Wakilii

Depo Limited v Uganda Revenue Authority [2026] UGTAT 2

Tribunal · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging customs demand following rejection of declared customs value and application of fallback valuation method
Decision
Application allowed; impugned assessment set aside; refund of excess taxes ordered

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the rejection of the declared transaction value was unlawful where the importer provided verifiable documentary evidence of the price actually paid and adequately explained timing discrepancies arising from commercial arrangements, and the customs authority failed to demonstrate that the declared price was influenced by prohibited considerations or that the explanations were false. Held further that the application of the fallback valuation method was unlawful where the customs authority did not demonstrate exhaustion of the preceding valuation methods or disclose the basis for the database-derived value. Assessment set aside and refund ordered.

Outcome

Application allowed; impugned assessment set aside; refund of excess taxes ordered

Facts

The Applicant, a company importing building materials, declared stone-coated steel roofing tiles from China under the transaction value method. The Respondent's Customs Enforcement seized the consignment alleging discrepancies between invoices and telegraphic transfer records—specifically that two invoices were dated several months after remittances were made. The Applicant explained that the discrepancies resulted from advance payments and commercial arrangements under a continuing supply contract with a credit limit of USD 200,000, and that the supplier's invoice numbering system ran across multiple customer accounts. The Respondent rejected the declared transaction value and applied a fallback valuation of USD 1.75 per kilogram derived from a Customs Valuation Database, resulting in a top-up assessment of Shs. 31,804,124. The Applicant objected and paid under protest to secure release of the goods, which were not released, prompting this application.

Issues

  1. Whether the Respondent lawfully rejected the transaction value declared by the Applicant.
  2. Whether the Respondent lawfully applied the fallback method and the USD 1.75/kg valuation.
  3. What remedies are available to the parties?

Orders

  • The Respondent's revaluation of the Applicant's goods using a fallback/database rate of USD 1.75/kg and the resultant top-up assessment are set aside.
  • Any excess taxes paid by the Applicant pursuant to the impugned assessment shall be refunded in accordance with the law.
  • Costs are awarded to the Applicant.

Rules and key headnotes

Customs Valuation — Transaction Value Method — Rejection — Burden of Proof
Once an importer produces verifiable and coherent documentary evidence demonstrating the price actually paid or payable for imported goods, the evidential burden shifts to the customs authority to show why that evidence does not satisfactorily establish the transaction value; transaction value cannot be displaced merely because customs remains unconvinced, absent evidence that the price is not genuine.
Customs Valuation — Transaction Value Method — Rejection — Evidential Basis
The rejection of a declared transaction value must be grounded in demonstrable reasons supported by objective evidence; where a customs authority raises doubts based on timing discrepancies and invoice serialisation anomalies, but the importer provides documentary explanations consistent with commercial practice (including a signed supply contract permitting advance payments), and the authority does not controvert the explanations or demonstrate that the declared price was influenced by prohibited considerations, the rejection is not lawful.
Customs Valuation — Sequential Application of Methods — Fallback Method
The Fourth Schedule to the East African Community Customs Management Act prescribes six valuation methods to be applied in strict sequential order; the fallback method is a method of last resort applicable only when all preceding methods have been considered and found inapplicable; a customs authority must demonstrate method-by-method why each preceding method could not be applied before resorting to fallback.
Customs Valuation — Database Values and Reference Pricing — Legal Status
A database price, reference price, or benchmark rate is not itself a valuation method recognised under the Fourth Schedule to the East African Community Customs Management Act; such prices may serve as informational tools within the application of a recognised method (most commonly within the fallback method) but cannot lawfully replace the structured valuation exercise required by law.
Customs Valuation — Fallback Method — Transparency and Disclosure
Where a customs authority relies on a database or reference price under the fallback method, lawful application requires disclosure of at least the nature of the comparable transactions relied upon (identical or similar goods, period, origin), the adjustments made (or reasons why none were necessary), and why that data is appropriate to the particular import under review; absent such disclosure, an importer is deprived of a meaningful opportunity to object and the Tribunal is deprived of the ability to review whether the valuation accords with law.
Procedural Fairness — Duty to Give Reasons — Customs Valuation
Customs valuation decisions directly affect proprietary and commercial rights; the valuation framework, read together with procedural fairness principles and the duty to give reasons under the East African Community Customs Management Act, requires that an importer be informed not merely of the outcome but of the method and reasoning that led to that outcome.
Customs Valuation — Remedies — Unlawful Assessment
Where the transaction value has been unlawfully rejected and the fallback valuation improperly applied, the resultant assessment cannot stand; the appropriate remedy is to set aside the impugned assessment and direct recomputation in accordance with lawful valuation principles, with refund of sums paid under protest.

Legislation cited (19)

  • East African Community Customs Management Act 2004 s.122(1)
  • East African Community Customs Management Act 2004 s.122(4)
  • East African Community Customs Management Act 2004 s.223
  • East African Community Customs Management Act 2004 s.229(4)
  • East African Community Customs Management Act 2004 Fourth Schedule para.1
  • East African Community Customs Management Act 2004 Fourth Schedule para.2(1)
  • East African Community Customs Management Act 2004 Fourth Schedule para.6
  • East African Community Customs Management Act 2004 Fourth Schedule para.8(3)
  • East African Community Customs Management Act 2004 Fourth Schedule para.9
  • WTO Customs Valuation Agreement Article 1
  • WTO Customs Valuation Agreement Article 7
  • WTO Customs Valuation Agreement Article 8
  • WTO Customs Valuation Agreement Article 17
  • Tax Appeals Tribunal Act s.19
  • Tax Appeals Tribunal Act s.21(6)
  • Tax Appeals Tribunal Act s.22(3)
  • Evidence Act s.101
  • Civil Procedure Act s.27
  • Civil Procedure Act s.27(1)

Cases cited (6)

  • Uganda Revenue Authority v Testimony Motors Ltd (Civil Appeal No. 33 of 2014)
  • Uganda Revenue Authority v Agaba Henry (Civil Appeal No. 32 of 2021)
  • Kuku Foods Uganda Ltd v Uganda Revenue Authority (TAT Application No. 71 of 2023)
  • Williamson Diamonds Ltd VS. Commissioner General 4 TLR 197
  • Uganda v Gurindwa and 5 Others (HCT-00-AC-0070 of 2012)
  • Safe Gears v Uganda Revenue Authority (TAT Application No. 82 of 2024)

Full judgment

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Depo Limited v Uganda Revenue Authority 2026 UGTAT 2 (13 February 2026)
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.