Gutusa and 34 Others v Zimbabwe Revenue Authority (203 of 2024) [2024] ZWHHC 203 (13 May 2024)

1 HH 203 - 24 HC 7382/23 SHEPHERED GUTUSA and 34 ORS versus ZIMBABWE REVENUE AUTHORITY HIGH COURT OF ZIMBABWE TAKUVA J HARARE; 27 November 2023 and 13 May 2024 Urgent Chamber Application G R J Sithole with G Chiuta, for the applicants S Bhebhe, for the respondent TAKUVA J: “Pay now and argue later” is a tax law principle used as a different expression of the biblical injunction to “render unto Caesar what belongs to Caesar.” This is an Urgent Chamber Application wherein the applicants seek spoliatory relief against the respondent, effectively setting aside of the Notices of Seizure that have been issued against them in respect of the various vehicles which they individually imported. BACKGROUND 1. The respondent is an administrative authority established in terms of the Revenue Authority Act [Chapter 23:11] and tasked inter alia with the administration and collection of revenues due in terms of the Customs and Excise Act [Chapter 23:02] (herein after “the CEA”) 1.2 The Government of Zimbabwe through the Ministry of Finance and Economic Development, introduced a scheme wherein qualifying members of the civil service are entitled to a motor vehicle rebate on importation of vehicles. 1.3 In order to give legal effect to the said scheme Statutory Instrument 52 of 2019 (customs and Excise General) Amendment Regulations 2019 was enacted. The same HH 203 - 24 HC 7382/23 was further amended through Statutory Instrument 80A of 2022. The said statutory instruments were enacted in terms of the CEA and as such, fell under the purview of the respondent. 1.4 Qualifying members of the Civil Service including members of the security services would apply for this scheme through their relevant line ministries and through the Ministry of Finance and Economic Development. After the relevant line Ministry and the Ministry of Finance adjudges that an employee qualifies for the scheme, then the said employee would approach the respondent’s officers for the processing of a rebate. All applicants in casu engaged “consultants” or “Agents” to assist them with the rebate application process. In terms of PART XI of the CEA, the Commissioner General of the respondent is empowered to grant a rebate to any person who qualifies for the same. 1.5 As part of its operations and in order to ensure compliance with tax legislation, respondent conducts periodic audits to ensure that citizens are complying with all the applicable tax legislation. In the context, respondent engaged the Ministry of Home Affairs in order to conduct the audit for all rebate. In turn, the Ministry engaged the ZRP for it to furnish names of its members who benefited from the civil service rebate. 1.6 Members of the ZRP brought their vehicles and accompanying documentation for verification by respondent’s officials to ensure compliance with applicable tax legislation. It turned out that their vehicles were cleared using fake rebate letters. Once it was discovered that the rebate letters, were fake, the provisions of s 174(1) as read together with s 193(1) of the CEA automatically kicked in and the vehicles were seized. Further once the rebate letter is found to be fake, it follows that duty on the importation of the vehicle becomes due and payable. Accordingly, respondent cannot release the said vehicles unless the applicable duties and penalties have been fully paid. APPLICANTS’ CASES All the applicants averred that they were in peaceful and undisturbed possession of their respective motor vehicles they had imported with the approval and consent of the respondent on HH 203 - 24 HC 7382/23 rebate using the civil servants rebate on motor vehicles in terms of SI 52/19 and the Commission’s is Circular No. 2/22. They further alleged that respondent unlawfully seized motor vehicles belonging to applicants without disclosing the basis for the seizure of the motor vehicles. Applicants petitioned the respondent in terms of the law to have the motor vehicles released from its custody however, instead of responding to the issues on 1 November 2023, the respondent advised the applicants that the Zimbabwe Anti-Corporation Commission is handling the matter. According to applicants, it is unlawful for the respondent to seize motor vehicles on behalf of the Zimbabwe Anti-Corruption Commission who can in terms of the Criminal Procedure and Evidence Act apply for a warrant of search and seizure in the event of an on going criminal investigation process. The actions of the respondent constitute an act of spoliation and the respondent has no legal basis to continue to deprive the applicants’ possession of their respective motor vehicles. Applicants filed this application as a last resort seeking the restoration of all the motor vehicles custody to them. Essentially, they want all the notices of seizure to be set aside as they were allegedly issued unlawfully. Applicants submitted that by their nature spoliation proceedings are urgent and courts treat them as such. Also, any delay in approaching this court for urgent relief has been accounted for by the fact that applicants were pursuing the domestic remedies availed to them by the notices of seizure in terms of s 193 of the CEA. Put differently, when the need to act arose, the applicants acted. The need to act arose on 1 November 2023 when applicants received a letter from respondent informing them that the matter had been referred to ZACC. This application was filed on 14 November 2023 and the delay between the 1st and 14th November has been satisfactorily explained in that all applicants had to visit their lawyers to make depositions. The second to thirty-fifth applicants adopted, incorporated and associated themselves with first applicant on the question of urgency. All applicants relied on the following cases: (1) Chiwenga Mubaiwa v SC 86/20 (2) Karori (Pvt) Ltd Mujachi v HH 23/07 (3) Chisweto Minister of Local Government v 1984(1) ZLR 248(H). NON-COMPLIANCE WITH S 196 of the CEA HH 203 - 24 HC 7382/23 Applicants argued that s 196 is inapplicable because spoliation is a common law remedy meant to arrest unlawful conduct. It would be absurd to ask an applicant to wait for 3 months. Secondly, s 196 is read with s 6 and sections of the state Liabilities Act. In terms of s 7 applicants do not have to give notice where the matter is urgent or where the court has determined the matter to be urgent. Thirdly, it was submitted on the authority of Ajara Trucking v Zimra HH 09/23 that notice is to be given only where one is proceeding against the Commissioner. FAILURE TO EXHAUST DOMESTIC REMEDIES. Applicants’ argument is that since spoliation is a common law remedy not found in the CEA. They would not rush to customs but to the court. It was further submitted that domestic remedies must be effective. In casu the fact that respondent referred matter to ZACC shows that domestic remedies are ineffectual. Applicants can not return to respondent and wait for 3 months. RESPONDENT’S CASE Respondent opposed the application by raising a number of points in limine. Firstly, respondent submitted that the application is not urgent in that no applicants have placed before this court facts which support that the present matter ought to be heard on urgent basis. Applicants have not averred any irreparable harm which would occasion them if the present matters are not heard on an urgent basis. It was also argued that the majority of the applicants’ vehicles were seized in the first weeks of October 2023 that is between 5 October 2023 and 18 October 2023. The remaining applicants’ vehicles were seized on 8 May 2023, 17 May 2023, 18 September 2023, 8 August 2023 and 31 January 2023. It is apparent from the above that none of the applicants acted urgently when the duty to act arose, namely, when the notices of seizure were issued in respect of the motor vehicles. The current application was only filed on 14 November 2023 almost a month after the majority of the applicants’ vehicles were seized. Respondent also averred that the vehicles were legally seized in terms of section 174(1) as read with s 193(1) of the CEA which empowers the respondent to seize any artefact or property suspected of having been imported into the country without paying the requisite duty. Respondent discovered that false rebate letters were attached to their papers which is a contravention of the CEA. HH 203 - 24 HC 7382/23 It follows, so the argument goes, that Respondent followed laid down lawful procedures when dealing with property suspected of having not paid the requisite duty. There is no unlawful conduct which the applicants seek to be interdicted on an urgent basis. This court should only intervene on an urgent basis in situations where an unlawful conduct is being perpetuated against a litigant which is simply not the case. ANALYSIS NO URGENCY IN RELATION TO 2 ND – 35 TH APPLICANTS 1. Respondent averred that 2nd applicant through to the 35th applicant have not deposed to facts which justify their matters being treated as urgent. Each applicant is case stands or falls on the founding’s affidavit filed of record. 2. A reading of the founding’s of the 2nd to the 35th applicants demonstrates that neither of the said applicants have averred to the facts that justify each of their cause of action jumping the queue of other matters. 