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Sharad Karia v Uganda Revenue Authority (Civil Appeal No. 83 of 2024)

High Court · [2026] UGCOMMC 384 · 2026 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from a decision of the Tax Appeals Tribunal to the High Court, limited to questions of law under the Tax Appeals Tribunals Act
Decision
Appeal partly allowed; the tribunal's classification of the property as a serviced apartment (outside the VAT exemption) upheld, so the VAT assessment stands

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On appeal on points of law from the Tax Appeals Tribunal, the High Court held that the nature of immovable property is not altered by the manner of its letting, so the tribunal erred in holding that the appellant's letting did not constitute a supply of immovable property (ground one succeeded). However, the court held that a term is not ambiguous merely because it is undefined in the Act, and that by providing furnishings, security, reception, gym, pool and other amenities the appellant made available facilities and performed services beyond a mere landlord-tenant relationship. The property was therefore a serviced apartment under paragraph 1(f)(v) of Schedule 3 and outside the VAT exemption (ground two failed). Appeal partly allowed.

Outcome

Appeal partly allowed; the tribunal's classification of the property as a serviced apartment (outside the VAT exemption) upheld, so the VAT assessment stands

Facts

The appellant conducts a real estate business, owning immovable property at Plot 1A Baker Road, Nakasero, Kampala, which he lets to tenants. On 19 May 2022 the respondent issued the appellant an additional tax assessment of UGX 230,738,527 on the basis that the property was a service apartment whose income attracted Value Added Tax. The appellant objected; on 16 March 2023 the respondent issued an objection decision disallowing the objection and upholding the assessment. In addition to letting the apartments, the appellant provided tenants with furnishings, internet, DSTV, common security, a lift, maintenance, parking, cleaning of common areas, free gym and swimming pool access, an onsite duty manager and 24-hour reception. In some tenancies the appellant paid utilities and tenants paid a service charge inclusive of VAT. The appellant challenged the assessment before the Tax Appeals Tribunal in Application No. 57 of 2023, which found for the respondent, prompting this appeal on points of law.

Issues

  1. Whether the letting of the appellant's property constituted a supply by way of leasing or letting of immovable property under paragraph 1(f) of Schedule 3 to the VAT Act.
  2. Whether the appellant's property is a serviced apartment within the meaning of paragraph 1(f)(v) of Schedule 3 to the VAT Act, and therefore excluded from the VAT exemption for immovable property.

Orders

  • Ground one of the appeal succeeds.
  • Ground two of the appeal fails.
  • The appeal succeeds in part and is dismissed on the second ground of appeal.
  • The appellant is awarded half the costs of the appeal.

Rules and key headnotes

Tax Law — Appeals from the Tax Appeals Tribunal — Confined to questions of law
An appeal from the Tax Appeals Tribunal to the High Court under section 28(2) of the Tax Appeals Tribunals Act lies on questions of law only, and the court's function is to review whether the law was correctly identified and applied, not to re-appraise the evidence or conduct a fresh hearing.
Tax Law — Interpretation of Tax Statutes — Strict construction and the taxpayer's benefit of ambiguity
Tax legislation is construed strictly according to the plain meaning of its words, but where the words are unclear and yield more than one interpretation a purposive approach may be adopted; only where a provision remains genuinely vague is it resolved in favour of the taxpayer.
Statutory Interpretation — Ambiguity — An undefined term is not thereby ambiguous
A statutory word is not ambiguous merely because it is not defined in the Act; a provision is ambiguous only where it irreconcilably conflicts with another provision or is equally susceptible to more than one meaning, and mere reasonable disagreement about its meaning does not make it ambiguous.
Tax Law — VAT — Exempt supply of immovable property — Nature of property unaffected by manner of letting
The general exemption from VAT for the lease or letting of immovable property under paragraph 1(f) of Schedule 3 to the VAT Act attaches to the use of the property, and the character of immovable property as such is not altered by the manner in which it is let.
Tax Law — VAT — Serviced apartments — Provision of amenities and services as an excluded supply
Where a lessor of residential units supplies, over and above the accommodation, furnishings, security, reception, maintenance, recreational and other facilities and services under section 11 of the VAT Act, the letting constitutes a serviced apartment within paragraph 1(f)(v) of Schedule 3 and falls outside the VAT exemption for immovable property.

Legislation cited (9)

Cases cited (11)

  • Uganda Revenue Authority v Siraje Hassan Kajura (Civil Appeal No. 9 of 2015)
  • Wabulungu MultiPurpose Estates Limited v URA (Civil Appeal No. 26 of 2015)
  • Stichting Goed Wonen vs Staatssecretaris Van Financien C-325/99
  • National Housing & Construction Company v Uganda Revenue Authority (TAT Application No. 5 of 2007)
  • Russel vs Scott [1948] AC 422
  • Fleming vs Associated Newspapers Ltd (1970) 48 15 T.C 382 at 390
  • Pepper vs Hart [1993] AC 593 at 634-635
  • Crane Bank v Uganda Revenue Authority (Civil Appeal No. 18 of 2010)
  • Lafarge Midwest, Inc vs City of Detroit State of Michigan Court of Appeal No. 289292
  • Nile Breweries Limited v Uganda Revenue Authority and Others (Civil Appeal No. 14 of 2022)
  • Century Bottling Company Limited v Uganda Revenue Authority and Another (Civil Appeal No. 51 of 2022)

Full judgment

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

Sharad Karia v Uganda Revenue Authority (Civil Appeal No. 83 of 2024) [2026] UGCommC 384 (11 August 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.