Court strikes down sections of Customs, Excise Act

The Zimbabwe Revenue Authority (Zimra) must now allow any buyer of improperly cleared goods to make representations before it is allowed to enforce payment of customs duty by that buyer, after the High Court struck down a section of the Customs and Excise Act as unconstitutional, although the Constitutional Court still has to confirm this judgment.

The ruling comes after Grain Millers Association of Zimbabwe president Mr Tafadzwa Musarara took Finance and Economic Development Minister Mthuli Ncube and Zimra to the High Court challenging the validity of section 192 of the Customs and Excise Act.

This was after Mr Musarara had his Mercedes Benz G63 Wagon bought in December 2019 from a car dealer identified as Clemio Kahuni confiscated by Zimra because Kahuni allegedly had not paid the duty despite his assurances to Mr Musarara.

Mr Musarara bought the unregistered vehicle from Kahuni on the assurance that all duties and taxes required by the law had been paid. But Zimra advised Musarara that Kahuni had not paid anything and seized the vehicle from Mr Musarara who was merely a third party.

In response to Zimra demands, Mr Musarara paid the taxes claimed by the tax collector subject to his right to claim a refund from Kahuni, but still Zimra insisted that the payment he made did not discharge the obligation involved.

This sparked the dispute which subsequently spilled into the High Court with Mr Musara seeking the intervention of the court by striking down the sections of the Act, which he deemed ultra vires of the Constitution.

Mr Musara through his lawyer, Mr Admire Rubaya, told the court that he was an innocent purchaser who had no cause to suspect that duty had not been paid.

It was argued that the seizure of his vehicle contravened the section of the Constitution that guarantees that "every person has a right to administrative conduct that is lawful, prompt, efficient, reasonable, proportionate, impartial and both substantively and procedurally fair".

Since he was not given an opportunity to make representations before the seizure he argued that Zimra's action allowed in the Act was a breach of the constitutional section.

Mr Rubaya argued that the actions of the Minister of Finance and Zimra denied his client the benefit and protection of the law, as the person from whom the vehicle was seized after buying it for US$160 000, Musarara had been harmed by the actions of Zimra.

The vehicle still remains in the custody of Zimra under seizure.

Neither the Minister nor Zimra disputed that they did not give notice of the intended seizure to Mr Musara before the seizure was effected, neither did they deny that Mr Musara was not given the opportunity to make representations prior to the seizure.

The court was, therefore, being asked to decide whether or not an administrative body was not violating the Constitution by taking action against someone's rights without giving him or her notice of the action sought to be taken and affording them the opportunity to make adequate representations before the offending action is taken.

In his ruling, Justice Webster Chinamora granted the application by Mr Musarara agreeing with his lawyer's submissions that for the actions of an administrative functionary to be lawful, it must adhere to the time-tested maxim of "audi alteram partem", a Latin maxim that requires that a person who is at the receiving end of an administrative action that affects his rights and interests should be given an opportunity to explain himself.

"It is beyond question that the duties placed on public officials by section 68 (1) of the Constitution are strengthened by section 56 (1) of the Constitution which gives every person the right to be protected by a fair legal system," said Justice Chinamora.

"Seizing someone's property first and then requiring that person to make representations ex post facto (after the event) can hardly be what section 68 (1) of the Constitution contemplated."

Justice Chinamora in his judgment criticised the argument of the Minister and Zimra that the Customs and Excise Act affords aggrieved persons the right to be heard after the event.

To this end, Justice Chinamora ruled that the part of the section that allowed the seizure without offering a prior representation violated section 68 (1) of the Constitution.

"There is no second guessing that proportionality entails that the desired goal of an administrative decision is achieved by the use of a method which is least drastic or oppressive to achieve it," said the judge.

"In other words, an administrative body must not deploy more heavy-handed means than are necessary to achieve its objective, by idiomatically using a sledge hammer to kill a fly."

The objective of the enforcement regime under section 192 (1) of the Customs and Excise Act is to recover unpaid or the balance of underpaid customs duty.

However, the provision is widely cast in a way which allows Zimra officers to act arbitrarily, to the detriment of the lawfulness, fairness and proportionality.

In this regard, Justice Chinamora said this acts unfairly in the case of innocent purchasers of improperly cleared goods, finding that Mr Musarara had satisfied the court that he was entitled to the relief that he sought.

"I, therefore, hold that sections 192 (1) and (1a) of the Customs and Excise Act fall foul of sections 68 (1) and 56 (1) of the Constitution, and that the relief sought can be afforded," said Justice Chinamora striking out the impugned sections as being invalid.

The ruling will now be referred to the Constitutional Court for confirmation of the order of invalidity.