Act." As a result, the search and seizure authorized by section 74(3) of the Act caused considerable concern among taxpayers. This was a clear invasion of a person's privacy as the Commissioner's powers were heavily weighted against the taxpayer.
What are informational gathering powers?: The Income Tax Act as example
It is therefore of the utmost importance that effective tax collection and enforcement procedures are in place. Privacy means that a person can keep personal information and his affairs secret and out of the public domain.
Information gathering powers - How do they help the Commissioner? SARS (Protecting the Revenue)
It is argued that the government agencies come into direct conflict when they have to investigate a person. It is argued that it is usually better to let the Revenue catch what they are asking for and realize they are barking up the wrong tree than to raise their suspicions, water down the correspondence and possibly end up in an unpleasant situation in court .
Importance of information gathering powers
It is submitted in relation to powers of collection of information generally, the objects of such powers being obviously important in any tax system. Thus, it is further argued that in order to achieve a fair tax calculation, the tax department should in principle process or have access to all information that could affect the tax liability of the taxpayer.
What may be seized
Commissioner's powers of search and seizure
Thus the view was expressed in Taxpayer 181 (a monthly journal devoted to the law, practice and incidence of income tax and other revenue laws) that the section in this form which was offended was section 13 of the Interim Constitution. Thus, it is more plausible to say that preserving the integrity of the courts is a better reason for the exclusionary rule.
The powers of the courts in respect of constitutional issues
The Bill of Rights
All provisions of the Income Tax Act can therefore be challenged in court on the grounds that they are unconstitutional and therefore invalid. Of particular importance in this context are the fundamental rights enshrined in Chapter 2 of the Constitution, read in conjunction with the general limitation provision.
The Right to Privacy
The right to Just Administrative Action
Procedurally fair administrative action
To give effect to the right to procedurally fair administrative action, an administrator must give a person;. In order to give effect to the right to procedurally fair administration may, at its own discretion, also allow a person to-.
The general Limitation Provision
The very functioning of the state and its ability to implement social and economic policies is dependent on an effective tax system. As regards the relationship between the limitation and its purpose, it is thus argued that any limitation of the right to privacy is only minimal and its purpose is obviously one of great societal importance.
Post constitutional amendments to information gathering powers (the new s74)
Power of search and seizure in terms of s740 of the Act
It is crucial to note that the powers vested in the commissioner in terms of the Act are not mandatory. 34; (6) Any officer who executes a warrant may, in addition to the information, documents or things referred to in the warrant, seize any other information, documents or things which such officer believes on reasonable grounds to provide evidence of the non-compliance with the relevant obligations or the commission of an offense in terms of this Act."
CHAPTER - 3
Constitutional Aspects of search and seizure 3.1 Discretion to allow search and seizure
The Right to Privacy and CompUlsory Disclosure of certain information
Compulsory disclosure of certain information by taxpayers or third parties via, for example, Section 74A of the Income Tax Act can be challenged on the grounds that such compulsory disclosure violates a taxpayer's right to privacy. This conclusion made it unnecessary to consider the limits of the constitutional right to privacy, but the Constitutional Court saw fit to venture some remarks about the scope of this right. The conclusion was therefore inevitable that no threat had been established to the Applicants' right to privacy as protected by Section 13 of the Basic Law.
However, in each individual case, the questions asked and the documents requested must correspond to the scope of the commission's investigation and that investigation must be a matter of public interest.
How the courts approach the information gathering provisions
The search warrant was sought under S29(5) of the Public Prosecutions Act 32 of 1998. On appeal, the court found that the appellant had good cause to return the seized documents. The complainant also states that the investigation was carried out by unauthorized persons in accordance with the order and the documentation was seized.
Therefore, the appellant ruled that he had not shown good grounds for the return of the seized documents within the meaning of the warrant.
Comparative approaches in other Jurisdictions
It is a fundamental principle of the rule of law and a necessary part of a democracy that the citizens of a nation must be protected from unjustified intrusions into privacy and property by the representatives of the state. Otherwise, arbitrary actions by state officials can seriously affect the individual's personal freedom as a fundamental aspect of a free and democratic society. Priw Council in New Zealand Stock Exchange and National Bank of New Zealand v CIR(1991)13 NZTC 8, 147, confirmed the broad scope of the Commissioner's powers to collect information and related those powers to the Commissioner's public duty to correctly assess taxable income . of all taxpayers.
