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ABC Capital Bank and 30 Others v Attorney General and Another (Constitutional Petition No. 14 of 2018)

Constitutional Court · [2023] UGCC 18 · 2023 Petition Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Constitutional petition under article 137 of the Constitution challenging the constitutionality of statutory provisions and administrative notices.
Decision
Petition allowed in part: the URA notices were declared unconstitutional, null and void, while sections 41 and 42 of the Tax Procedures Code Act 2014 were upheld as constitutional.

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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

The petitioners challenged sections 41 and 42 of the Tax Procedures Code Act 2014 and notices requiring banks to disclose all customer account details. The Court held that the right to a fair hearing under article 28 applies to proceedings before an independent court or tribunal, not to the Commissioner's tax investigations, so the impugned provisions did not violate articles 28 or 44(c). Sections 41 and 42 were not themselves unconstitutional, being valid where exercised with probable cause, but must be applied consistently with the right to privacy under article 27. The blanket notices, issued without any investigation or probable cause against account holders, violated article 27(2). The petition was allowed in part.

Facts

The petitioners are 30 licensed financial institutions and the Uganda Bankers' Association. In March 2018 the Commissioner General of the Uganda Revenue Authority, purportedly acting under section 42 of the Tax Procedures Code Act 2014, issued notices to the banks requiring them to furnish details of all customer bank accounts held over the two-year period 1 January 2016 to 31 December 2017. The required information included account names, numbers, signatories, taxpayer identification numbers, total credits and debits, current balances and contact details. Clarifications later specified the format and extended the submission deadline. The notices applied indiscriminately to every account holder, whether or not a taxpayer, and were not preceded by any investigation into, or probable cause concerning, any particular account holder. The Commissioner subsequently withdrew the notices, but the petitioners maintained that the constitutional questions remained live, contending the provisions and notices breached the rights to privacy and to a fair hearing.

Issues

  1. Whether sections 41(7)(a) and 42(4)(a) of the Tax Procedures Code Act 2014, to the extent they purport to nullify any law relating to privilege (including the privilege against self-incrimination and legal professional privilege), are inconsistent with the right to a fair hearing under articles 28 and 44(c) of the Constitution.
  2. Whether sections 41 and 42 of the Tax Procedures Code Act 2014 are inconsistent with and contravene article 27(2) of the Constitution read together with articles 2, 20 and 43(2)(c).
  3. Whether the notice issued by the Commissioner General of the Uganda Revenue Authority is inconsistent with and contravenes article 27(2) of the Constitution read together with article 43(2)(c).
  4. What remedies are available to the parties.

Orders

  • Declaration that the notice impairs the right to privacy of all bank account holders in Uganda enshrined in article 27(2) of the Constitution in a manner that far exceeds what is necessary to accomplish tax collection and is beyond what is acceptable and demonstrably justifiable in a free and democratic society.
  • The notices issued by the second respondent are declared unconstitutional, null and void.
  • The petition is allowed in part.
  • Costs of the petition awarded to the petitioners as against the second respondent only.
  • The first respondent shall bear its own costs.

