Wakilii

Commissioner General URA v Zain International BV (Civil Appeal No. 0011 of 2012)

Court of Appeal · [2014] UGCA 120 · 2014 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Appeal from High Court ruling granting judicial review quashing a tax objection decision
Decision
Appeal dismissed; objection decision quashed by certiorari for procedural impropriety, but appellant retains jurisdiction and power to make a fresh proper tax assessment

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Cited — treatment unverified cited in 2 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Court of Appeal held that judicial review was a competent and proper avenue for the respondent to challenge URA's conduct, since the High Court retains original jurisdiction under Article 139(1) and judicial review controls public bodies acting ultra vires, distinct from the appeal route under section 100 of the Income Tax Act. While the Commissioner General had jurisdiction to assess and require payment of the tax, the appellant acted with procedural impropriety by assessing tax on disposal of shares and later changing the basis to disposal of immovable property in the objection decision without a fresh assessment affording a fresh objection. Certiorari was justified; the appeal was dismissed.

Facts

The respondent, Zain International BV (a Netherlands company), disposed of its shares in Zain Africa BV to Bharti Airtel International on 30 March 2010. Both companies were incorporated and resident in the Netherlands. Zain Africa BV held equity interests in 26 Dutch companies, including Celtel Uganda Holding BV, which owned 99.99% of Celtel Uganda Ltd. The shares of Celtel Uganda Ltd and its Ugandan property were not transferred. On 10 March 2011, the appellant issued a tax assessment on the disposal as one arising from disposal of shares. The respondent objected, noting no Ugandan shares or property were transferred. On 11 July 2011, the appellant issued an objection decision recharacterising the transaction as a gain arising from disposal of an interest in immovable property located in Uganda, without making a fresh assessment. The respondent applied to the High Court for judicial review seeking declarations and orders of certiorari and prohibition, which were granted. The appellant appealed.

Issues

  1. Whether the respondent's challenge to the tax assessment and objection decision by way of judicial review was competent and proper, given the alternative remedies under the Income Tax Act and Tax Appeals Tribunal Act.
  2. Whether the procedure followed by the appellant in raising the tax assessment and issuing the objection decision was procedurally improper and unfair so as to justify quashing the assessment.
  3. Whether the appellant Commissioner General had jurisdiction to assess and require the respondent to pay the tax in question.

Orders

  • Grounds 1 and 2 of the appeal fail.
  • Ground 7 of the appeal (remedy of certiorari) succeeds.
  • Appeal dismissed.
  • Each party to bear its own costs of the appeal and of the application in the court below.

Key headnotes

Judicial Review — Tax Disputes — Availability Despite Statutory Appeal Route
Judicial review is available against a statutory tax authority that has acted improperly or ultra vires in reaching its decision, since the High Court's original jurisdiction under Article 139(1) of the Constitution to review administrative action cannot be taken away by the appeal and review remedies provided under the Income Tax Act and Tax Appeals Tribunal Act.
Judicial Review — Distinction from Appeal — Decision Versus Decision-Making Process
Judicial review is concerned not with the merits of a decision but with the manner in which it was made; the court does not consider whether the decision was right, fair or reasonable on its merits, but only whether public powers were exercised in accordance with legality, fairness and rationality.
Judicial Review — Discretion — Exhaustion of Alternative Remedies
Judicial review will not normally be permitted where an adequate alternative appellate or statutory remedy exists, and the discretionary prerogative orders should not be used as a collateral process to attack an appealable decision on its merits.
Administrative Law — Procedural Impropriety — Changing Basis of Decision Without Fresh Process
It is procedurally improper and a breach of the duty to act fairly for a tax authority to assess a taxpayer under one head (disposal of shares) and later change the basis to a different head (disposal of immovable property) in an objection decision without making a fresh assessment that would afford the taxpayer a fresh opportunity to object.
Tax Law — Jurisdiction to Assess — Burden of Proof on Taxpayer
The Commissioner General is vested by Article 152(1) of the Constitution and the Income Tax Act with jurisdiction to make a tax assessment and require payment; once an assessment is made, the burden shifts to the person assessed to prove non-liability, exemption, or contravention of the law.
Judicial Review — Certiorari — No Substitution of Decision
In granting certiorari to quash a decision, the court does not substitute itself for the authority; the legal power to make the decision remains with the authority, which is at liberty to make a fresh decision following the correct procedure consistent with natural justice and fairness.

