IN THE SUPREME COURT OF UGANDA
THE COMMISSIONER GENERAL
MEERA INVESTMENTS LTD:::::::::::::::::::::::::::: RESPONDENT
(Appeal arising from the judgment and decisions of the Court of Appeal (,Mukasa- Kikonyogo,D.C.J., Okello, Twinomujuni, JJ.A) in Civil Appeal No.03. of 2007, dated 15th of October , 2007)
JUDGMENT OF KANYEIHAMBA, J.S.C
(2) Alternatively, or secondly that no suit can be maintained against the Commissioner General and
(3) That the matter in issue is a dispute with inbuilt internal and appeal procedures laid out that exclude original jurisdiction of the High Court.
2. The learned judge erred in law and fact in not holding (that) the proper defendant to the suit should have been Uganda Revenue Authority and further, that statutory notice of intention to sue should have been served before the suit was instituted.
3. The learned judge erred in law and fact in rejecting the submission that the matter was prematurely before court, the plaintiff not having objected to the assessment and obtained a decision thereon.
In light of the nature of the subject matter of the dispute between the parties, I consider it necessary and useful to set out the salient features of this case. The appellant who was the third respondent in Miscellaneous Application No.218 of 2006 arising out of the Original Suit No.189 of 2006, is the Commissioner General and Chief Executive Officer of the Uganda Revenue Authority. The Uganda Revenue Authority is a statutory corporation. The first and second respondents in that same application were the Attorney General and the Uganda Investment Authority, respectively.
The Uganda Investment Authority, under statutory powers derived from the Investment code, statute No.1 of 1991, issued a certificate of incentives to the respondent exempting some of its properties from tax liability. Later, the Commissioner General through an officer under her decided to impose and demanded tax against some of the properties of the respondent which it claimed were included in those exempted from taxation by the Investment Authority. The respondent objected to the demands of that tax and proceeded to sue the appellant for actions the respondent deemed to be contrary to and in conflict with the statutory powers and decisions of the Uganda Investment Authority, another statutory corporation. This is how civil suit No.189 of 2006 came to be filed and led to Miscellaneous Application No. 218 of 2006.
2. The Court of Appeal erred in not holding that the proper defendant to the suit should have been the Uganda Revenue Authority and further, that statutory notice of intention to sue should have been served before the suit was instituted.
3. The Court of Appeal erred in not holding that the suit was prematurely before the High Court.
4. The Court of Appeal erred in giving a certificate for two advocates.
On the question of who should have been the proper party to be sued, Dr. Byamugisha emphasized that both in law and fact it was the Uganda Revenue Authority and not its Commissioner General.
In respect of ground 2, Dr. Byamugisha contended that the Uganda Revenue Authority being a statutory corporation with powers to sue and be sued in its name in any civil action against it has the right for the suing party to comply with the requirement for a statutory notice to be served in accordance with the provisions of the Civil Procedure and Limitation (Miscellaneous Provisions) Act, Cap.72. Counsel argued that therefore in so far as that compliance was conspicuously absent, the suit against the Revenue Authority or any officer acting on its behalf including the Commissioner General was defective and incompetent.
On ground 3 of the appeal, Dr. Byamugisha contended that the respondent’s suit had in any event, been filed prematurely. He contended that the law establishing the Uganda Revenue Authority provides an internal mechanism for resolving any dispute arising from the assessment of and demand for tax. Counsel supported his contention on this matter by citing provisions of the Tax Appeal Tribunal Act, (cap.196), which was enacted in compliance with Article 152 (3) of the Constitution. He cited ss .16 (1), (4), (6), (7) and 18 (a) and (b), 19, (3) and (6) 20, 22(2) of the same Act. Consequently, Counsel for the appellant contended that the suit before the High Court was premature since a dispute had to be resolved internally first before a party could invoke the jurisdiction and powers of the court. Dr. Byamugisha concluded on this ground that in effect the suit against the appellant had disclosed no cause of action in light of the statutory authorities he had cited and elaborated upon. Besides, the authorities referred to in this judgment, Dr. Byamugisha also cited the Civil Procedure Rules, (cap.71)1, Mulla’s code of Civil Procedure, (Act V of 1908), and the Seventh Edition of Sir William Wade’s Administration Law, in support of his submissions.
Counsel for the respondent rejected the argument on behalf of the appellant that the original suit in the High Court was filed prematurely. They contended that the proceedings before court now did not arise out of a taxation matter but out of the Commissioner’s decision to challenge or ignore the decision of the Uganda Investment Authority, another statutory body that exempted the respondent from various heads of taxes. Counsel contended that, therefore the dispute between the parties is not about the nature or quantum of taxes which statute empowers the Tax Appeals Tribunal to determine first, but is about whether the Commissioner General can ignore or interfere with the decisions of the Uganda Investment Authority. Consequently, it was the opinion of counsel for the respondent that the matter was properly before court. Counsel contended that the issue was not whether the tax assessment was fair or unfair but whether the Commissioner General of the revenue authority, a statutory body, has the powers to override those of the Uganda Investment Authority, another statutory body. Counsel argued that unlike the Uganda Revenue Authority, the Uganda Investment Authority has no investment tribunal to which an aggrieved investor can appeal before going to court.
