S.AFRICA: Huang & Mpisi Trading 74 (Pty) Ltd – Search & Seizure Warrants under Tax Administration Act, 2011

Here is the full judgment:

SA Tax Court search seizure review less intrusive Huang and Others Including Mpisi Trading 74 Pty Ltd 13 August 2014

I’m sure there is a chance it will go to the SCA with these legal expenses incurred.

Take aways – from this judgment, SARS does not have a very high threshold in issuing search & seizure warrants. However, the judgment is disappointing on the issue of ‘proportionality’ in the context of constitutional/administrative law.

Quoting a famous English case –  Proportionality can best be described in the famous sentence of Lord Diplock in R vs Goldstein (1983): ‘You must not use a steam hammer to crack a nut, if a nut cracker would do’. In applying the test for proportionality courts will ask the following questions:

(a)        Whether the action pursued a legitimate aim?

(b)        Whether the means adopted to achieve the aim were appropriate?

(c)        Whether less restrictive means adopted to achieve that aim?

(d)        Whether overall the interference with the individual’s rights is justified in the interest of a democratic society?[1]

[1] Routledge Cavendish, Constitutional Law, Fifth Edition, 2006 at page 143; These questions are also in line with section 36 – Limitation of rights.

SARS have used a sledgehammer to crack a nut – when in fact all they had to do was request information and/or then call the taxpayer in to answer certain questions and if that didn’t work, then to call the appropriate enquiry in order to look into the affairs of the taxpayer, and as a last resort then to resort to search and seizure warrants.

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