SARS wins sequestration order against tobacco importer
SARS has won an order provisionally placing the assets of a tobacco importer under court control after it accused him of owing R188m in income and customs tax debts, reports News24.
SARS won the provisional sequestration order in the Gauteng High Court (Pretoria) on Wednesday against the estate of Roy Muleya, a businessman with interests in SA and Zimbabwe.
The tax agency said a company that Muleya was the sole director of, Afri-Teecee Investments, owed around R155m in customs debts.
Under SA tax law, the director or manager of a company can — in some instances — be held responsible for a company’s debts.
It also argued that Muleya owed another R32m in income tax debt.
The revenue service said a probe identified Muleya as a key role player in a scheme to import tobacco into SA by entities with ‘no obvious links to registered cigarette manufacturers’.
The tax agency first tried to sequestrate Muleya back in late September 2021, shortly after it won a liquidation order against a company he was linked to, called Verbena Freight and Logistics.
While SARS succeeded in having Verbena wound up, its sequestration case against Muleya was delayed.
In September 2021, it argued for an urgent hearing, saying it feared Muleya was selling off assets.
But the case was not immediately enrolled. Muleya, at the time, disputed the tax debt. He said he had initiated a case in Tax Court that should be heard first, while also arguing he shouldn’t be held responsible for Afri-Teecee’s debts, according to News24.
The matter was only heard in May 2023, and the ruling was handed down, some two years and five months later.
In the new ruling, Judge Gcina Malindi dismissed arguments put forward by Muleya’s legal team that SARS Commissioner Edward Kieswetter did not have legal standing to bring the case, saying tax law clearly gives him the authority to do so.
Malindi also found that Muleya committed acts of insolvency when he moved properties into the name of a family trust a month after SARS had issued its final demand in respect of the income tax debt.
The two sides will meet in court again in February, when Muleya will be given a chance to argue why the provisional order should not be made final.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
