HIGH COURT OF LESOTHO
LESOTHO (PTY) LTD APPLICANT
OF SALES TAX 1st RESPONDENT
GENERAL 2nd RESPONDENT
by the Honourable Mr. Justice T. Monapathi on the 4th day of February
application which was filed on the 20th May 1997 sought for the
the decision of the Respondent dated the 15th July 1996, that the
goods imported by the Applicant into Lesotho for re-export should
not be regarded as temporary imports and that the Sales Tax paid
thereon by the Applicant, should be reviewed be set aside.
Respondent should be directed to immediately pay the amount of R99
734.48 together with interest thereon at the rate of 18.25% per
annum from the 15th day of July 1996 to the Applicant.
Respondent should be directed to pay the costs of this application.
background to this proceedings showed that the Applicant had been
granted a licence to carry on the business of a broker on the 7th
December 1995. The Applicant said that its business was to import and
export goods from South Africa into Lesotho and thereafter re-export
them to other African countries. Applicant had later applied for
import permit on the 21st March 1996. The application showed the
goods that the Applicant sought to import and re-export to African
countries. It was at page 18 of the proceedings. It was common cause
that there had never been an import/export licence in favour of the
Applicant even at the time when this application was launched.
founding affidavit the Applicant said it approached the Department of
Customs and Excise (Customs) to establish what was required of it
when goods were brought into Lesotho and were temporarily in Lesotho
intended for re-export. In that regard a meeting was held between
Customs, the Ministry of Finance, the Sales Tax Department and the
Applicant. Customs advised the Applicant as to what was required of
it for imports to be considered as temporarily held in Lesotho for
export. The annexure marked "D" to the proceedings was a
copy of a letter from Customs dated the 26th April 1996. I noted that
as the Applicant itself said in paragraph 7 that the letter was in
response to what would (as a matter of procedure) be required in the
future. This meant that no specific goods had as at that time been
common cause that certain goods had later been imported into Lesotho
by the Applicant and sales tax was charged thereon. Applicant was
claiming refund of the sales tax paid by it on the ground that the
goods were temporarily imported into Lesotho to be exported at the
same time. The real issue before Court was therefore more than
whether the goods were imported into Lesotho by the Applicant were
exempted from payment of sales tax. It was whether the Applicant as a
vendor was certified for exemption.
Applicant stated at paragraph 8 of its founding affidavit that
resulting from the meeting where the requirements of the Department
of Customs and Excise were stated the First Respondent's office
became involved in the matter and carried out certain investigations.
I noted that these investigations were not specified as to their
nature. Applicant said that some meetings and discussions were held
between the First-Respondent and the Applicant as a result of which
it was ruled by the Respondent that the Applicant should pay Sales
Tax on all the goods imported into Lesotho. Significantly it was not
stated when the meetings were held. This assumed importance in my
view because the absence of any attempt to mention the dates upon
which certain events took place. This included the contents of all
the paragraphs until the paragraph 15 in which annexure "E"
dated the 15th July 1996 is spoken about and which letter make
reference to Applicant's letter dated the 29th April 1996. It must
have been at these meetings about which oblique reference was at
which the Applicant said that:
"The Respondent further held that it wanted to satisfy (himself)
that the goods were imported into Lesotho temporarily and that they
were exported from Lesotho again." (My underlining)
by the Applicant's owned admission leaving aside the description of
which the Applicant never vouchsafed, the Respondent would have
wanted to satisfy itself that the goods were imported into Lesotho
temporarily and that they were exported from Lesotho again.
concerning the further requirement that the Applicant complained most
about and which appeared to be found to be the gravamen of its
complaint. It was what was to be found in paragraph 10 of the
founding affidavit which read:
"The Respondent agreed with the Applicant that in the event of
(he) being satisfied that the goods being imported were regarded by
customs as being temporary imports under the provision of the Act
then sales tax would be refunded."
