The Supreme Court of Appeal has set aside a SARS R35 million demand against customs clearing agent QI Logistics, finding that the tax authority’s decision-making process did not meet the required legal standard.
The case centred on fuel shipments imported from Mozambique in 2018 and transported through South Africa to Zimbabwe and Botswana. SARS had held QI Logistics liable for duties, levies and an amount in lieu of forfeiture.
SCA Sets Aside SARS R35 Million Demand
The Supreme Court of Appeal delivered judgment on 3 July 2026 in QI Logistics (Pty) Ltd v The Commissioner for SARS. The court upheld QI Logistics’ appeal and replaced the Gauteng High Court’s earlier order.
The SCA reviewed and set aside SARS’s decisions to hold QI Logistics liable for import duties and to demand an amount in lieu of forfeiture. It also sent the matter back to SARS for reconsideration and ordered SARS to pay costs.
According to the judgment, SARS’s letter of demand required QI Logistics to pay R35,080,475.35. The amount related to imported fuel that QI Logistics helped clear for transit through South Africa.
QI Logistics argued that it had submitted export and acquittal documents to SARS. However, SARS said the company had not provided enough proof that the fuel had been duly exported.
Court Finds Flaws in SARS’s Process
The SCA found that the case turned on whether SARS’s decisions met the standards of rationality under the Promotion of Administrative Justice Act or the principle of legality.
The court said SARS needed to show that it had properly considered the material submitted by QI Logistics. It also had to explain why the documents failed to prove that the fuel had left South Africa as declared.
The judgment found that SARS’s reasons were too limited. The court said a bare statement about missing arrival and exit markings did not show that SARS had rationally assessed the documents before making the SARS R35 million demand.
The SCA also drew a distinction between liability for duties and SARS’s separate discretion to demand an amount in lieu of forfeiture. That forfeiture-related decision required SARS to consider relevant factors before making a demand.
Legal Experts Say Ruling Reinforces Fair Process
BusinessTech reported that Shepstone & Wylie partners Quintus van der Merwe and Taryn Hunkin said the judgment reinforced the principle that administrative decisions must be lawful, reasonable and procedurally fair.
The ruling does not end the dispute completely. Instead, the SCA sent the matter back to SARS, meaning the revenue service must reconsider the issue through a proper process.
For clearing agents, the case highlights the importance of keeping export proof and acquittal records. For SARS, it confirms that tax and customs demands must rest on clear reasons and a rational assessment of evidence.