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Uganda Revenue Authority v Pentecostal Assemblies of God (Civil Appeal No. 117 and 119 of 2025)

High Court · [2026] UGCOMMC 217 · 2026 Appeal Dismissed; Cross-Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated appeals from the Tax Appeals Tribunal decision on a VAT assessment dispute
Decision
URA's appeal dismissed; PAG's cross-appeal allowed with refund of illegally collected VAT, interest, and general damages awarded

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed URA's appeal and allowed PAG's cross-appeal. The court held that URA's failure to respond to PAG's objection within the mandatory 30-day period under Section 229(5) of the EACCMA deemed the application allowed by operation of law, rendering the VAT assessment void. PAG was entitled to a refund of UGX 73,556,176 illegally collected as VAT, with compounded interest at 2% per month from the date of payment. The court awarded UGX 65,000,000 in general damages for URA's illegal enforcement measures, including impounding PAG's vehicles and deactivating its TIN, which occurred two years after the assessment was legally extinguished.

Outcome

URA's appeal dismissed; PAG's cross-appeal allowed with refund of illegally collected VAT, interest, and general damages awarded

Facts

PAG imported super cereal (Corn Soya Blend Plus) between 2017 and 2021 for humanitarian aid to South Sudanese refugees in West Nile. URA initially cleared the goods without tax but later conducted a post-entry review and issued a VAT assessment of UGX 123,647,357 on 20 October 2021, claiming the items were standard-rated rather than exempt. PAG objected by letter on 4 November 2021, asserting the goods were emergency relief items exempt under the EACCMA. URA did not respond within the mandatory 30-day period. Subsequently, URA enforced collection by impounding PAG's motor vehicles in 2023 and deactivating its TIN. PAG had previously paid UGX 73,556,176 in VAT in June 2019 under similar circumstances. The Tax Appeals Tribunal ruled in favour of PAG on the preliminary point that the assessment was deemed allowed by operation of law due to URA's failure to respond within 30 days, but declined to order a refund or award damages.

Issues

  1. Whether the Tax Appeals Tribunal erred in law by holding that URA's assessment was deemed allowed under Section 229(5) of the EACCMA?
  2. Whether PAG is entitled to a refund of UGX 73,556,176 illegally collected as VAT?
  3. Whether PAG is entitled to general damages for the Respondent's enforcement measures?

Orders

  • Civil Appeal No. 0117 of 2025 dismissed in its entirety.
  • Civil Appeal No. 0119 of 2025 allowed.
  • URA ordered to refund UGX 73,556,176 to PAG, being VAT illegally collected.
  • Interest awarded on the refund at 2% per month compounded from the date of collection until full payment, as per Section 36 of the VAT Act.
  • General damages of UGX 65,000,000 awarded to PAG for URA's illegal enforcement measures.
  • URA to immediately reactivate PAG's TIN and release any remaining distrained property.
  • URA to pay the costs of the appeal and the proceedings in the Tribunal.

Rules and key headnotes

Tax Law — Administrative Timelines — Mandatory Nature of Statutory Deadlines — Deeming Provisions
Where the Commissioner fails to communicate a decision on a review application within the 30-day period mandated by Section 229(4) of the EACCMA, the Commissioner is deemed by operation of Section 229(5) to have allowed the application, and the underlying assessment is legally extinguished. The word 'shall' in the statute imposes a mandatory, non-discretionary obligation, and administrative silence in the face of a statutory command to speak is a legal act with predetermined consequences.
Tax Law — Refund of Illegally Collected Tax — Constitutional Prohibition on Taxation Without Parliamentary Authority
Where tax has been collected on goods that are exempt under regional law and Article 152(1) of the Constitution, the retention of such funds by the state constitutes unjust enrichment. The taxpayer is entitled to a full refund as a debt of justice, not as an act of administrative grace. The simple fact that tax was exacted unlawfully is sufficient to require its repayment.
Tax Law — Interest on Refunds — Mandatory Compounded Interest Under VAT Act
Under Section 36(1) of the Value Added Tax Act, where the Commissioner General is required to refund tax as a result of a decision of the Tax Appeals Tribunal or High Court, he or she shall pay interest at the rate of 2% per month compounded on the tax to be refunded. The use of 'shall' makes this obligation mandatory and non-discretionary, ensuring that the public treasury does not benefit from an interest-free loan created by illegal tax collection.
Administrative Law — Ultra Vires Acts — Enforcement of Legally Extinguished Tax Assessments
Where a tax assessment has been deemed allowed and legally extinguished by operation of Section 229(5) of the EACCMA, any subsequent attempt by the tax authority to enforce that non-existent demand through distress, seizure of property, or deactivation of a taxpayer's TIN is ultra vires, null, and void ab initio. Such enforcement measures constitute fiscal aggression and a violation of the rule of law.
Tax Law — General Damages for Illegal Enforcement — High-Handedness by Tax Authority
Under Section 22(6) of the Tax Appeals Tribunals Act, a tribunal (and on appeal, the High Court) may award general damages against a tax authority for illegal enforcement measures. Where the authority impounds a taxpayer's vehicles for five months and deactivates its TIN based on a legally extinguished assessment, substantial general damages are appropriate to compensate for the disruption, loss of use, and to deter similar administrative high-handedness.
Constitutional Law — Right to Compensation — Adequate Compensation for Victims of Wrongs
Article 126(2)(c) of the Constitution mandates that adequate compensation shall be awarded to victims of wrongs. Where a tribunal or court finds that a taxpayer has been the victim of illegal taxation, the law obligates the adjudicating body to order a refund of the monies collected and to award damages where enforcement measures have caused additional injury. A paper victory without substantive remedies is a denial of justice.
Tax Law — Exemptions for Humanitarian Aid — Emergency Relief Under EACCMA
Under Section 114(2) of the EACCMA and Item 20(b) of Part B of the 5th Schedule, goods imported for emergency relief purposes by a non-governmental organization are explicitly exempt from duty. Where goods such as super cereal are imported for humanitarian aid to refugees, any attempt to levy VAT on such goods is illegal ab initio, and the EACCMA takes precedence over domestic tax laws per Section 253.

Legislation cited (14)

Cases cited (12)

  • Game Discount World (U) Ltd v Uganda Revenue Authority (Civil Appeal No. 39 of 2021)
  • Republic Vs. Commissioner of Customs Services Ex-Parte Unilever Kenya Limited (2012)
  • Uganda Revenue Authority v Tembo Steels Ltd (Civil Appeal No. 09 of 2006)
  • Ismael Dabule & 1004 Others v Attorney General of the Republic of Uganda (Appeal No. 1 of 2018)
  • Warid Telecom (U) Ltd v Uganda Revenue Authority (Civil Suit No. 24 of 2011)
  • Kamunyu v Uganda Revenue Authority (Civil Appeal No. 8 of 2011)
  • Mayambala Mustafa & Others v KCCA (Civil Appeal No. 31 of 2014)
  • Robert Coussens vs Attorney General UGSC 2
  • John Imaniraguha v Uganda Revenue Authority (Civil Suit No. 274 of 2021)
  • Commissioner of Customs v Prompt Packers and Forwarders Limited (Civil Appeal No. 93 of 2015)
  • Woolwich Building Society vs. IRC AC 70
  • AON (U) Limited v Uganda Revenue Authority (High Court Misc. Cause 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 Pentecostal Assemblies of God (Civil Appeal No. 117 and 119 of 2025) [2026] UGCommC 217 (30 April 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.