The SCA has upheld an appeal by SARS justifying its decision to seize 19 containers of cheap clothes from China, reports Fin 24.

‘There was no credible explanation for the unbelievably low prices charged by the suppliers of the goods,’ the court ruled yesterday.

‘The goods and the containers in which they were imported were liable to forfeiture.’

The tax agency confiscated the goods in 2020 on the basis that they had been clearly under-invoiced. It argued that Gauteng-based clearing agent Dragon Freight and six other importers had been unable to explain how they were able to source the goods at such low prices.

But the revenue collection agency's seizure order was overturned in December 2020, when Judge Selby Baqwa, of the Gauteng High Court (Pretoria), ordered that the containers be released.

Baqwa argued that SARS should have accepted the initial answers given by the importers. The subsequent research it conducted and the follow-up questions it posed were ‘procedurally unfair’ or ‘irrelevant’.

But the SCA found Baqwa's decision was flawed.

‘The High Court erred in disregarding not only the evidence showing that the agreements were false, but also the reasons for the impugned decision, despite quoting those reasons verbatim in its judgment.’

In its case, SARS had relied on evidence provided by textile expert Dr Jaywant Irkhede, who noted that the importers claimed they were able to source clothes for around R3 per item. While the importers disputed Irkhede's calculations, the court found that his evidence ‘makes it clear that the prices declared by the importers were unrealistic and unattainable’.

Full Fin24 report