Small scale gasoline distributor battling to get gasoline levy refund

The full bench of the excessive court docket, Western Cape Division, on April 21 2022, in Tunica Trading 59 v Commissioner, South African Revenue Service (Sars), overturned a excessive court docket judgment handed down on February 23, 2021, awarding prices towards Sars.

However, the eight-year battle isn’t over, and Sars has to rethink the refund software.


Tunica, a licensed small-scale distributor of gasoline, provides gasoline to foreign-going ships. Tunica had bought gasoline from Masana Petroleum Solutions for supply to a foreign-going ship. Masana, 45% held by BP Southern Africa (BPSA), had a preferential provide settlement with BPSA. BPSA equipped the gasoline from its manufacturing warehouse to Masana.

Masana provides small-scale distributors like Tunica “so that BPSA can focus on its core business of supplying large bulk customers”.


Sequence of occasions

Tunica utilized to Sars for a refund of the gasoline levy on November 4 2014.

Sars gave discover on March 5 2015 that it will reject the refund software on the premise that “the fuel had not been purchased from a licensee of a customs and excise manufacturing warehouse”.

Tunica replied with an in depth submission, together with that: Masana caters to smaller clients; BPSA is licensed distributor and is the efficient controller of Masana; Tunica had paid the duties and levies for the gasoline below the Duty at Source system (when it comes to which duties are paid by every oil firm on gasoline on the level at which it leaves their warehouses or refineries; in different phrases, at supply); and that Tunica was entitled to the refund because the gasoline was delivered to a foreign-going ship (exported).

Sars rejected the refund software on April 1 2015, sticking to its assertion that Masana is an middleman and that the gasoline ought to have been bought from the “licensee of a customs and excise manufacturing warehouse”.

Tunica appealed and on September 28 2015 Sars’s Internal Administrative Appeal Committee disallowed Tunica’s attraction.

Nearly 17 months later, on February 17 2017, Sars upheld its September 2015 determination.

Tunica introduced a assessment software below the Promotion of Administrative Justice Act (Paja).

Two additional purposes for refunds, which have been submitted to Sars in October and November 2014, are nonetheless into consideration by Sars.


Counsel for Tunica argued that Tunica had complied with all necessities, and that:

  • Sars’s rejection of Tunica’s refund software was premised on an inaccurate interpretation of Section 64F of the Customs Act and opposite to Sars’s earlier interpretation;
  • Sars’s insistence that the gasoline should be bought straight from the licensee of a customs and excise manufacturing warehouse is an error in legislation and fatally flawed;
  • Sars impermissibly relied on a variety of technical and different necessities associated to the transport of the gasoline and never when it comes to any laws, rule or regulation;
  • Sars’s determination is essentially flawed and unfair, and it had put ahead two totally different causes for refusing the refund software; and
  • That Judge Desai within the excessive court docket judgment delivered on February 23 2021, incorrectly characterised Sars’s February 2017 determination as being not reviewable when it comes to Paja or on the precept of legality, and failed to contemplate Tunica’s software for the assessment.

Counsel for Sars argued that:

  • Tunica ought to have appealed towards the September 2017 determination;
  • Sars’s determination of February 2017 was an “internal decision” and isn’t reviewable, both when it comes to Paja or on the precept of legality;
  • Judge Desai accurately determined the matter on the premise that it’s a tariff attraction; and
  • Tunica’s declare “failed to comply with the relevant statutory provisions of the Customs Act”.


The court docket needed to resolve which determination by Sars must be appealed towards – the September 2015 or February 2017 determination.

The court docket famous that in correspondence dated April 8 2016, Sars had “invited Tunica to clarify certain issues before the Commissioner makes a ‘final decision’”, and that: “To suggest that Tunica should have ignored the above correspondence and reviewed or appealed the September 2015 decision, is simply untenable …”

But that if Sars had anticipated Tunica “to provide documentation and submissions for no apparent purpose to an unauthorized official that cannot make any decision on the refund application … [such] a proposition is unsustainable as it would mean that Sars deliberately misled Tunica which would be reprehensible”.

On Sars’s argument that the November 2017 determination was made by a Sars official who was not authorised to make that call, the Constitutional Court – in MEC for Health, Eastern Cape and Another v Kirland Investments t/a Eye & Lazer Institute – had held “that even where a decision has been taken without authority, it constitutes administrative action which stands until set aside”.

Read: Sars is exhibiting its enamel

The court docket additionally discovered that Sars had contradicted itself in its April 8 2016 letter, because it said that the “final response” to the September 2015 determination had not been taken by the commissioner.

The court docket concluded that the February 2017 determination is the “operative decision”, and that Tunica’s software when it comes to Paja had been introduced inside the 180-day interval. Therefore “Tunica’s application for the review and setting aside of the September 2015 and February 2017 must as a result be considered afresh”.


The court docket discovered that the commissioner “clearly committed an error of law” in refusing the refund software, and that his determination “is reviewable and needs to be set aside”.

  • The Customs Act “requires that the fuel must have been obtained from the stocks of a licensee of a customs and excise manufacturing warehouse and not only purchased directly from such a licensee”;
  • Sars additionally did not bear in mind “that the fuel had been obtained from the stocks of BPSA, via Masana”; and
  • Sars couldn’t help its determination; for instance, there was no document of any conferences or minutes.

The discovering by Judge Desai that the “September 2015 decision was a tariff determination was flawed”.

The February 2017 determination is clearly a call when it comes to the Customs Act and constitutes administrative motion, and is reviewable.

The ship to which gasoline was equipped “would of necessity be returning to its registered port and would clearly be ‘foreign going’”.

“Tunica provided extensive documents in respect of the delivery of the fuel and it is not clear what additional proof was required.”

Tunica’s attraction was upheld with prices, together with the prices of two counsel.

The court docket declared Sars’s choices taken in February 2017 and September 2015 to refuse the refund of excise responsibility and gasoline levy paid invalid, and referred the choice again to Sars. Sars has 30 days to use its thoughts.

A detailed studying of the judgment offers one the impression that Sars was decided to not pay the refund, stored on shifting the goalposts, and requested an increasing number of documentation from Tunica with out ever documenting its personal decision-making course of.

Tunica has now been out of pocket for eight years.

Read: Sars versus taxpayers

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