3. 2nd to 35th applicants have attempted to ride on the founding affidavit of the first applicant in so far as urgency is concerned. Urgency relates to the facts of each applicant’s matter and how they approached their matter. Respondent in a bid to illustrates this point referred to the following affidavits: (a) 5th applicant one Arnold Moyo said his vehicle was seized on21 May 2023 and the present urgent chamber application was filed in November 2023. (b) The 22nd applicant one Godknows Mushayi had his vehicle seized on 8 August 2023 while the present application was only filed in November 2023. (c) Desire Tashaya 29th applicant’s motor vehicle was seized on 18 September 2023 and the present application was filed in November 2023. (d) The 30th applicant in this matter, one Cathrine Zinungu had her vehicle seized on 8 May 2023 while the present application was filed in Noveber 2023. (e) The 32nd applicant in this matter, one Paul Matembo had his vehicle seized on 17 May 2023 and the present application was only filed in November 2023. In Econet Wireless (Pvt) Ltd v Postal and Telecommunications Regulatory Authority of Zimbabwe 2014 ZIR 693 (H) the court stated that: HH 203 - 24 HC 7382/23 “The founding affidavits must disclose urgency. The deponent to the founding affidavit should therefore be alive to the fact that he is bringing a matter to the court on an urgent basis. It is incumbent upon him to articulate fully in his affidavit, why he is beginning the matter on an urgent basis and why he cannot wait and enroll the matter on the ordinary roll. He cannot simply regurgitate the history of the matter and expect that he may persuade the court to find the matter urgent by merely outlining the irreparable harm likely to ensue. He must make specific averments on the allegation that the matter is urgent and cannot wait – nor can the deponent to the founding affidavit leave it to his counsel to address the issue of urgency of the matter at the hearing either.” In casu 2nd applicant to 35th applicants did not specifically plead urgency in their founding affidavits. None has bothered to justify their separate causes of action and the urgency of their individual cases. It has not been denied that each of the applicants has different circumstances which have the reasons for alleged urgency of their individual cases different. Therefore, where an applicant’s founding affidavit is silent on urgency, there will be no case for such an applicant’s matter to be treated as urgent. As regards the first applicant’s founding affidavit, the only discernible basis for the urgency is merely on the financial hardship that may arise from the storage costs. It is trite that the mere fact that there will be loss of money does not in itself create urgency In LAVAL INVESTMENTS (Pvt) Ltd VB. A. NCUBE HOLDINGS (Pvt) Ltd T/A AIRPORT ROAD FILLING STATION HB 158 /04. The court held as follows: “Paragraphs 2.1 and 2.3 do not establish the type of urgency contemplated by the rules. All that can be discerned from these paragraphs is that money will not be lost. The consequences of loss of money will easily be remedied by a claim of damages.” See also Fairdrop Trading ( Pvt) Ltd v The Zimbabwe Revenue Authority HH 68-14 where the court I stated shows thus: “The applicant is not without my sympathy. It is undoubtedly in dire straits. It has made a very persuasive moral augment for the hardship it is facing. But one should not be dazzled by that. The argument is short on law. The respondent has the law on its side. It must be assumed that parliament was alive to the hardships or unfairness of the application of s 69 of the Income Tax Act--- I find nothing peculiar in the circumstances on the applicant to warrant a testament that is different from the rest of other tax payers that may find themselves with objectionable tax HH 203 - 24 HC 7382/23 assessments against which they will have appealed. The garnishees may worsen the applicant’s bad situation. But regrettably, those are some of the natural consequences of the application of the law----. The applicant was offered chance to avert the garnishees by offering an acceptable payment plan. Before it filed the urgent chamber application more had been submitted.” Generally, a party who brings proceedings urgently must show good cause why he should receive preferential treatment. A party seeking to be accorded the preferential treatment must set out, in the founding affidavit facts that distinguish between the ease from others to justify the granting of the order for urgent hearing without breach of the principle that similarly situated litigants are entitled