Wakilii

Birungyi Barata and Associates v Fresh Cuts Limited (Application No TAT 24 of 2021)

Tribunal · [2021] UGTAT 5 · 2021 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from taxation ruling by the Registrar on an advocates-client bill of costs
Decision
Appeal allowed with costs; instruction fees varied upward to UGX 67,307,717; awards for items 22 and 25 set aside

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that the Registrar erred in computing instruction fees by failing to properly assess the value of the subject matter at UGX 3,104,385,865, which should attract instruction fees of UGX 67,307,717 under the Sixth Schedule. The Tribunal declined to award fees for reconciliation of purchases (item 22) as this work was either covered by the instruction fees already awarded or fell outside the scope of contentious legal work. The Tribunal declined to award fees for recovery of the 30% deposit (item 25) as this was not part of the application filed and any related work was covered by the instruction fees. The Tribunal held that VAT was not properly claimed in the bill of costs but could be recovered via e-invoice outside the bill. The appeal was allowed with costs.

Outcome

Appeal allowed with costs; instruction fees varied upward to UGX 67,307,717; awards for items 22 and 25 set aside

Facts

The appellant law firm appealed a taxation ruling by the Registrar on an advocates-client bill of costs arising from representation of the respondent in a tax dispute with Uganda Revenue Authority. The respondent had applied for a withholding tax refund of UGX 548,923,472 but was instead assessed additional tax of UGX 3,104,385,865. The appellant objected and the matter was partially resolved by consent. The Registrar awarded instruction fees of UGX 10,978,469 and UGX 38,019,311 for items 22 and 25. The appellant challenged these awards as manifestly low, arguing the Registrar failed to apply the Sixth Schedule properly and did not consider the correct value of the subject matter. The appellant also sought VAT on the taxed items. The respondent conceded the Registrar erred on instruction fees but disputed the value of the subject matter and argued items 22 and 25 were covered by instruction fees or not properly instructed.

Issues

  1. Whether the Registrar erred in computing instruction fees by failing to properly assess the value of the subject matter.
  2. Whether the Registrar erroneously awarded fees for item 22 (reconciliation of purchases) when the amended bill of costs was not properly lodged or consented to.
  3. Whether the Registrar erred in not awarding fees for item 25 (claim for 30% deposit recovery).
  4. Whether the appellant was entitled to Value Added Tax on items 1, 22 and 25.

Orders

  • Appeal allowed with costs.
  • Instruction fees awarded by the Registrar on item 1 varied to UGX 67,307,717.
  • Award of UGX 38,019,311 on items 22 and 25 set aside.

Rules and key headnotes

Taxation of Costs — Instruction Fees — Determination of Value of Subject Matter
Instruction fees under the Sixth Schedule of the Advocates (Remuneration and Taxation of Costs) Regulations are calculated based on the value of the subject matter, which may be determined from the pleadings, settlement, valuation or judgment. Where a taxpayer challenges an additional tax assessment, the value of the subject matter is the amount of the disputed assessment.
Taxation of Costs — Amendment of Bill of Costs — Regulation 34
Under Regulation 34 of the Advocates (Remuneration and Taxation of Costs) Amendment Regulations, no addition or alteration may be made to a bill of costs after it has been lodged for taxation except by consent of the parties or by permission or direction of the court or taxing officer. A bill of costs that does not bear a registry stamp cannot be verified as properly lodged.
Taxation of Costs — Scope of Instruction Fees — Work Covered by Sixth Schedule
Instruction fees awarded under the Sixth Schedule cover all work necessarily and properly done in connection with the case. Where work such as reconciliation of accounts arises from the same instructions to oppose an assessment, it is covered by the instruction fees already awarded and cannot be claimed separately unless it involves fresh instructions for work outside the scope of the contentious matter.
Taxation of Costs — Dispute as to Instructions — Role of Taxing Officer
Where there is a dispute as to whether an advocate was instructed to perform certain work, that dispute must first be resolved by the court or tribunal. It does not fall within the ambit of the taxing officer to decide whether instructions were issued; the taxing officer's role is limited to taxing items properly included in the bill of costs.
Value Added Tax — Recovery in Bill of Costs — Requirement to Include in Bill
A registrar cannot tax an item that is not included in the bill of costs. Where an advocate seeks to recover Value Added Tax, it must be included as an item in the bill of costs lodged for taxation. However, an advocate may issue an e-invoice outside the bill of costs to collect VAT as it is a tax due to the state.

Legislation cited (10)

  • Advocates Act s.62(5)
  • Advocates (Taxation of Cost - Appeals and References) Regulations r.3(1)
  • Civil Procedure Act s.98
  • Advocates (Remuneration and Taxation of Costs) Amendment Regulations 2018 Sixth Schedule
  • Advocates (Remuneration and Taxation of Costs) Amendment Regulations r.12
  • Advocates (Remuneration and Taxation of Costs) Amendment Regulations r.34
  • Advocates (Remuneration and Taxation of Costs) Amendment Regulations r.48
  • Advocates (Remuneration and Taxation of Costs) Rules r.47(c)
  • Value Added Tax Act s.6
  • Value Added Tax Act s.18

Cases cited (2)

  • Western Highland Creameries Limited and another v Stanbic Bank Uganda (Appeal No. 10 of 2013)
  • Joseph B. Byamugisha v National Social Security Fund Civil Reference 191

Full judgment

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

Birungyi Barata and Associates v Fresh Cuts Limited (Application No TAT 24 of 2021) 2021 UGTAT 5 (24 June 2021)
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.