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Uganda Revenue Authority v Kangaroo Investments Limited (Taxation Reference 1 of 2023)

Tribunal · [2023] UGTAT 70 · 2023 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Reference from Deputy Registrar's taxation ruling arising from costs award in dismissed VAT assessment challenge
Decision
Matter remitted to Deputy Registrar for re-taxation in accordance with principles stated; each party to bear own costs of reference

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The tribunal held that perusals, drawing and drafting of documents, professional copying, and attendances by counsel and clerks constitute instruction fees for which in-house counsel are paid a salary and are therefore not recoverable as separate items in taxation of costs. The tribunal followed Hope Mukanusi v Uganda Revenue Authority, finding that only actual disbursements subject to proof of expenditure are recoverable by in-house counsel. The Deputy Registrar erred in allowing certain items and in failing to apply the half-costs order made by the tribunal in the underlying application.

Outcome

Matter remitted to Deputy Registrar for re-taxation in accordance with principles stated; each party to bear own costs of reference

Facts

URA successfully defended Application 141 of 2022 challenging VAT assessments against Kangaroo Investments Limited. The tribunal dismissed the application with costs on 10 March 2023. During taxation of URA's bill of costs, Kangaroo objected to items 1 to 26 of Part A and items 1 to 13 of Part B. The Deputy Registrar found URA did not incur instruction fees for most items but allowed costs for clerk attendances to file and serve process and for drawing the bill of costs, taxing the bill at Shs. 1,610,000. URA filed this reference challenging the disallowance of items 2 to 4, 7 to 11, 13 to 15, 18 to 19, and 22 to 24 of Part A and items 3 to 11 of Part B. Kangaroo cross-objected that the Deputy Registrar erred in allowing items 5, 6, 12, 16, 17, 20, 25 and 26 of Part A and items 1 and 2 of Part B, and in awarding Shs. 1,610,000 when the tribunal had awarded only half costs.

Issues

  1. Whether the applicant is entitled to the costs indicated under items 2 to 4, 7 to 10, 11, 13 to 15, 18 to 19 and 22 to 24 of Part A and items 3 to 11 of Part B of the applicant's bill of costs?
  2. Whether the Deputy Registrar erred in allowing items 5, 6, 12, 16, 17, 20, 25 and 26 of Part A and items 1 and 2 of Part B of the bill of costs?
  3. Whether the Deputy Registrar erred in awarding the applicant Shs. 1,610,000 in disregard of the tribunal's ruling awarding only half costs?

Orders

  • Application partially allowed.
  • Deputy Registrar justified in disallowing items 2 to 4, 7 to 10, 11 to 15, 18 to 19, and 22 to 24 of Part A of the bill of costs.
  • Items 5, 6, 12, 16, 17, 20, 25 and 26 of Part A and items 1 and 2 of Part B of the bill of costs remitted to the Deputy Registrar to be taxed off in accordance with the principles enumerated in this ruling.
  • Registrar to award half of the costs as stated in the original ruling.
  • Each party to bear its own costs of the reference.

Rules and key headnotes

Taxation of Costs — Instruction Fees — In-House Counsel
Perusals, drawing and drafting of documents, professional copying, and attendances by counsel and clerks constitute instruction fees for which in-house counsel and their clerks are paid a salary and are therefore not recoverable as separate items in taxation of costs.
Taxation of Costs — Recoverable Costs for In-House Counsel
In-house counsel for government entities can only recover actual disbursements which are subject to proof of expenditure, not professional fees for work covered by their salary.
Taxation of Costs — Definition of Instruction Fees Across Courts
What constitutes instruction fees is the same across the High Court and superior courts of judicature, as neither the Advocates (Remuneration and Taxation of Costs) Regulations, the Judicature (Court of Appeal) Rules, nor the Judicature (Supreme Court) Rules provide for any distinction in the definition of instruction fees.
Taxation of Costs — Application of Costs Orders
Where a tribunal awards only half costs, the Deputy Registrar must take into account the quantum of costs awarded when taxing the bill and cannot award the full taxed amount without applying the proportionate reduction ordered.

Legislation cited (3)

Cases cited (9)

  • Makumbi and Another v Sole Electrics (U) Ltd (1990-1994) 1 EA
  • Ebrahim A. Kassim and 2 Others v Habre International Ltd (Reference No. 16 of 1999)
  • Khatijabal Jiwa v Zanab (1957) EA 255
  • Hope Mukanusi v Uganda Revenue Authority (Civil Appeal No. 5 of 2022)
  • Inspector General of Government v Godfrey Magezi (Taxation Reference No. 1 of 2016)
  • Zuberi v Returning Officer and Another (1973) EA 33
  • Total Uganda Ltd v Uganda Revenue Authority (Reference No. 26 of 2003)
  • Jaber Twalib and Another v Global Hardware Company Ltd (HCCA No. 0028 of 2016)
  • Joreth Ltd v Kigano & Associates (Civil Appeal No. 66 of 1999)

Full judgment

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

Uganda Revenue Authority v Kangaroo Investments Limited (Taxation Reference 1 of 2023) 2023 UGTAT 70 (23 October 2023)
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.