Deputy SA Revenue Service (Sars) commissioner Ivan Pillay's suspension must be lifted with immediate effect, the Labour Court in Johannesburg ordered on Thursday.

The suspension of the applicant is unlawful on the basis that constitutes a breach of his contract of employment," Judge Annelie Basson said.

"[Sars] is directed to uplift the applicant's suspension with immediate effect."

She ordered that Pillay return to work on the next working day following the date of the order.

Sars was also ordered to pay costs.

On December 5, Sars commissioner Tom Moyane announced the suspension of Pillay and strategic planning and risk group executive, Peter Richer.

This followed the appointment by Pillay of a panel to investigate allegations reported in the media about a special projects unit and its alleged illegal activities at Sars.

Sars chief operations officer Barry Hore had also resigned.

On Wednesday, Pillay and Richer approached the Labour Court to have their suspensions overturned.

Richer reached a settlement with Sars and his suspension was withdrawn on Wednesday.

The court made a draft order confirming this.