Legislation cited (28)

  • Judicature Act Cap 13 s.33
  • Judicature Act Cap 13 s.36
  • Judicature Act Cap 13 s.38
  • Judicature Act Cap 13 s.41
  • Judicature Act Cap 13 s.42
  • Judicature (Judicial Review) Rules SI No. 11 of 2009 r.3
  • Judicature (Judicial Review) Rules SI No. 11 of 2009 r.4
  • Judicature (Judicial Review) Rules SI No. 11 of 2009 r.6
  • Judicature (Judicial Review) Rules SI No. 11 of 2009 r.10(4)
  • Civil Procedure Act Cap 71 s.98
  • Civil Procedure Rules SI 71-1 Order 52 r.1
  • Civil Procedure Rules SI 71-1 Order 52 r.3
  • Income Tax Act Cap 340 s.99(1)
  • Income Tax Act Cap 340 s.100
  • Income Tax Act Cap 340 s.4(1)
  • Income Tax Act Cap 340 s.15
  • Income Tax Act Cap 340 s.17(1)
  • Income Tax Act Cap 340 s.17(2)
  • Income Tax Act Cap 340 s.21
  • Income Tax Act Cap 340 s.79
  • Income Tax Act Cap 340 s.88(1)
  • Income Tax Act Cap 340 s.88(5)
  • Income Tax Act Cap 340 s.98(3)
  • Tax Appeals Tribunal Act s.19
  • Uganda Revenue Authority Act Cap 196 s.2
  • Constitution of Uganda Article 139(1)
  • Constitution of Uganda Article 152(1)
  • Constitution of Uganda Article 152(3)

Cases cited (18)

  • Autologic Holdings Plc v Inland Revenue Commissioners [2006] 1 AC 118
  • Argosam Finance Co Ltd v Oxby [1965] Ch 390
  • Re Vandervell's Trusts [1971] AC 912
  • Uganda Revenue Authority v Wanume David Katamirike (Civil Appeal No. 43 of 2010)
  • Niwagaba v Law Development Centre (Civil Application No. 18 of 2006)
  • R v Electricity Commissioners, ex parte London Electricity Joint Committee Co [1924] All ER 161
  • Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374
  • Uganda Projects Implementation and Management Centre v Uganda Revenue Authority (Constitutional Appeal No. 2 of 2009)
  • R v Brighton Justices, ex parte Robinson [1973] 1 WLR 69
  • R v Chief Constable of the Merseyside Police, ex parte Calveley [1986] 1 All ER 257
  • Uganda Inland Port Ltd v Great Lakes Region (CFS) Ltd and Attorney General (Civil Application No. 45 of 2006)
  • Commissioner General of Uganda Revenue Authority v Meera Investments Ltd (Civil Appeal No. 22 of 2007)
  • Micro-Care Ltd v Uganda Insurance Commission (Miscellaneous Application No. 218 of 2009)
  • His Worship Aggrey Bwire v Attorney General (Civil Appeal No. 9 of 2009)
  • Clear Channel Independent (U) Ltd v Public Procurement and Disposal of Public Assets Authority (Miscellaneous Application No. 380 of 2008)
  • Preston v Inland Revenue Commissioners [1985] All ER 327
  • John Jet Tumwebaze v Makerere University Council (Civil Application No. 353 of 2005)
  • Kasibo Joshua v Commissioner of Customs, URA (Miscellaneous Application No. 844 of 2007)
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