QUEST Motor Manufacturing Company has won a High Court challenge against the Zimbabwe Revenue Authority (Zimra) which reversed an agreement for the company to import vehicle parts duty-free.
Zimra had allowed Quest Motors to import vehicles parts to assemble Toyota single and twin-cab vehicles on suspended duty.
The matter spilled to the Supreme Court, which ordered a retrial of the dispute, which the vehicle assembly company won before Justice Munamato Mutevedzi.
According to Quest Motors, Zimra reversed its decision to grant it suspended duty on vehicle parts when the parts were already in a Zimra warehouse.
Quest Motors cited Zimra, head customs technical and risk management Customs & Excise Division Innocent Chikuni and Forbes Border Post regional manager Chabveka Marekera as respondents.
The company appealed against a High Court judgment which had dismissed its appeal against Zimra’s decision to reverse the suspension of duty.
It then approached the Supreme Court for an order that the matter be heard in the High Court before a different judge.
The Supreme Court consisting of Justices Chinembiri Bhunu, George Chiweshe and Joseph Musakwa noted an anomaly in the High Court judgment saying it did not competently uphold the preliminary points raised by the respondents and ordered a retrial before Justice Mutevedzi.
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Justice Mutevedzi upheld Quest Motors’ appeal saying Zimra’s decision was the antithesis of openness, frankness, honesty and the absence of all vices.
Justice Mutevedzi said a tax authority that did not specify the degree of knock-down which it expects taxpayers to comply with acts arbitrarily which is contrary to the foundations of the tax regime of Zimbabwe.
“Taxpayers are entitled to know exactly what taxes they must pay and how those taxes are computed.
“Its decisions become completely irrational if it gives prior approval for an assembler to import kits as SKDs [semi-knocked downs], but on entry turns around to demand full import duty,” he said.
“At the hearings before its officers, the applicant pointed out to the first respondent the absence of legislation and or guidelines to support its unilateral decision that the applicant had imported completely built vehicles.
“Yet by its own admission, the only reason it said so was that the engines were attached to the chassis and could be started.”
According to the court papers, Quest Motors on September 28, 2022 applied to Zimra to import and assemble Toyota Hilux Revo double-cab in SKD kit form.
In that application, Quest Motors enclosed the specifications of the motor vehicles and the SKD packaging list showing the component parts which were to be imported.
The application was a success and the authority to import on the basis of suspended duty was granted by Zimra through Marekera’s letter dated September 29, 2022.
Again on October 4, 2022, Quest Motors applied to Zimra to import and assemble Toyota Hilux Revo double-cab in SKD kit form.
The application was successful and Quest Motors was granted authority to import the model vehicles in SKD form and under suspended duty.
Quest Motors imported the SKD kits in terms of the specifications and packaging lists approved by Zimra and Marekera.
On November 4, 2022, Quest Motors invited Zimra’s supervisor container depot at the Forbes Boarder Post to its bonded warehouse to conduct an inspection of the containers.
After completion of the inspection Zimra made a decision to decline the suspension of duty under Statutory Instrument 45 of 2020.
Resultantly, Zimra demanded the payment of full import duty under the bills of entry.