Counsel contended that therefore, not only was there a cause of action but the law permitted the respondent to sue the Commissioner General as an officer of the Uganda Revenue Authority. Counsel for the respondent cited a number of authorities and explained their relevancy of some of them to the facts of and laws relevant to the appeal. The authorities cited and seen as applicable included the Constitution of Uganda, the Income Tax Act, cap.340, The Value Added Tax Act, Cap.349, Uganda Revenue Authority statute No.6, the Civil Procedure and Limitation (Miscellaneous Provisions) Act, Cap 72, Giella V Cassman Brown & Co Ltd  E.A, 358, Kanjee Naranjee V. Income Tax Commissioner, P.C. No 47 of 1962 and Civil Appeal No 14 of 2002 (S.C), (Unreported).
In this judgment, I will discuss and resolve consecutively, the grounds as presented in the Memorandum of Appeal and argued by the counsel for the parties.
On ground 1, whether or not the Commissioner General is a party to the proceedings in this case depends on the Courts interpretation and application of the various Acts of Parliament which were cited by the respective counsel for the parties.
Each of the Acts of Parliament included in the list of authorities or discussed in submissions of the parties to this appeal has its own purpose and its provisions are essentially different from those of others. All of them derive their authority from and are subject to the provisions of the Constitution. While the Constitution remains supreme and binding at all times, Acts of Parliament can be modified and directed to govern diverse situations by Parliament but only subject to the constitutional provisions.
In my opinion, this case is about the conflict between the provisions of the Income Tax Act and the Value Added Tax Act and their interpretation and nature of application is a matter for a court of law and not for the parties or a tax tribunal.
However, an analysis of the different Acts of Parliament alluded to earlier in this judgment indicate quite clearly the rationale of their existence and the extent of their applicability. Unless this point is clearly appreciated, there is a likelihood that perceptions of incompatibility and conflicts between them could occur.
Dr. Byamugisha for the appellant, quite rightly in my opinion, refers to the Uganda Revenue Authority Act, Cap.196 as creating a central body for the assessment and collection of specified revenue to administer and enforce the laws relating to such revenue and to provide for related matters.
Learned counsel for the appellant cites, again quite correctly in my opinion, the provisions of Section 2 (2) of the same Act which provides as follows:
In my opinion, it is only in relation to what the law specifically provides for as its purpose and functions that the Uganda Revenue Authority may sue and be sued in its corporate name. In this respect and as a scheduled corporation, it would be entitled to the right of receiving a statutory notice under the Civil Procedure and Limitation (Miscellaneous Provisions Act, Cap 72. To this extent, I would agree with Dr. Byamugisha’s submissions.
However, the rights, powers and obligations prescribed under the Uganda Revenue Authority Act are not exclusive to the Authority. Part IV of the same Act establishes the Office of the Commissioner General, other Offices and Staff. Under Section 10 (1), The Commissioner General is appointed by the Minister responsible on the recommendation of the Board of Directors who work on a part-time basis section 10 (2) of the Act provides that:
2) Tax that has not been paid when it is due and payable may be sued for and recovered in any court of competent jurisdiction by the Commissioner acting in the commissioner’s official name, subject to the general directions of the Attorney General.
3) In any suit under this section, the production of a certificate signed by the Commissioner stating the name and address of the person liable and the amount of tax due and payable by the person shall be sufficient evidence of the amount of tax due and payable by such a person.”
It is thus abundantly clear that the Commissioner General is a competent party to a suit under these Acts. Certainly, if he or she can sue to recover tax, he or she can be sued by a party unhappy with the tax assessments made by the Commissioner General or officers under him or her.
The constitutionality of the original and unlimited jurisdiction of the High Court was emphatically pronounced by the Court of Appeal in M/s Rabo Enterprises (U) Ltd and M/s Elgon Hardware Ltd.v. Commissioner General, Uganda Revenue Authority C.A No. 51 of 2003. where in the lead judgment (Okello, J.A. as he then was) declared that:
There can be no doubt in my opinion, that it is only the Commissioner General who has the responsibility, powers and knowledge about tax matters to assist court and that is fully recognized by section 104 (3) of the Income Tax Act, Section 104(3) that empowers her to sue for taxes due but unpaid.
