tasmine P/L v Zimbabwe Revenue Authority HB 115-09, Machacha v Zimbabwe Revenue Authority HB 186-11, Chiutsi v Commissioner of Police and Zimbabwe Revenue Authority & Ors, HH 65-05 and Dube v ZIMRA HB 2-14, where the need to comply with s 196 (1) of the Act was emphasized″.
For the reasons I have spelt out above, I am equally unable to agree with T (Pvt) Ltd as applicant that there is no need to give notice to ZIMRA. It is a State entity. As explained in various cases, the requirements for notice for suing State organs, not only give consistency to procedural niceties for suing the State, but also accord the State institution in question an opportunity to fully investigate the claim and to consider whether to settle. (See Stambolie v Commissioner of Police 1989 (3) ZLR 287 (S) at 298C; Minister of Safety and Security v De Witt 2009 (1) SA 457 (SCA)).
Accordingly, the point in limine regarding the legality of the application is upheld.
The application is improperly before this Court and is accordingly dismissed with costs.
Wintertons, applicant's legal practitioners
Kantor & Immerman, respondent's legal practitioners
{/mprestriction}
Search
{{/_source.image}}
{{/_source.showImage}}