it became clear as early as the time contemplated by the Applicant
that Customs would have to be satisfied that the goods were temporary
imports. In order for the First Respondent to form an opinion and
make its own decision he would have made investigations from the
Customs department. It had been already decided that the goods were
not exempted. It may have not been clear what the reason put forward
by the Customs people were.
said that the First Respondent failed to exercise her decision
judicially and it in fact erred. The difficulty that one immediately
came across was that in paragraph 8 of the founding affidavit me
Applicant said that it had already been ruled by the Respondent that
the Applicant should pay sales tax on all the goods imported into
Lesotho. Applicant did not tell the Court why it had then agreed to
pay and what the reasons were. It could be the reasons were different
from these that it later complained of or it could be the
circumstances were different. One of the things that could have
influenced the Applicant would be that:
returns could show that all the goods imported were thereafter
exported, it would end up not paying tax as imports are exempted from
paragraph 8.3 of Mampho Hlaoli's affidavit).
that the Applicant remained to prove that the goods were in fact
exported then it would claim.
from the mouth of the Applicant itself that there was agreement
between the parties that in event of the Customs Department being
satisfied that the goods being imported were temporary imports under
the provision of the Act, then sales tax would be refunded. The
Applicant seeks to base its reasons for review on "this
agreement alone. It sought to narrow the compass by saying it should
remain the only issue for consideration. By so saying it sought that
any other reasons for refusal to refund the Applicant should be
disregarded. This 1 found difficult to accept.
"E" to which the Court was referred to which was dated the
15th July 1996. It was addressed to the Applicant. It was a detailed
response to a letter from the Applicant dated the 29th April 1996
(the discovered document). It was that annexure "E" which
provided a basis for which the decision of the Respondent was being
attacked. Annexure "E" contains many things other than
whether there was in fact re-exporting of the goods out of Lesotho or
not. The latter had been what I considered to be the main reason or
defence to the Applicant's claim. It said goods are accepted if the
vendor was registered with the Commissioner of Sales lax. In that
regard it was recorded that the Applicant was not registered. The
background to annexure "E" can only be fairly understood by
culling the very
aspects from the discovered document.
the discovered documents which was written by Mrs Mia Pereira records
that the Customs office had registered an exception to the
Applicant's goods being "regarded as temporary imports."
Applicant approached the Sales Tax Department due to the fact that it
did not resell its products in Lesotho and would therefore have no
way of recovery to 10% sales tax paid.
two meetings were held with Mr. Zwane and Lephcane and again with Mrs
Hlaoli at Maseru section of the Respondent's department. The
Applicant was urged to have its company registered for sales tax
(certificate) purposes. It said it duly submitted all documentation
after getting a trading licence from the Department of Trade and
Industry. The Applicant was issued with a brokers licence because it
had been alleged that one Monaheng had said that:
"There are no import/export licence facilities in Lesotho due to
the fact that we only import/export, we have no need for wholesalers
was told that it could not register for sales tax with a broker's
licence. An application was submitted to Mr. Mapetla of the
Respondent. He said he would review the application with Mr. Jesse
and would respond later. It became clear that as at the time the
Applicant had not been issued with a certificate.
the discovered document it was slated that in February 1996 a second
and third loads of goods were imported into Lesotho by Applicant.
Sales tax was paid therefor. Mr. Mapetla was fortunately met along
with Mr. Jesse and Mr. Donegan at Maseru Hotel. 1 noted that:
"All these agreed to a meeting in which we could sit down with
all the documentation and a decision would then be taken."
not clear whether a meeting was held following this other than the
one of 22nd March 1996. It appeared before the said "chance"
meeting the Applicant had already told that:
"we could not register for sales tax with a broker is licence."
that the Applicant was still without a sales tax certificate.
to the discovered document on the 22nd March 1996 there was yet
another meeting at the office of the Respondent. Then there seems to
have been a verbal agreement, that the goods were in fact exported to
Malawi, with all proper documents then sales tax would be refunded.
Thereafter a letter exempting Applicants from payment of sales tax in
the future would be issued.