R. v. Commissioner General of Income Tax, I.E.A.T.C 36
R. v. Commissioners of Income Tax (1889) 22 Q.B.D. 296
Commissioner General of Income Tax.v Kigange Estates Ltd (1968) E.A 464
In my opinion, the purpose of empowering the Commissioner General to assess, demand, collect and sue for any tax not paid is to ensure that Uganda revenues are settled, collected and paid expeditiously. Indeed, the letter written by Jacqueline Kobusingye reads as follows:
The Managing Director
Meera Investments Limited,
RE: TAX AUDIT FOR THE YEARS 1996 TO 2003.
|Tax Head||Principal Tax||Penalty||Total|
Please arrange to pay the outstanding tax liability to avoid accumulation of interest.
COMMISSIONER DOMESTIC TAXES DEPARTMENT
Remit payment at once to avoid accumulation of interest”.
In this particular case, there are two statutory bodies, namely the Commissioner General and the Investment Authority each purporting to have exercised their functions. In my view, it would be unjust for either or both to impose their will without the victim seeking a judicial remedy within reasonable time. Secondly, the requirement of a statutory notice would unreasonably delay the receipt of Uganda revenues from reaching into the Consolidated Fund expeditiously. In my opinion, this would not be in the nation’s interests. In any event, the reading of the statutes applicable show that the law permits the Commissioner General or his or her agent to sue expeditiously for taxes owed. Therefore, it my views that the respondent should also have the corresponding right to sue without hindrances
In my opinion, it would be just and proper that where liability for tax is in issue, the dispute should be disposed of quickly so that the uncertainty is eliminated at once and the country is accorded its rights at the earliest opportunity.
For the reasons I have given, ground 1 and 2 of this appeal ought to fail.
With regard to ground 3 of appeal, the matter is simple and straightforward. Having found that this case was not concerned with the mere assessment, demand and refusal to pay tax but with the interpretation of and relationship between the Uganda Revenue Authority Act and the Uganda Investment Act, the issue of the suit being premature does not arise. I therefore find no merit in this ground which accordingly ought to fail.
Lastly, on ground 4, I agree with the submissions of Dr. Byamuguisha that counsel for the respondent have not shown reasonable grounds for this Court to grant a certificate for two counsel either in this Court or those below. Moreover, in granting the certificate for two counsel, the Court of Appeal gave no reasons whatsoever. Consequently, in my opinion this ground ought to succeed and I would allow it.
All in all, however this appeal substantially fails.
Dated at Mengo this 20th day of January 2008
JUSTICE OF THE SUPREME COURT
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
(CORAM: ODOKI, CJ, TSEKOOKO, MULENGA, KANYEIHAMBA, AND
CIVIL APPEAL NO. 16 OF 2007
MEERA INVESTMENT LTD :::::::::::::::::::::::::::::::::::::::::::::::::::RESPONDENT
JUDGMENT OF ODOKI, CJ
I have had the benefit of reading in draft the Judgment prepared by my learned brother Kanyeihamba JSC, and I agree with him that this appeal should substantively fail. I concur in the orders he has proposed.
As the other members of the court also agree, this appeal is dismissed. There will be orders in the terms proposed by Kanyeihamba, JSC.
Dated at Mengo this 20th day of January 2009.
B J Odoki
THE REPUBLIC OF UGANDA
CIVIL APPEAL NO. 22 OF 2007
COMMISSIONER GENERAL ::::::::::::::::::::::::::::::::::::::::::::::: APPELLANT
MEERA INVESTMENTS LTD ::::::::::::::::::::::::::::::::::::::::::: RESPONDENT
A comment on grounds 1 and 2 which are formulated as follows:
It therefore follows that there is no need to serve a notice of intention to sue before instituting a suit against the Commissioner General.
The two grounds must fail.
Although I agree that ground four must succeed, I would dismiss this appeal.
Delivered at Mengo this 20th day of January 2008.
JUSTICE OF SUPREME COURT.
IN THE SUPREME COURT OF UGANDA
UGANDA REVENUE AUTHORITY ……………………..APPELLANT
MEERA INVESTMENT …………………………………RESPONDENT
[An appeal from the decision of the Court of Appeal at Kampala (Mukasa-Kikonyongo, DCJ, Okello, and Twinomunjuni, J.J.A) dated 15th October 2007 in Civil Appeal No. 3 of 2007]
JUDGMENT OF MULENGA JSC.
DATED at Mengo this 20th day of January 2009.
Justice of Supreme Court
IN THE SUPREME COURT OF UGANDA
(CORAM: Odoki, CJ; Tsekooko, Mulenga, Kanyeihamba and Katureebe, JJ.SC).
B E T W E E N
UGANDA REVENUE AUTHORITY : : : : : APPELLANT
MEERA INVESTMENTS LTD : : : : : : RESPONDENT
JUDGMENT OF KATUREEBE, JSC.
I also agree that the respondent should get of costs here and in the two Courts below for one counsel.
Dated at Mengo this 20th day of January 2008.
Bart M. Katureebe
Justice of the Supreme Court