Sars is flexing its muscles

A judgment regarding a Sars search and seizure operation was handed down by the Pretoria High Court on April 28, 2022.

The judgment, Kapeel Bechan and Bechan Consulting (BC) v Sars Customs Investigation Unit, the Sars Illicit Economy Unit, Sars Tactical Investigations Unit, the Minister of Police, and the Hawks Tactical Investigations Unit, shows that Sars has definitely turned a corner, and is getting its crack investigative units up and running.

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Bechan and BC had applied to the court to have certain items that had been seized by Sars under a search warrant returned.

It is to be noted that neither Bechan nor BC are the taxpayer. Bechan happened to be at the taxpayer’s premises during Sars’s search.

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Sars had obtained a warrant under the Tax Administration Act (TAA) to search the premises of a taxpayer and seize relevant information and documents. The Sars team included the Sars Customs Investigation Unit, the Sars Illicit Economy Unit, and the Sars Tactical Investigations Unit.

Not a simple search and seizure 

It wasn’t smooth sailing, the taxpayer’s premises were in an office park shared with a number of other companies, and Sars was not immediately granted access to the premises. Waiting for access, Sars “observed various people carrying items from the office premises to motor vehicles parked in the parking area”.

When Sars eventually obtained access to the premises, they found the directors of the company as well Bechan, who was there “purportedly to do business with another entity”.

There were a number of vehicles parked in the parking lot, and it appeared to Sars that “documents relating to the taxpayer which fell within the ambit of the warrant” were in some of these vehicles.

According to Sars, Bechan told Sars that he did not have the keys to his vehicle and was therefore unable to open his car.

Sars then called the South African Police Service (SAPS) as well as the Hawks Tactical Investigations Unit to assist. Sars also procured the services of a locksmith to open Bechan’s vehicle, as well as the vehicles of other owners who had refused to open them. The vehicles were only opened at 22:00 that night.

Once Bechan’s vehicle was opened Sars removed items and took them into custody, and inventoried the items.

In court, Bechan asserted that he had handed his keys to Sars, and denied being present when the items were removed from his vehicle, and also denied that some of the items that Sars had removed from his vehicle were in his vehicle.

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Evidence

However, Sars had taken “photographs which showed his vehicle full of lever arch files relating to the taxpayer and other businesses as well as various lap top computers laid out on the ground outside the vehicle”.

By the time the court application was heard, most of the items had been returned to Bechan, except for two laptop computers and two cellphones. Bechan denied that the other eight laptops and two cellphones that had been returned to him were in his vehicle.

When Bechan requested the return of these items, Sars informed him that he would have to furnish proof of ownership of these devices for them to be returned to him.

The court noted that Bechan “was either unable or unwilling to furnish proof of ownership requested by Sars”.

This court hearing came about because Bechan had brought an application to have these two laptop computers and two cellphones returned to him, and chose to proceed by way of urgent application for a “mandament van spolie” for the return of the items.

The counsel for Sars argued that Section 66 of the TAA sets out the procedure to apply for the return of seized relevant material or costs of damages. The aggrieved person must request Sars to return the material and/or pay for damages. And it is only if Sars refuses to do so that the aggrieved person may apply to the high court for an order.

However, a mandament van spolie is not a remedy that can defeat the execution of a lawfully issued warrant. The court then had to determine whether the items had been lawfully seized.

The court noted that on Bechan’s version, he had handed his keys to Sars. The court reasoned that if Bechan had “voluntarily relinquished possession of the vehicle”, the fundamental requirements for the mandament van spolie would not have been met.

The court found that:

• It was improbable that Bechan had voluntarily handed his keys to Sars, as Sars would then not have had to involve the SAPS and the Hawks, nor a locksmith. Nor would Sars, the SAPS and the Hawks have had to be at the premises until after 10:00 that night.
• There is no doubt that Bechan was deprived of possession by Sars.

The court referred to Section 62 of the TAA, which provides for the search of premises not identified in the warrant.

“If a senior SARS official has reasonable grounds to believe that:

• “The relevant material referred to in the issuance of the warrant, and included in the warrant is at premises not identified in the warrant, the material may be removed or destroyed,
• “A warrant cannot be obtained in time to prevent the removal or destruction of the relevant material,
• “The delay in obtaining a warrant would defeat the object of the search and seizure,

“a SARS official may enter and search the premises and exercise the powers granted in terms of this Part, as if the premises had been identified in the warrant.”

The court found that Sars was entitled to ascertain whether Bechan “had in his possession or under his control any of the taxpayer material specified in the warrant”. The court concluded, taking into account Sars’s observation that materials were being carried to vehicles in the parking lot while their access to the premises was delayed, it was not unreasonable that Sars would search Bechan and his vehicle.

The court held that the warrant provided for the search “anywhere on the premises identified in the warrant, and that this would include vehicles parked on the premises”. The court added that “even if it could be argued that the warrant was not wide enough” to cover Bechan’s vehicle, the provisions of Section 62 set out above would have entitled Sars to open the vehicle and take possession of any taxpayer information within.

The court dismissed Bechan’s application with costs.

This article originally appeared on Moneyweb and was republished with permission. Read the original article here.