Applicant said it was able on the 24th May 1996 in the presence of
Customs officials from the State Warehouse to hand over all
documentation proving exports to Malawi with all the copies of
receipts for sales tax paid to the Respondent's office. Still the
Applicants were advised to pay sales lax on the two loads that were
currently in Lesotho and to return to the Sales Tax Department for
the compliance with set procedures.
to Mia Pereira of the Applicant Company still on the 21st May 1996 no
refund had been made, despite the presentation of the documentation,
brought to the attention of the Respondent. This was despite proof
that the goods were exported to Malawi. Mr. Mapetla of the
Respondent's office was reminded
agreement of the previous meeting. His response was that according to
new legislation, there was no ways that a refund could be claimed.
situation became that no refund was ever made because there was no
legislation for one exceptional case. I noted (see annexure "E")
chat Applicant had not been registered for sales tax purposes because
the explanation of the Respondent was that contrary to section 11(2)
of the Sales Tax Act. 1982 (as amended) the Applicant was found to
have no fixed place of abode or business and had not established a
presence in Lesotho and ensure that:
"the business is actually being conducted in Lesotho as this
does not appear to be the case as at present."
Respondent therefore persisted in refusing to have Applicant refunded
tax that it had already paid.
I did not
understand why the case before me had to be complicated at all. It
was a simple case. I may have had to decide whether as a matter of
fact the Applicant's goods were exported. I may have had to make a
"Applicant has not taken the Court into its confidence by
telling the Court whether the goods were actually imported into
Lesotho to decide whether the goods fall under the category of
exception as provided under Section 7 of the Act and the schedule
latter aspect being the nature of or type of goods allegedly
imported. It was submitted that there was nothing in the papers to
assist the Court in coming to a proper decision in the matter. I may
have even decided then in favour of the
on a balance of probabilities. But I did not have to decide that.
itself may have unfairly caused confusion and misled the Applicant.
It is because a continuous thread is to be found where the Respondent
said there was to be proof that the goods were in fact exported.
may have actually been misled by the Respondents in seeking for
decision of Customs whether the goods were temporary imports under
the provisions of the Customs Act 1982 "or whether tax paid
would be refunded." It may perhaps be that the decision of
Customs was not necessary where the only necessary and relevant
discretion was that of the Respondent. I have already said that on
strict interpretation it may be that the Sales Tax Act does not in
respect of imported goods provide for a payment of tax and a refund.
It was submitted that the goods were exports having been temporarily
brought into Lesotho.
clearly been shown the gravamen of the Applicant's complaint was that
there had been no fairness in the exercise of its discretion by the
Respondent in having relied on the advice of the Customs Department
whose grounds were not divulged. That furthermore it was not
disclosed why and in which way the document handed to the Respondents
to prove that there had been exports alleged did not satisfy the
Respondent. This argument was a mere red herring . It was intended to
downplay the real issue which was whether the Applicant qualified in
terms of Section 11 of the Sales Tax Act as a registered vendor with
the Respondent for exemption from paying tax upon goods entering
been common cause that the Applicant was not registered and certified
for exemption as such, it was not therefore exempted. It was not
entitled to a refund. It would have been arguable if the Applicant
had questioned the
upon which it was not registered as an exempted vendor or why it was
not granted an exporters licence.
application was dismissed with costs.
Applicant : Mr. Buys - Du Preez, Liebetrau & Co
Respondents : Mr. Putsoane - Office of the Attorney General
African Law (AfricanLII)
Ghana Law (GhaLII)
Laws of South Africa (Legislation)
Lesotho Law (LesLII)
Liberian Law (LiberLII)
Malawian Law (MalawiLII)
Namibian Law (NamibLII)
Nigerian Law (NigeriaLII)
Sierra Leone Law (SierraLII)
South African Law (SAFLII)
Seychelles Law (SeyLII)
Swaziland Law (SwaziLII)
Tanzania Law (TanzLII)
Ugandan Law (ULII)
Zambian Law (ZamLII)
Zimbabwean Law (ZimLII)
Commonwealth Countries' Law
LII of India
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