Wakilii

AON (U) Ltd v Uganda Revenue Authority (HCT-00-CC-MC 66 of 2009)

High Court · [2012] UGCOMMC 73 · 2012 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by Notice of Motion for judicial review seeking declaration of entitlement to interest on refunded monies following successful challenge to VAT assessment in earlier judicial review proceedings
Decision
Application allowed with declaration of statutory entitlement to interest on refunded tax

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that Section 44(1) of the Value Added Tax Act Cap 349 confers a statutory entitlement to interest on tax refunds ordered by the court. The provision is clear and mandatory, requiring the Commissioner to pay interest at 2% per month compounded. Although the section does not specify the period for which interest runs, reading it in pari materia with Section 113(4) of the Income Tax Act, interest is payable from the date the tax was collected until the last day of the month in which the refund is made. The court declared the applicant entitled to interest from 19 November 2008.

Outcome

Application allowed with declaration of statutory entitlement to interest on refunded tax

Facts

Uganda Revenue Authority assessed AON (U) Ltd for Value Added Tax totalling Ushs 4,339,272,566. On 19 November 2008, URA served an agency notice on the applicant's bankers, Barclays Bank (U) Ltd, which remitted Ushs 1,824,594,349 to URA. The applicant successfully challenged the assessment by judicial review in HCCS No. 4 of 2008, where the court found that insurance brokerage services are exempt supplies under the VAT Act and quashed the assessment. Following that decision, URA refunded the sum of Ushs 1,824,594,349. The applicant then claimed interest on the refunded amount at 2% per month compounded, which URA refused. The applicant brought this application seeking a declaration of entitlement to interest and an order for payment.

Issues

  1. Whether the applicant is entitled to claim interest on the sum of Ushs 1,824,594,349/= refunded by the respondent following the court's decision in HCCS No. 4 of 2008.
  2. What is the proper interpretation of Section 44(1) of the Value Added Tax Act Cap 349 with respect to interest on refunds ordered by the court.
  3. From what date does interest under Section 44(1) of the VAT Act commence to run.

Orders

  • Declaration that the respondent authority pay interest to the applicant at the rate of 2% per annum compounded from 19th November 2008 until the last day of the month on which the Commissioner URA makes the refund.
  • Application succeeds.
  • Costs awarded to the applicant.

Rules and key headnotes

Tax Law — Value Added Tax — Interest on Refunds — Statutory Entitlement
Where Section 44(1) of the Value Added Tax Act requires the Commissioner General to pay interest at 2% per month compounded on tax to be refunded as a result of a decision of the High Court, the entitlement to interest is statutory and does not require a separate court order awarding interest.
Statutory Interpretation — Plain Meaning Rule — Clear and Unambiguous Language
Where the language of a statute is plain and unambiguous, the words of the statute should be given their ordinary and natural meaning without need for further interpretation or reference to external aids.
Statutory Interpretation — Section Headings — Limited Interpretative Value
Headings to sections of statutes are no more than a guide to the contents of the sections that follow and cannot override the clear and unambiguous words of the statute itself.
Statutory Interpretation — Statutes In Pari Materia — Use as Interpretative Aid
Other statutes in pari materia may be used as an aid to the interpretation of a statute, particularly where the statute under interpretation contains a gap or ambiguity and the other statute addresses the same subject matter.
Tax Law — Interest on Refunds — Commencement Date — Gap Filling by Court
Where Section 44(1) of the VAT Act is silent on the period for which interest on a refund is payable, the court may fill the gap by reference to Section 113(4) of the Income Tax Act (in pari materia), and hold that interest runs from the date the taxpayer paid the tax refunded until the last day of the month in which the refund is made, in order to give effect to Parliament's intention to compensate the taxpayer for deprivation of use of money.

Legislation cited (12)

Cases cited (11)

  • AON Uganda Ltd v Uganda Revenue Authority (HCCS No. 4 of 2008)
  • Pepper (Inspector of Taxes) v Hart [1993] 1 All ER 42
  • Canadian Northern Railway Co v The King (1922) 64 SCR 264
  • Nicholls and Robinson v Cumming (1877) 1 SCR 395
  • Lwanga v Centenary Rural Development Bank [1999] 1 EA 175
  • Riches v Westminster Bank [1947] AC 390
  • Chilcott v Inland Revenue Commissioners (1982) STC 1
  • Inland Revenue Commissioner & Ors v Ross Carlton Bank [1989] 1 KB 64
  • Sussex Peerage (1844) 8 ER 1034
  • DT Dobie & Co (U) Ltd v Customs & Excise [1970] EA 504
  • Seaford Court Estates Ltd v Asher [1949] 2 KB 481

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

AON (U) Ltd v Uganda Revenue Authority (HCT-00-CC-MC 66 of 2009) [2012] UGCommC 73 (28 June 2012)
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.