SARS raid ruled invalid, unconstitutional

The sections relate to powers afforded by the act, which authorises officers from the South African Revenue Service (SARS) to search premises without a search warrant.

Orion Cold Storage's managing director Patrick Gaertner and the company challenged the provisions of the act that allowed SARS officials to search the company's premises in Muizenberg, Cape Town, and Gaertner's private residence last May, without giving reasons why they were doing so and what they were looking for.

At issue was whether the provisions in the Excise and Customs Act infringed on the privacy right guaranteed by the constitution.

The court said guidelines need to be developed to properly balance the person's right to privacy with SARS's legitimate interest in infringing on such privacy for the purposes of the Customs and Excise Act.

Judge Owen Rogers found that, by participating in a regulated field, the participant could reasonably be assumed to accept that he must tolerate routine random intrusions aimed at ensuring that all participants comply with their statutory duties.

However, the court found that the participant did not expect to become the target of violations of his privacy on the grounds of what might be baseless suspicion of non-compliance. The court found that the participant was entitled to say that if state officials wished to enter his premises because of a suspected contravention of the law, the state officials must not do so without satisfying a judicial officer.

In this case, 14 SARS officials conducted the search on suspicion that Orion Cold Storage had fraudulently manipulated invoices to pay less duty, thereby committing various offences under customs and excise laws.

No warrant required

The searches were done in terms of the Customs and Excise Act and no search warrant was required for the search. The search at Orion Cold Storage premises lasted about five hours, and SARS took copies of documents without drawing up an inventory of them. Having allegedly not found what they were looking for at Orion Cold Storage's premises, SARS officials searched Gaertner's Constantia home for the documents.

Rogers said his declaration that some sections were constitutionally invalid would not have an immediate effect. He suspended the declaration for 18 months to afford the legislature an opportunity to amend the offending provisions.

The judge outlined a number of the guidelines that needed to be incorporated in the amendments.

These included that entry should take place only during ordinary business hours, unless the officer reasonably considered that entry at another time was necessary on the grounds of urgency. Rogers said the officer should inform the person in charge at the premises whether the search is routine or non-routine. If the search is non-routine and a warrant is not needed, the officer should furnish to the person in charge a written statement of the purposes of the search.

Rogers said the non-routine searches for which warrants would be needed would relate to the purposes of the Customs and Excise Act, not a criminal investigation.

"SARS should not have to depend on the police in order to obtain warrants for these searches," he said.

Rogers said if anything was removed by an officer from the premises, the officer should provide an inventory of removed items to the person in charge. He said if SARS copied documents, SARS should provide the person in charge with a list of the material copied. He also said decency and order should be strictly observed during the search.

Source: Business Day via I-Net Bridge