This comes after Davis, chairperson of the Davis Tax Committee, addressed a conference on tax evasion and illicit financial flows organised by the Alternative Information Development Centre in Cape Town last weekend.
"Sars has noted with grave disbelief at the unprovoked and unwarranted attacks on Sars by Judge Dennis Davis," Sars said in a statement on Friday.
"In his address, Judge Davis unashamedly misled the South African public and purported to undermine public confidence into Sars in a desperate endeavour to pursue a patently false narrative."
Davies was quoted as saying that Sars had no capability of actually dealing with multinational corporation and capital that sought to evade tax, and that the drop in income tax collections was the most obvious red flag.
"The biggest challenge facing South Africa today is an erosion of the integrity of Sars," Davies was quoted saying.
"SARS has no capability of actually dealing with multinational corporation and capital that seeks to evade tax." Sars said it was more perturbed because
Davis was speaking in the conference in his capacity as the chairperson of the Davis Tax Committee.
The revenue services said it had been, and was currently, continuing to capacitate its transfer pricing unit and had an agreement with Organisation for Economic Co-operation and Development (OECD) countries such as United Kingdom for the training, capacity building and skill transfer to employees within this transfer pricing unit.
"The Judge ought to know that the challenges pertaining to transfer pricing affects all tax authorities across the globe and, in particular, the bigger African continent.
"Sars therefore denies that it has no capability to deal with non-compliance by multinational companies. It is disappointing that Judge Davis has publicly misled the South African public, notwithstanding his first-hand knowledge of the aforesaid initiatives."
Sars also said that the relationship between it and Davis had "intolerably and irretrievably broken down" as a result of his statements.
"Sars intends to engage the Minister of Finance urgently with a view that Judge Davis should recuse himself from the specialist tax committee, or that his membership to the committee be terminated."
"Sars is also in the process of seeking a legal opinion on the prospect of lodging a complaint with the Judicial Service Commission with regard to Judge Davis' aforementioned conduct, given Sars' position that it is treacherous and unprecedented for a judge to mislead the public."