The Supreme Court of Appeal (“SCA”) has delivered a recent and important reminder that the South African Revenue Service (“SARS”) statutory powers, although extensive, are not without limits and remain subject to the principles of legality, judicial oversight, and constitutional safeguards.
Richan Schwellnus
Team Lead: Tax Controversy & International Tax
In CSARS v Bullion Star (Pty) Ltd (894/2024) [2026] ZASCA 76, the SCA dismissed SARS’ appeal against a prior High Court order setting aside a search and seizure warrant issued under section 60 of the Tax Administration Act 28 of 2011 (“TAA”). The warrant had been obtained by SARS on an ex parte basis and executed against Bullion Star, a licensed gold refinery, as well as at the residences of its director and an employee.
The Background
SARS investigated Bullion Star in relation to its Value-Added Tax (“VAT”) affairs for the period of November 2020 to February 2022. SARS believed that Bullion Star was dealing in Krugerrand gold coins, rather than second-hand gold, which had VAT consequences. SARS’ concern was that Bullion Star may have incorrectly claimed input VAT of approximately R13.9 million.
To advance its investigation, SARS obtained a search and seizure warrant under section 60 of the TAA. However, the purpose stated in SARS’ own founding affidavit was narrow: SARS sought access to original raw data relating to photographs, WhatsApp messages, emails and electronic communications, to verify certain information. In contrast, the warrant granted went far wider than this stated purpose.
The Legal Requirement for a SARS Warrant
Section 60(1) of the TAA permits a judge or magistrate to issue a warrant, only if satisfied that there are reasonable grounds to believe that:
The SCA confirmed that the issuing of such a warrant involves a judicial discretion. Because search and seizure powers are invasive, the court must consider not only SARS’ investigative interests, but also the taxpayer’s constitutional right to privacy under section 14 of the Constitution.
The Problem: The Warrant Was Overbroad
SARS ultimately conceded that the warrant was overbroad, which the SCA accepted. The Court explained that a warrant is overbroad in cases where it authorises acts beyond what the statute permits, or where it fails to define the scope of the search with sufficient particularity. Importantly, the Court confirmed that an overbroad warrant is unlawful. This clarification was fatal for SARS. The warrant did not align with the limited purpose SARS had advanced in its own application, as SARS had asked for a warrant to verify specific raw electronic data, but the warrant authorised a broader search and seizure operation.
SARS Could Not Fix the Warrant After the Fact
SARS argued that the High Court should not have set the warrant aside entirely, but should instead have narrowed or severed the overbroad portions.
The SCA rejected this, as SARS had initially defended the warrant in its entirety and only sought a limited variation after Bullion Star had already argued its case in the reconsideration application. The Court found that SARS had not made out a proper case for the warrant to be amended after execution.
The SCA further held that SARS’ reliance on section 66(4) of the TAA was misplaced. Although that section allows a court, in appropriate circumstances, to authorise SARS to retain original or copied relevant material in the interests of justice, SARS had not properly laid the foundation for such relief.
The Consent Order Did Not Save SARS
A key issue was whether SARS could still use the seized material because of an earlier consent order between the parties. The SCA held that SARS relied too heavily on that order, and found that the consent order was interim and linked to the pending reconsideration application. Once the warrant was found unlawful, the seized material could not be used by SARS.
The Court was clear: the fact that SARS had already seen or possessed the documents did not assist it. SARS would not be permitted to use the documents obtained under the unlawful warrant.
Why This Judgment Matters
This judgment is significant for taxpayers and SARS alike. For taxpayers, it confirms that SARS’ powers of search and seizure are not unlimited. A taxpayer faced with an ex parte warrant is not without remedy, as under Rule 6(12)(c) of the Uniform Rules of Court, the taxpayer may seek reconsideration of an order granted in its absence.
For SARS, the judgment is a warning that warrants must be carefully drafted, factually justified, and proportionate. SARS must stand or fall by the case it makes in its founding papers, and a warrant cannot be broader than the purpose relied upon to obtain it.
The Takeaway
The SCA’s message is simple: tax enforcement must remain lawful. Whilst SARS has powerful tools under the TAA, including audit powers, information-gathering powers, and search and seizure powers, the use of these tools must comply strictly with statutory provisions and the Constitution.
An overbroad warrant is not a technical defect, but strikes at the legality of the search itself. For taxpayers, the judgment reinforces the importance of obtaining specialist tax legal advice immediately where SARS executes a search and seizure warrant. Timing is critical, and the correct procedural response can determine whether unlawfully obtained material may be challenged, sealed, returned, or excluded from use.
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