In a unanimous judgment with sweeping consequences for South Africa’s fuel industry and cross-border trade, the Constitutional Court has dismissed Tholo Energy Services CC’s last-ditch appeal, confirming that the company is not entitled to a R4.25 million fuel levy refund and entrenching the South African Revenue Service’s (SARS) uncompromising, literal approach to fuel export rules.
The ruling, delivered on January 16, 2026, brings to an end a nine-year legal battle and decisively vindicates every adverse finding made against Tholo by SARS, the High Court and the Supreme Court of Appeal (SCA).
Thabiso Moroahae is the sole member of Tholo Energy Services CC, registered in South Africa, and a shareholder and sole director of Tholo Energy Services (Pty) Ltd, a Lesotho-incorporated company that supplies fuel primarily to the construction and mining sectors.
At the centre of the dispute were refund claims totalling R4,254,924.80 for fuel levies allegedly paid on 25 consignments of diesel exported to Lesotho between April and June 2016.
Court papers show that approximately 40,000 litres per consignment were collected on behalf of Tholo from depots of the Petroleum Oil and Gas Corporation of South Africa (PetroSA). PetroSA operates a licensed customs and excise manufacturing warehouse (VM), a refinery, in Mossel Bay.
However, it was common cause that none of the fuel was obtained from that licensed warehouse. Instead, 22 consignments were uplifted from PetroSA’s depot in Bloemfontein, two from its depot in Tzaneen, and one from TotalEnergies’ depot in Alrode, Alberton, none of which are licensed manufacturing warehouses.
It was also common cause that at the time of export, Tholo did not hold an export permit, and that PetroSA had no VM at any of the depots from which the fuel was collected.
Tholo submitted its refund claims on March 17, 2017. SARS requested further information, audited the claims and issued a letter of intent on June 27, 2017, informing the company that it had failed to comply with the law and did not qualify for a refund.
SARS specifically demanded proof that the fuel was obtained from the stocks of a licensed VM, proof of actual quantities exported, and evidence of a valid export permit.
In response, Tholo claimed that duty had been paid at source and that export permits were not required for exports to BLNS countries (Botswana, Lesotho, Namibia and Eswatini). SARS rejected the explanation and disallowed the refund claims on July 20, 2017.
An internal administrative appeal, oral representations and further inspections followed, but on December 10, 2018, the appeal committee dismissed the matter, finding that the fuel had not been obtained from a licensed VM.
Courts close ranks against Tholo
Tholo then turned to the High Court in Pretoria, which dismissed its case in November 2022. The SCA upheld that decision in August 2024, ordering Tholo to pay costs, including the costs of two counsel.
“The appeal is dismissed with costs, including the costs of two counsel,” read the SCA judgment.
Undeterred, Tholo approached the Constitutional Court.
That bid has now failed.
“I am therefore satisfied that the Supreme Court of Appeal correctly applied the law to the facts and reached the correct conclusion,” the Constitutional Court held.
“Tholo’s failure to satisfy any one of the statutory requirements is sufficient to defeat its refund claim. Its failure to satisfy multiple requirements makes the case clear-cut.”
Leave to appeal was granted, but the appeal itself was dismissed.
This time, there is no higher court to run to.
SARS allowed to expand its defence
One of Tholo’s final arguments was procedural. It accused SARS of unfairly ambushing it by expanding the grounds for refusing the refund during litigation, an alleged violation of the right to just administrative action.
Initially, SARS relied on two grounds: the fuel was not collected from PetroSA’s licensed warehouse, and Tholo had no export permit. Later, SARS added further grounds, including that Tholo could not prove the fuel’s origin, that it was not transported by licensed removers, and that the fuel was paid for by Tholo Lesotho, not Tholo Energy Services CC.
The Constitutional Court rejected the complaint outright.
Writing for a unanimous bench, Justice Mbuyiseli Mathopo held that a tariff appeal under the Customs and Excise Act is a “wide appeal,” a full rehearing in which SARS may rely on any lawful basis supporting the same determination.
“The determination, the refusal of the refund, remained constant throughout the proceedings,” Mathopo wrote. “The grounds advanced were reasons supporting that determination, not the determination itself.”
Strict reading of the law prevails
On the substance, the Court delivered a ruling with major implications for the fuel and logistics sectors.
Tholo argued that it was sufficient to buy fuel from any depot owned by a licensed manufacturer, even if that depot was not itself a licensed manufacturing warehouse.
The Court flatly rejected this interpretation.
Fuel, it held, must be obtained directly from the physical premises of the licensed warehouse itself. Anything else defeats the traceability and control mechanisms built into the customs system.
“This interpretation ensures that refunds are only granted where fuel can be traced through controlled environments, reducing the risk of fraud and revenue leakage,” the Court said, stressing that refunds are a privilege, not a right, and require strict compliance.
In doing so, the Constitutional Court expressly shut the door on a more flexible approach previously adopted in Tunica Trading (2021), which now stands effectively overruled.
“Common practice” defence collapses
Tholo’s claim that export permits were not required for BLNS exports also failed.
The Court found no evidence of a uniform or binding “practice generally prevailing” that excused exporters from compliance. Diesel is a restricted product under the regulations. A permit was required. Tholo did not have one.
That failure alone, the Court held, was fatal.
The judgment confirms, in full, the conclusions already reached by every court that heard the matter: Tholo Energy Services’ refund claims were fundamentally non-compliant from the start.
The High Court exposed the failures. The SCA crushed the appeal with costs. The Constitutional Court has now extinguished the matter entirely, endorsing SARS at every turn and setting a precedent that will reverberate across South Africa’s fuel and cross-border trade sectors for years to come.
Summary
- Thabiso Moroahae is the sole member of Tholo Energy Services CC, registered in South Africa, and a shareholder and sole director of Tholo Energy Services (Pty) Ltd, a Lesotho-incorporated company that supplies fuel primarily to the construction and mining sectors.
- It was also common cause that at the time of export, Tholo did not hold an export permit, and that PetroSA had no VM at any of the depots from which the fuel was collected.
- SARS requested further information, audited the claims and issued a letter of intent on June 27, 2017, informing the company that it had failed to comply with the law and did not qualify for a refund.
Authored by our expert team of writers and editors, with thorough research.
