Total (Uganda) Ltd v Uganda Revenue Authority (Reference No. 26 of 2003)

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

On a reference from a Taxing Officer, the Court held that instruction fees are intended to fairly reimburse the successful party for costs actually incurred. Where a party is represented by its own in-house salaried lawyers and paid no separate instruction fee, it cannot recover instruction fees, and awarding them would be wrong in principle. On VAT, the Court held that VAT is recoverable only as a disbursement, requiring evidence either of the advocate's registration as a taxable person or of actual payment; it cannot be awarded on costs as a matter of course. The reference was allowed.

Outcome

Reference allowed; instruction fee disallowed and VAT item suspended pending proof of registration or payment.

Facts

The parties litigated in High Court Civil Appeal No. 1 of 2002, where the respondent, Uganda Revenue Authority, was represented by its own in-house lawyers who were its salaried employees. The applicant lost and was ordered to pay the respondent's costs. The respondent's counsel filed a bill of costs that included instruction fees and VAT. The applicant objected before the Taxing Officer, arguing that instruction fees are a reimbursement of expenses actually incurred in instructing lawyers, and that the respondent, using in-house lawyers on salary, incurred no separate instruction fee. The applicant further objected to the VAT award, contending there was no evidence the respondent paid VAT or was registered to pay it. The Taxing Officer allowed both items, reasoning it was unreasonable to deny such an institution instruction fees. The applicant brought a reference to a single judge of the Court of Appeal under rule 109.

Issues

1. Whether an institution represented by its in-house salaried lawyers is entitled to recover costs under instruction fees that it did not pay to those lawyers.
2. Whether VAT should be awarded on costs to an advocate as a matter of course, or only on proof of registration as a taxable person or actual payment.

Orders

• The order of the Taxing Officer allowing the item of instruction fee on the bill of costs is set aside and substituted with an order disallowing that item.
• The order of the Taxing Officer awarding the respondent VAT is set aside and substituted with an order suspending consideration of that item pending evidence either of the respondent's registration as a taxable person or of actual payment of the said VAT.
• Applicant's costs of the reference to be met by the respondent.

Rules and key headnotes

Legislation cited (2)

• Value Added Tax Statute No. 8 of 1996 s.8
• Advocates Act

Cases cited (7)

• Premchand Raichand Ltd and Anor vs Quarry Services of East Africa Ltd and Anor (1972) EA 162 at 164
• Richard Okwir v URA (HCCS No. 172 of 1996)
• Zuberi vs Returning Officer and Anor (1973) EA 33 at 36
• Commissioner for Land v Odinga (1973) EA 125 at 126
• URA vs Bawa Singh Bhanji Properties Ltd, Misc. Application TAT No.8 of 2000 page 12 & 13
• Henry M.B. Makarot vs C. Adyebo Misc. Application No. 5 of 1997
• Patrick Makumbi v Sole Electric (U) Ltd (Civil Application No. 11 of 1994)

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