In order to fulfill his duty to assess and collect tax on all chargeable income, the Commissioner must discover the names of taxpayers and the relevant sources and amounts of their chargeable income" (New Zealand Stock Exchange supra at 8.148 under section 17 of the New Zealand Revenue Administration Act 1994 the Commissioner has for example the right to request information about the taxpayer from third parties such as banks).
The American Approach
- Effect of the Fourth Amendment
- Justification for Interference by the Authorities
The United States Supreme Court has ruled that the most effective method of dealing with the misconduct of public officials is to exclude evidence obtained from an unconstitutional search from subsequent trials. The court held that the purpose of the prohibition on unreasonable search and seizure is to protect the reasonable expectation of privacy. In this regard, the court considered the protection of the attorney-client relationship and the privileged interest to be of great importance.
The efforts described above by Canadian, American and European jurisdictions demonstrate that the requirements of the International Covenant on Civil.
Search and Seizure of Computer Data
It is inherent in the operation of the system that the data of one customer is available to the computers of another. If one party's computer system were to be searched, other parties' information could also be searched, even if they were not listed in the order. The constitutional validity of the new provision is questionable because it allows the search and seizure of things without a warrant that would precisely identify those things.
However, the Computer Records Task Force of the National Competition Law Section of the Canadian Bar Association is preparing a .critique of the provisions appearing in the Competition Act.
NATURE OF APPLICATION FOR SEARCH AND SEIZURE (ISSUE OF WARRANT)
- Pro - Forma Warrant in terms of 5740 of IT Act and 5570 of VAT Act
An application for a search warrant under the Criminal Procedure Act, 51 of 1997, to a judge or magistrate presiding over a criminal case (section 21). It is submitted that it must be determined in what capacity the Regional Solicitors can make an application for an order under section 740 of the Income Tax Act, 58 of 1962 (Income Tax Act) or similar provisions in other revenue. actions administered by the Commissioner: SARS. The Commissioner is of the opinion that it is not necessary for the RLPs to be delegated in accordance with section 74, subsection 4, to submit the applications.
Their right to make an application is challenged by any judge, the RLP must argue that the application for a warrant is not a court within the meaning of the relevant provisions.
DISCLOSURE OF FOUNDING AFFIDAVITS
Article 40 of the Act on Promotion of Access to Information provides similar protection. As part of the above-mentioned tasks, I carried out the preliminary control of tax matters:-. He stated that the records could be kept in one or more of the other premises listed in xx.
The following persons will participate in the investigation of the premises from xx above:-.
CHAPTER-6
Pursuant to Section 740 of the Income Tax Act and Section 570 of the Value Added Tax Act, the Commissioner may apply for search and seizure without surrendering it. The Respondent's officers searched the Applicants' premises and seized a significant amount of material. Section 74D of the Income Tax Act and its equivalent in the VAT Act give any person the opportunity to apply for the relevant tax.
The court found that the plaintiffs had failed to demonstrate good reason for the return of the seized items.
CHAPTER-7
Conclusion
The subjective opinion of the Commissioner is replaced by the objective opinion of a judge after weighing the factors provided to him under oath or solemn declaration. Thus where the person whose articles have been seized has proved guilty or proved that he intended to invade or defraud or that such articles were intended for the commission of the offence, it is argued that few taxpayers will sympathize have, as the fiscus comes to cheat to cheat taxpayers. However, where the Commissioner has made an external application and the judge is satisfied about the merits of the application, a premises can be entered without any notice.
Therefore, in light of the aforementioned changes to the search and seizure provisions, taxpayers should remain vigilant and not hesitate to approach the courts for relief if their privacy rights are violated.
Can section 740 survive the Constitutionality test?
The draconian powers of search and seizure previously contained in section 74(3) have been replaced by section 74D. While the amended article clearly still infringes the right to privacy contained in Article 14 of the Constitution, it is likely to fall within the ambit of the general limitation clause. The amendments are a vast improvement over the previous paragraphs and appear to successfully balance the rights of the Commissioner, as well as the rights of taxpayers and other affected parties. If the amendments are an indication of the level of future amendments that will follow to bring the law into line with the Constitution, then they will go a long way in removing the current resentment that various taxpayers have towards the Commissioner and his enforcement officers cherish.
The changes should therefore be seen as a great victory for taxpayers and in case of infringement of the said rights by tax officials, taxpayers should have the courage to challenge such infringements through available legal means.
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