Page 740 - SAIT Compendium 2016 Volume1

CASE DIGEST 2012–2013
Administration Act 28 of 2011. In terms of this section, the nal winding-up proceedings ‘may only be instituted with leave of the Court before which the proceedings are brought’ in the event that tax debt is still pending for appeal to the Tax Court.
Facts
The respondent claimed that the application had to be dismissed since the applicant failed to seek the court’s leave (to institute the winding-up proceedings) prior to the institution of these proceedings. According to the respondent’s interpretation of s 177(3), an application of winding-up may be instituted if, and only if, prior leave has been granted by the court before which any winding-up proceedings are ultimately brought.
Held
In this matter the court had to determine when the discretion to permit the winding-up proceedings, referred to in s 177(3), must be exercised by a court. The court found that the words ‘the proceedings may only be instituted with the leave of the court before which the proceedings are brought’ only mean that the tax debt under dispute is not recoverable under the ‘pay now, argue later’ rule during winding-up proceedings, unless the court before which those proceedings serve, permits it.
The respondent could not convince the court that there were any grounds in terms of which the court should have refused to institute winding-up proceedings on account of the pending appeal. Since the respondent was hopelessly insolvent it was inevitable that the respondent’s affairs would be wound up. As a result, the court granted leave to the applicant to institute the winding-up proceedings and placed the respondent under a nal order of winding-up.
[Link: http://c.ymcdn.com/sites/www.thesait.org.za/resource/resmgr/2014_case_law/miles_plant_hire_(pty)_ltd_-. pdf]
7. The constitutionality of targeted non-routine searches in terms of s 4 of the Customs and Excise Act conducted without judicial warrant
[Gaertner & Others (including Orion Cold Storage) v the Minister of Finance & Others (Case CCT 56/13 [2013] ZACC 38: Constitutional Court – 14 November 2013)]
Introduction
In these proceedings, the applicants, being Gaertner & Others, sought orders declaring the relevant part of s 4 of the Customs and Excise Act 91 of 1964 (‘the Act’) to be unconstitutional to the extent that it permitted targeted non-routine searches to be conducted without judicial warrant, declaring the searches to have been unlawful by virtue of the way they were conducted and requiring SARS to return everything taken or copied.
Facts
Orion Cold Storage (Pty) Ltd (‘OCS’), the third applicant in this case, is involved in the importation and distribution of frozen foods. When a Canadian supplier instituted motion-proceedings against OCS, it came to SARS’ attention that the prices according to the supplier’s invoices were substantially higher than those on the invoices submitted to SARS for custom duty purposes. SARS suspected that OCS fraudulently manipulated these invoices in order to pay less duty and consequently a search was conducted on OCS’s premises in Muizenberg.
Although SARS was not in possession of a search warrant, they took over control of the premises, copied data on various computers and con scated certain documents and objects. The search was extended to the private home of a director, Mr Gaertner (the rst applicant), where SARS of cials demanded access to the personal belongings of the director and his family. Yet again, the search was performed without a search warrant and SARS of cials refused to supply reasons for the proceedings.
OCS and its directors applied to the High Court and sought a declaration that the searches and seizures were unlawful and that s 4 of the Act is inconsistent with the Constitution and invalid to the extent that it permits targeted, non-routine enforcement searches to be conducted without a warrant. The High Court concluded that warrantless non-routine or targeted searches (as in this case) were acceptable in respect of pre-entry facilities, licensed warehouses and rebate stores to the extent that it relates to the business of operating these facilities. The court held that searches without a warrant are unjusti able in all other instances. Consequently, the court made a declaration of invalidity, suspended s 4 of the Act and read in certain words into that section.
The applicants turned to the Constitutional Court to con rm the declaration of invalidity made by the High Court and it opposed the following provisions of s 4 of the Act:
• The permission of entry and search of virtually any premises that have some connection with the persons being
inspected or investigated.
• The of cial invoking the search does not have to hold a belief or apprehension of a contravention of the Customs and
• Excise Act to justify the search.
No guidance is provided regarding the manner in which a search is to be conducted.
Furthermore, the applicants contended that the High Court erred in the nding that warrantless non-routine searches
of designated premises are justi able in all and any circumstances. They also argued that it should be con ned to the designated premises in question and should not be extended to any of the licensees’ other premises or of ces.
The Minister of Finance opposed the declaration of invalidity of s 4 to a certain extent. He argued that the production of records does not violate the right to privacy if a person is required to keep the relevant records in terms of the Act. Furthermore, he claimed that it is not unconstitutional for an of cial to require assistance from police if there is reasonable suspicion of resistance requiring protection. The Minister also argued that the interim order is too detailed and that the distinction between routine and non-routine searches is unhelpful and theoretical.
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