Automated Summary
Key Facts
The case involves YARA Tanzania Limited challenging the Taxing Officer's ruling on the taxation of legal costs in Taxation Cause No. 111 of 2018. The Applicant argued that the Taxing Officer incorrectly applied Item 1(d) of the 11th Schedule to the Advocate Remuneration Orders, 2015, taxing instruction fees at TZS 5,000,000, instead of Item 1(m)(ii) for applications at TZS 1,000,000. The Respondent contended the petition was not an application and that the Taxing Officer exercised proper discretion. The Court ruled that the petition fell under Item 1(m)(ii) as an application, set aside the Taxing Officer's decision, and ordered instruction fees to be taxed at TZS 1,000,000. The second ground of challenge, regarding the 1/6th rule under Order 48, was dismissed as out of place.
Tax Type
Legal costs taxation under Advocates Remuneration Orders (instruction fees for court applications/petitions)
Issues
- Whether the Taxing Officer exceeded the 1/6th rule threshold in Order 48 of the Advocates Remuneration Orders by disallowing more than one-sixth of the claimed costs, and if the entire bill should have been disallowed as a result.
- Whether the Taxing Officer correctly applied Item 1(d) of the 11th Schedule to the Advocates Remuneration Orders instead of Item 1(m)(ii) for a petition under the Arbitration Act, and if the petition should be classified as an 'application' warranting a lower instruction fee of TZS 1,000,000.
Tax Years
2018
Holdings
- The court dismissed the second ground of the application as it was not properly raised and was considered out of place.
- The court held that the Taxing Officer erred in applying Item 1(d) instead of Item 1(m)(ii) of the 11th Schedule for the petition, resulting in the instruction fee being set at TZS 1,000,000.00.
Remedies
- The court awarded the instruction fees at TZS 1,000,000 under Item 1(m)(ii) of the 11th Schedule to the Advocates Remuneration Orders, 2015, instead of the previously taxed amount of TZS 5,000,000.
- The court reversed the Taxing Officer's ruling dated 7th June 2022 in Taxation Cause No. 111 of 2018, which taxed the instruction fees at TZS 5,000,000 instead of the applicable Item 1(m)(ii) of the 11th Schedule to the Advocates Remuneration Orders, 2015.
Tax Issue Category
Other
Legal Principles
- The court exercised judicial review to assess whether the Taxing Officer acted within her discretion or applied the law incorrectly, referencing principles of proportionality and Wednesbury review to determine if the officer's decision was 'injudicious' or 'wrongly applied'.
- The court applied the Literal Rule in interpreting the definition of 'applications' within Item 1(m)(ii) of the 11th Schedule to the Advocate Remuneration Orders, 2015, determining whether a petition qualifies as an application for cost taxation purposes.
- The court addressed the 1/6th rule under Order 48 of the Advocates Remuneration Orders, 2015, evaluating whether exceeding the prescribed cost thresholds warranted disallowing the entire bill of costs.
Disputed Tax Amount
5000000.00
Precedent Name
- Premchand Raichand Ltd vs. Quarry Services of Eat Africa Ltd and Others
- Dr. Livingstone Memorial and Bagamoyo Zoological Society Park Ltd vs. Dodsal Hydrocarbons and Power (T) PVT Ltd
- Hamis Athumanid Hamis and 2 Others vs. Macfarlane and Another
- Tanzania Marketing Board vs. Cogecot Cotton Company SA
- Uganda vs. Banco Arabe Espaniol
- The Regional Commissioner of Shinyanga vs. Bernard Sizasiza
Cited Statute
- Advocates Remuneration Orders, 2015 (GN. No. 264 of 2015)
- Arbitration Act, Cap.15 R.E 2002
- Civil Procedure Code, Cap.33 R.E 2019
Judge Name
Deo John Nangela
Passage Text
- In view of the above, it is my findings that, the applicable scale to be applied should have been Item No. 1 (m) (ii) of the 11th Schedule to the 2015, G.N. No. 264 of 2015. With such a finding, I hereby quash and set aside the decision of the Taxing Officer and, in substitute, thereof, the amount payable as instruction fees under the Bill of Costs should be TZS 1,000,000.00 as per the Item No. 1 (m) (ii) of the 11th Schedule to the Advocates Remuneration Order 2015, G.N. No. 264 of 2015.
- In the context of law, and as it was stated in the case of Tanzania Marketing Board (supra), a petition is a form of an application in writing made to a Court for judicial determination of matters that lies within its jurisdiction.
- the bone of contention remains the first ground regarding whether the Taxing Officer was to apply Item 1(m) (ii) of the 11th Schedule to the Advocates Remuneration Orders, GN. No. 264 of 2015 or Item 1(d).