to be treated alike, See Document Support Centre (Pvt) Ltd v Mapuvire 2006(1) ZIR 232(H) 243G, 244A-C. In the exercise of its discretion, a court must consider whether or not a litigant wishing to have the matter treated as urgent has shown the infringement or violation of some legitimate interest and whether or not the infringement of such interest if not redressed immediately would not be the cause of harm to the litigant which any relief in the future would render a brutum fulmen. The first applicant has failed to show why he deserves preferential treatment. He has not treated the matter as urgent when his vehicle was seized. NON- COMPLIANCE with S. 196 (1) of the Civil Evidence Act. The section provides: s 196(1): “No civil proceedings shall be instituted against the state, 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 8.15].” (Emphasis added). Section 6 of the State Liabilities Act provides: “6 Notice To Be Given Of Intention To Institute Proceedings Against State Officials In Respect Of Certain Claims. 1. Subject to this Act, no legal proceedings in respect of any claim for__ (a) Money, whether arising out of contract delict or otherwise, or (b) The delivery or release of any goods , and whether or not joined with or made as an I. II. alternative to any other claim, shall be instituted against__ The State; or The President or vice President or any Minister or Deputy Minister in his official capacity; Unless notice in writing of the intention to bring the claim has been served in accordance with subjection (2) at least sixty days before the institution of the proceedings. 2. A notice referred to in subjection (1) _ HH 203 - 24 HC 7382/23 (a) Shall be given to each person upon whom the process relating to the claim is required to be served, and (b) Shall set out the ground of the claim; and (c) Where the claim arise out of goods sold and delivered or services rendered, shall specify the date and place of the sale or rendering of the service and shall have attached copies any relevant invoice and requisition, where available; and (d) Where the claim is against or in respect of an act or omission of any officer or employee of the State, shall specify the name and official post, rank or number and place of employment or station of the officer or employee, if known. 3--------- 4--------.” Section 7 has exemption provisions. It states: “7 EXEMPTIONS Section six shall not apply to- (a) A claim in which the debt concerned has been admitted to the claimant, expressly and in writing; or (b) A counter claim (c) A claim which the court or judge or magistrate, on application, has determined to be urgent; or (d) A claim in respect of which the defendant has waived, expressly and in writing, the notice required by section six.” These provisions are crystal clear in my view. Despite that clarity, they have been the subject of litigation in a plethora of cases. In Ronald Machacha v Zimbabwe Revenue Authority HB 186/11 the court stated: “The applicant ignored this provision at his own peril. The primary objective of the provision is provision of timely opportunity to the Zimbabwe Revenue Authority (“ZIMRA”) to know and therefore investigate the material facts upon which its actions are challenged and to afford ZIMRA opportunity of protecting itself against the consequences of possible wrongful action by tendering early amends as envisaged by the Act – Ebrahim v Controller of Customs 1985 (2) ZIR I (SC); Building and Engineering Supply CO (Pvt) Ltd v Controller of customs and Excise 1988(1) ZLR 402 (SC). The failure to give this notice is fatal as the applicant is effectively barred from instituting proceedings for recovery of the motor vehicle unless of course if the Commissioner is prepared to waive or extend the period. On this point alone the application should be dismissed without even considering the, merits of the ease.” (Emphasis added) See also Care International in Zimbabwe v Zimra and Ors HH 373/15 where the court remarked that: “It is important at this stage to also take note of the endorsement on the official Notice of Seizure issued to the applicant on 27 September 2012. The relevant endorsement reads as follows: “If you wish, you may, within three months from the date of this notice, make your own written representations to the Port Manager of the Port shown on this notice, for the release of the goods. HH 203 - 24 HC 7382/23 Additionally or alternatively you may within three months from the date of this notice and subject to the submission of written notification 60 days before hand in terms of the provisions for the recovery of the goods from the Commissioner or…… ` The endorsement on the