By The Taxman
Globe World Engineering Uganda Limited has suffered a legal setback after the High Court ordered the company to file its appeal to the Tax Appeals Tribunal (TAT) as the first legal forum for tax matters.
The company ran to the high court appealing a Value Added Tax and Income tax assessment of UGX32,474,667 raised by Uganda Revenue Authority (URA) in 2018 without going through TAT first.
URA objected to this, arguing that the move was premature and irregular. The justification was that the law requires all tax payers to first exhaust the Tax Appeals Tribunal process, before appealing to the High Court. The High Court agreed with URA’s objection and dismissed the case with costs.
The presiding Justice, Duncan Gaswaga while citing the Constitution, TAT Act and the Tax Procedures Code Act agreed that the the court of first instance for review of a tax objection decision is the Tax Appeals tribunal.
“In the circumstances therefore, this application was filed in the wrong forum. It should have been filed in the Tax Appeals Tribunal first.” Stated Justice Gaswaga
Section 14 of the TAT Act guides that any person who is aggrieved by a decision made under a taxing Act by URA may apply to the tribunal for a review of the decision. The section further empowers the tribunal to review any tax decision in respect to a properly made application.
URA’s Assistant Commissioner for Litigation, George Okello welcomed the High Court decision adding that it reaffirms the Supreme Court guidance on the issue of jurisdiction in tax matters, given in the URA case against Rabbo Enterprise Ltd in July 2017 where Court ruled that all cases of tax nature must commence in the Tax Appeals Tribunal.
According to URA, some taxpayers prefer to sue directly in the High Court as a way of avoiding paying 30% of the tax due to URA, which is a requirement for suing in the Tribunal.