Key headnotes

Constitutional Law — Interpretation of the Constitution — Reading the Constitution as an integral whole
A constitution must be construed firstly on the basis of its own language to ascertain the natural and ordinary meaning of its words, read in the context of its other provisions, and the whole instrument must be read in harmony so that each provision is given effect without one destroying another.
Human Rights — Right to a Fair Hearing — Scope of article 28 confined to courts and tribunals
The right to a fair hearing under article 28 of the Constitution, including the principles it incorporates, applies to proceedings before an independent and impartial court or tribunal established by law, and does not extend to administrative tax investigations conducted by the Commissioner, who is not such a court or tribunal.
Tax Law — Commissioner's Investigative Powers — Privilege and self-incrimination
Sections 41(7)(a) and 42(4)(a) of the Tax Procedures Code Act 2014, which provide that the sections have effect despite any law relating to privilege, do not contravene the right to a fair hearing or article 44(c), because the privilege against self-incrimination and legal professional privilege protected under article 28 are engaged only in proceedings before a court or tribunal and not in the Commissioner's tax investigations.
Human Rights — Right to Privacy — Lawful versus unlawful search under article 27
Article 27(1) of the Constitution prohibits only unlawful searches and entries; a search or entry authorised by statute is not unlawful per se, but article 27(2) forbids arbitrary interference with privacy, so statutory powers of search must be exercised with safeguards against arbitrary interference and not without lawful authority.
Tax Law — Access to Premises and Records — Requirement of probable cause
Sections 41 and 42 of the Tax Procedures Code Act 2014 are not unconstitutional where exercised on probable cause in a genuine investigation of suspected tax evasion against a specified individual; the Commissioner must exercise the powers consistently with the right to privacy in article 27 and not as a blanket investigation.
Human Rights — Right to Privacy — Indiscriminate disclosure demands
A blanket notice requiring disclosure of the details of every bank account of every account holder, issued without any ongoing investigation or probable cause concerning any individual, is an indiscriminate fishing exercise that violates the right to privacy under article 27(2) and is beyond what is acceptable and demonstrably justifiable in a free and democratic society.
Statutory Interpretation — General Words Overriding Fundamental Rights
General words in a statute, although literally capable of overriding fundamental human rights, are construed as not having been intended to do so unless that intent is expressly stated or appears by necessary implication.

Legislation cited (15)

  • Tax Procedures Code Act 2014 s.41
  • Tax Procedures Code Act 2014 s.41(7)(a)
  • Tax Procedures Code Act 2014 s.42
  • Tax Procedures Code Act 2014 s.42(4)(a)
  • Constitution of Uganda 1995 art.2
  • Constitution of Uganda 1995 art.20
  • Constitution of Uganda 1995 art.27(2)
  • Constitution of Uganda 1995 art.28
  • Constitution of Uganda 1995 art.42
  • Constitution of Uganda 1995 art.43(2)(c)
  • Constitution of Uganda 1995 art.44(c)
  • Constitution of Uganda 1995 art.137
  • Anti-Money Laundering Act 2013 s.14
  • Uganda Revenue Authority Act
  • Anticorruption Act 2019

Cases cited (26)

  • Ismail Serugo v Kampala City Council and another (Constitutional Appeal No. 2 of 1998)
  • Charles Onyango Obbo and another v Attorney General (Constitutional Appeal No. 2 of 2002)
  • Attorney General v Salvatori Abuki (Constitutional Appeal No. 1 of 1998)
  • P.K. Semogerere and Zachary Olum v Attorney General (Constitutional Appeal No. 1 of 2002)
  • National Council for Higher Education v Anifa Kawooya Bangirana (Constitutional Appeal No. 4 of 2011)
  • Nsubuga and another v Uganda (Criminal Appeal No. 223 of 2021)
  • Dr Robert Ayisi v Kenya Revenue Authority (Petition No. 412 of 2016) [2018] eKLR
  • Okiya Omtatah Okoiti v Attorney General and another [2020] eKLR
  • Balabel and another v Air India [1988] 2 All ER 246
  • R v Derby Magistrates' Court, ex parte B [1996] AC 487
  • R v Secretary of State for the Home Department, ex parte Simms [2000] 2 AC 115
  • Thint (Pty) Ltd v National Director of Public Prosecutions [2008] ZACC 13
  • R v Lavallee, Rackel & Heintz [2002] 3 SCR 209
  • Tournier v National Provincial and Union Bank of England [1924] 1 KB 461
  • Reserve Bank of India vs Jayantilal N. Mistry
  • Bernstein v Bester NO (CCT 23/95)
  • Investigating Directorate: Serious Economic Offences v Hyundai Motor Distributors (Pty) Ltd (CCT 1/00)
  • Mistry v Interim National Medical and Dental Council of South Africa (CCT 13/97)
  • Minister of Home Affairs v Fisher [1979] 2 All ER 21
  • McDonald v United States 335 US 451 (1948)
  • Johnson v United States 333 US 10 (1948)
  • R v Fearon [2014] 3 SCR 621
  • R v Reeves [2018] 3 SCR 531
  • R v Big M Drug Mart Ltd [1985] 1 SCR 295
  • AM & S Europe Ltd v Commission of the European Communities (Case 155/79) [1983] QB 878
  • Stradling v Morgan (1560) 1 Plowd 199
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.