seizure notice cannot be taken lightly. It explains the law and those affected, like the applicant, should obey the mandatory provisions of the law. There was therefore a clear need on the part of the applicant to give the requisite notice to the first respondent before making this application. Failure to give the notice was in my view fatal. There is therefore no proper application before the court and as clearly stated, upholding this point in limine, means that the court cannot proceed to do anything else.” emphasis added. See also T. M. Supermarket (Pvt ) Ltd v Zimra HH304/16 Mr Sithole for the applicants argued that this application is one of spoliation which is a common law remedy, therefore applicants need not give notice in terms of section 196. He further argued that since spoliation is meant to arrest unlawful conduct and if one waits for three months, it will lead to an absurdity. Secondly, he argued that section 196 of the CEA is read with section 6 and 7 of the State Liabilities Act. He placed reliance on s 7(c) which provides that there is no need to give notice where the matter is an urgent one or where the court has determined the matter to be urgent. Finally it was argued that section 196 is in applicable in that the applicants, are not proceeding against the Commissioner. I do not agree with this reasoning for the following reasons: (1) Section 196 refers to any civil proceedings and spoliation proceedings are civil proceedings. In my view this is undeniable. In casu whether or not the nature of the cause of action is steeped in common law is neither here nor there because essentially the relief is for the recovery of motor vehicles seized by the respondent in terms of the provisions of the CEA. Further section 6 (a) of the State Liabilities Act refers to claims arising out of contract, delict or otherwise. Paragraph (b) of the same section clearly shows that claims for delivery or release of any goods are covered as those proceedings that are restricted. I take the view that as long as the court proceeding are against the Commissioner or his officers and involves their conduct in terms of CEA, it becomes immaterial that the cause of action is delictual, contract, common law or otherwise. The proceedings remain “civil proceedings” covered by s 196. Accordingly, notice will be required before instituting court proceedings. There is no absurdity at all in that the legislature provided an HH 203 - 24 HC 7382/23 exception in section 7(c) to those with genuine urgency. However, the requirements of that paragraph must first be met. (2) The applicants cannot rely on the exemption in s 7(c) because they have not complied with its provisions. No application for the determination of the matter as urgent has been filed with this court. No determination was made prior to the institution of these proceedings to the effect that the matter is urgent. In any event, the issue of urgency became an issue when the respondent raised a point in limine that the matter is not urgent. As indicted earlier I found that this application is not urgent. (3) Applicants argument that s196 does not apply because they are not proceedings against the “Commissioner” is totally devoid of merit. Section 196 states inter alia that: “against the state 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--.”(Emphasis added). It is common cause that in casu the acts complained of were committed by the respondent’s officers under the C. E. A. The law does not make a distinction between acts committed by the Commissioner and those committed by the officers. In the result, it is neither here nor there that the suit is not against the “Commissioner.” For these reasons, I find that the applicants’ argument lacks merit. It follows therefore that the fact that s 196 (1) of the C. E. A was not complied with means that the current application is a nullity. See anything done contrary to the law is a nullity Mcfoy v United Africa Co Ltd [1961] 3 aller 1169(PC) at 1172, the court held as follows: “If an act is void, then it is in law a nullity. It is not only bad but incurably bad. There is no need for an order of the court to be set aside. It is automatically null and void without more ado, although it is sometimes convenient to have a court declare it to be so. And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse.” Emphasis added. See also Commissioner of Taxes v Astra Holdings (Pvt) Ltd 2003(1) ZCR 417(S) at 428 A-C. The application in casu is a nullity and is hereby dismissed with costs. Mawonera Attorneys, applicants’ legal practitioners Kantor & Immerman Legal Practitioners, respondent’s legal practitioners HH 203 - 24 HC 7382/23