Wakilii

Fuelex (U) Ltd v Uganda Revenue Authority (Constitutional Petition No. 3 of 2009)

Constitutional Court · [2020] UGCC 10 · 2020 Section Declared Unconstitutional (Majority) ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Constitutional reference from the Tax Appeals Tribunal on the constitutionality of section 15 of the Tax Appeals Tribunal Act
Decision
Section 15 of the Tax Appeals Tribunal Act declared unconstitutional by majority, to the extent that it requires an objector whose dispute does not concern the amount of tax payable to pay 30% of the assessed tax before being heard; petitioner awarded half the costs of the reference.

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Cited — treatment unverified cited in 1 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

By majority (Kakuru, Egonda-Ntende and Muhanguzi JJCC; Owiny-Dollo DCJ and Obura JA dissenting), the Court held that section 15 of the Tax Appeals Tribunal Act is unconstitutional and inconsistent with the non-derogable right to a fair hearing under Article 44(c), in so far as it compels an objector whose dispute is not about the amount of tax payable to pay 30% of the assessed tax before being heard. Where the objection concerns the amount of tax assessed, the provision remains valid. The majority held the Supreme Court's contrary decision in the Uganda Projects case per incuriam to that extent and therefore not binding. The petitioner was awarded half the costs.

Facts

Fuelex (U) Limited carried on a fuel business. The Uganda Revenue Authority levied UGX 160,525,530 as tax on that business for the period running from June 2005 to September 2006. Fuelex lodged a notice of objection to the assessment with the Tax Appeals Tribunal. The constitutionality of the mandatory payment of 30% of the tax assessed under section 15 of the Tax Appeals Tribunal Act — required pending resolution of the objection — arose before the Tribunal. The Tribunal formed the opinion that a substantial question of law as to the interpretation of the Constitution had arisen and referred the question to the Constitutional Court for determination. At the hearing the parties indicated they wished to abandon the reference, but the Court directed them to proceed because the issue was one of law.

Issues

  1. Whether section 15 of the Tax Appeals Tribunal Act contravenes Articles 21, 44(c) and 126(2)(a) of the Constitution in so far as it requires a taxpayer who has lodged a notice of objection to an assessment to pay, pending final resolution of the objection, 30% of the tax assessed or that part of the tax assessed not in dispute, whichever is greater.
  2. Whether the requirement violates the non-derogable right to a fair hearing and the right of equal access to justice.
  3. Whether the Constitutional Court is bound by the Supreme Court decision in Uganda Projects Implementation and Management Centre v Uganda Revenue Authority, or whether that decision was reached per incuriam.

Orders

  • By majority, section 15 of the Tax Appeals Tribunal Act — in so far as it compels an objector to a tax assessment whose challenge is not with regard to the amount of tax payable to pay the tax authority 30% of the tax assessed — is inconsistent with Article 44 of the Constitution and is unconstitutional.
  • By majority, the petitioner is awarded half of the costs of the reference.

Key headnotes

Fundamental Rights — Right to Fair Hearing — Non-derogable nature under Article 44(c)
The right to a fair hearing under Article 44(c) of the Constitution is non-derogable; no law may abridge, limit or otherwise derogate from it, and it is not subject to the limitations permitted under Article 43.
Tax Appeals Tribunal — Section 15 — 30% pre-payment as precondition to objection
A statutory requirement that an objector pay 30% of the assessed tax before the objection can be heard is unconstitutional where the dispute does not relate to the amount of tax payable, because it denies the objector a fair hearing and impedes access to justice; where the objection concerns the amount of tax assessed, the requirement is valid.
Access to Justice — Right of access to court as a fundamental, non-derogable right
The right of equal access to a court or other adjudicating body for the enforcement of fundamental rights is itself a fundamental and non-derogable right, and the legislature has no power to enact a provision that bars or absolutely impedes such access.
Construction of Statutes — Golden Rule — Avoidance of absurdity
In construing a statute the grammatical and ordinary meaning of the words is to be adhered to unless that leads to absurdity, repugnance or inconsistency, in which case the meaning may be modified to avoid that inconvenience but no further.
Precedent — Stare decisis — Article 132(4) — Per incuriam exception
A decision of the Supreme Court binds the Constitutional Court under Article 132(4), but the Constitutional Court is not bound where the facts before it differ from those on which the Supreme Court decided or where the earlier decision was reached per incuriam.
Separation of Powers — Limits of judicial power to strike down legislation
A court may strike down an Act of Parliament only where it is inconsistent with or contravenes the Constitution, and not merely on the ground that the enactment is unjust; the repeal of unjust legislation is the function of Parliament.

Legislation cited (11)

  • Tax Appeals Tribunal Act s.15
  • Value Added Tax Act s.34C(3)
  • Finance Act 2001
  • Police Act s.24
  • Constitution of Uganda 1995 art.21
  • Constitution of Uganda 1995 art.44(c)
  • Constitution of Uganda 1995 art.126(2)(a)
  • Constitution of Uganda 1995 art.28
  • Constitution of Uganda 1995 art.43
  • Constitution of Uganda 1995 art.50
  • Constitution of Uganda 1995 art.132(4)

Cases cited (20)

  • Uganda Projects Implementation and Management Centre v Uganda Revenue Authority (Constitutional Appeal No. 2 of 2009)
  • Charles Onyango Obbo and Andrew Mwenda v Attorney General (Constitutional Appeal No. 2 of 2002)
  • Foundation for Human Rights Initiative v Attorney General (Constitutional Petition No. 53 of 2011)
  • Commissioner General URA v Zain International BV (Civil Appeal No. 11 of 2012)
  • R v Oakes [1987] LRC 477
  • In Re: President's Reference of the Constitution of Vanuatu and the Broadcasting and Television Bill 1992, [1993] 1 LRC 141
  • In Re: Rivas and the Belize Advisory Council [1993] 3 LRC 261
  • Attorney General vs Ali & Ors [1989] LRC 474
  • Olive Casey Jaundoo vs Attorney General of Guyana [1971] 3 WLR 13
  • Pumbun & Anor vs Attorney General & Anor [1993] 2 LRC 317
  • Howe Yoon Chong vs Chief Assessor and Computer of Property tax [1991] LRC (Const) 243
  • Sunday Lake Iron Co. vs Township of Wakefield 247 U.S. 350 (1918)
  • NTN Pty Ltd. & NBN Ltd. vs The State 1988 9 (Const) LRC 333
  • Duport Steels Ltd & Ors vs Sirs & Ors (1980) 1 WLR 142
  • Warburton vs Loveland (1929) 1 H &B IR 623
  • Grey vs Pearson (1857) 6 HL Cas 61
  • Vacher vs London Society of Compositors [1913] AC 107
  • Nokes vs Doncaster Amalgamated Collieries Ltd (1940) AC 1014
  • Luke vs R.R.C (1963) AC 557
  • Gill vs Donald Humberstone & Co. Ltd, (1963) 1 WLR 929
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.