The Commissioner General Uganda Revenue Authority v Meera Investments Ltd (Civil Appeal 22 of 2007) [2009] UGSC 3 (20 January 2009)

Key Facts

Tax Type

Issues

• Whether a statutory notice of intention to sue was required to be served before instituting court proceedings against the Commissioner General of the Uganda Revenue Authority.
• Whether the Commissioner General of the Uganda Revenue Authority was the proper party to be sued in the original civil suit, or whether the proper defendant should have been the Uganda Revenue Authority itself as a statutory corporation.
• Whether the respondent's suit was prematurely filed before the High Court, given that internal dispute resolution mechanisms under the Tax Appeal Tribunal Act should have been exhausted first.
• Whether the Court of Appeal erred in granting a certificate for two advocates to represent the respondent, and whether reasonable grounds were shown for such certification.

Tax Years

• 1997
• 1998
• 2001
• 2000
• 2003
• 1999
• 2002
• 1996

Holdings

Remedies

• The Supreme Court of Uganda dismissed the appeal filed by the Commissioner General of Uganda Revenue Authority against Meera Investments Ltd, awarding ¾ costs to the respondent and ordering the remittal of the original suit No.185 of 2005 to the High Court for disposal on merit.
• The original suit No.185 of 2005 was ordered to be remitted to the High Court for expeditious disposal on merit after the appeal was dismissed.
• The respondent was awarded three quarters of costs in the Supreme Court and the two courts below, and the original suit No.185 of 2005 was remitted to the High Court to be disposed of expeditiously on merit.

Tax Issue Category

Legal Principles

• The judgment affirms the Constitution's supremacy over Acts of Parliament regarding the High Court's unlimited original jurisdiction. An Act of Parliament cannot oust this jurisdiction except by constitutional amendment.
• The Court allowed the appeal on the fourth ground, awarding the respondent ¾ costs for one counsel as the lower court failed to justify the certificate for two advocates.

Precedent Name

• M/s Rabo Enterprises (U) Ltd and M/s Elgon Hardware Ltd.v. Commissioner General, Uganda Revenue Authority C.A No. 51 of 2003
• Commissioner of Income Tax, v. Godinho (Maria R.S.) (U) (E.A) 977
• Commissioner of Income Tax, v. Bell (T.M.) (C.A.), (E.A)224
• Commissioner General of Income Tax v Kigange Estates Ltd (1968) E.A 464

Cited Statute

• Tax Appeal Tribunal Act, Cap.196
• Civil Procedure and Limitation (Miscellaneous Provisions) Act, Cap.72
• Uganda Revenue Authority Act, Cap.196
• Value Added Tax Act, Cap.349
• Investment Code, Statute No.1 of 1991
• Income Tax Act, Cap.340
• Constitution of Uganda, Article 152(3)
• Constitution of Uganda, Article 139(1)

Judge Name

• Odoki, Chief Justice
• Katureebe, Justice of the Supreme Court
• Mulenga, Justice of the Supreme Court
• Kanyeihamba, Justice of the Supreme Court
• Tsekooko, Justice of the Supreme Court

Passage Text

• "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: 'RE: TAX AUDIT FOR THE YEARS 1996 TO 2003. Following the Audit exercise conducted on your company for the period 1996 to 2003, below is the position as per documentation availed to the Audit team: 1. The Uganda Revenue Authority stand on the following issues remains as per our letter of 15th November 2005. Please arrange to pay the outstanding tax liability to avoid accumulation of interest. Yours faithfully, Jacqueline Kobusingye COMMISSIONER DOMESTIC TAXES DEPARTMENT Remit payment at once to avoid accumulation of interest.' In my opinion, it appears not to be rational and fair that the Commissioner General can proceed with haste to assess, demand and sue for taxes from an individual or a corporation, but when the latter deny liability and wish to resist the imposed tax by speedily going to court, the Commissioner General not only ignores their defence but also attempts to hide behind the shield of statutory notice to gain ample time which the tax payer does not have to shelter behind."
• "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. Section 104 of the Income Tax Act provides: '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.' 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."
• "The High Court shall, subject to provisions of this Constitution, have unlimited original jurisdiction in all matters and such appellate and other jurisdictions as may be conferred on it by this Constitution or other law. This provision remains superior and mandatory until altered or modified by that other law which, in my opinion, can only be an Act made by Parliament or a constitutional amendment by the same authority. 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."