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Quickway Property Services Limited v Uganda Revenue Authority (Application No. TAT 105 of 2021) 2023 UGTAT 2 (2023-02-21)

Tribunal · [2023] UGTAT 2 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging VAT and Income Tax assessments before the Tax Appeals Tribunal
Decision
Application dismissed — applicant liable to pay assessed tax of UGX 453,286,169

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal dismissed the application for input tax credit. The applicant failed to prove on a balance of probabilities that the claimed purchases were genuine. The receipts lacked serial numbers, could not be independently verified, and the payments could not be traced in the supplier's books. The decision to disallow the input tax credit and issue additional assessments was lawful.

Outcome

Application dismissed — applicant liable to pay assessed tax of UGX 453,286,169

Facts

Quickway Property Services Limited, a construction company, was awarded a contract by Capital Shoppers Limited to construct residential and commercial buildings in Kampala. The applicant purchased construction materials from Hard Steel Limited and filed VAT returns for March to May 2020 claiming input tax credit of UGX 1,482,111,300, and income tax returns for July 2019 to June 2020. Uganda Revenue Authority disallowed the input tax credit and issued additional assessments totalling UGX 453,286,169, alleging the purchases had not been made and the claim was part of a VAT invoice trading scheme. The applicant claimed all payments were made in cash and provided invoices, delivery notes, receipts, purchase and sales ledgers. URA's investigation found the payments could not be traced in Hard Steel Limited's cash books or bank statements, the receipts lacked serial numbers, and there were discrepancies in supplier addresses between invoices and receipts.

Issues

  1. Whether the applicant is liable to pay the tax assessed.
  2. What remedies are available to the parties.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Tax Law — Value Added Tax — Input Tax Credit — Requirements for Entitlement
For a taxable person to be entitled to input tax credit under the Value Added Tax Act, three elements must be proved: first, that the applicant is a taxable person; second, that taxable supplies have been made to the applicant during the tax period; and third, that the taxable supplies were for use in the business of the applicant.
Tax Law — Value Added Tax — Input Tax Credit — Proof of Payment
The proof of payment required to support a claim for input tax credit must be credible and capable of independent verification. Payment receipts that are not sequentially numbered lack the most basic feature of a cash receipting system and are not credible evidence of payment.
Tax Law — Value Added Tax — Tax Invoices — Compliance with Statutory Requirements
Tax invoices must comply with the Fourth Schedule to the Value Added Tax Act, which requires invoices to bear individualized serial numbers. Invoices that do not bear serial numbers do not satisfy the statutory requirements for claiming input tax credit.
Evidence — Burden of Proof — Tax Appeals
In tax appeals, the burden of proof is on the applicant to prove on a balance of probabilities that the input tax credit claimed was due and payable. Where the applicant fails to discharge this burden, the application will be dismissed.
Administrative Law — Judicial Review — Standard of Review
A decision of an administrative body can only be set aside if it is illegal, grossly unreasonable, or made with procedural impropriety. Where none of these grounds are established, the administrative decision will stand.

Legislation cited (12)

Cases cited (2)

  • Enviroserv (U) Limited v Uganda Revenue Authority (Application No. 24 of 2017)
  • Target Well Uganda Limited v Uganda Revenue Authority (HCCS No. 751 of 2015)

Full judgment

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

Quickway Property Services Limited v Uganda Revenue Authority (Application No. TAT 105 of 2021) 2023 UGTAT 2 (2023-02-21)
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.