By Taxman Reporter
The High Court in Kampala has dismissed with costs an application by Nile Breweries Limited (NBL) seeking an interim order to stay the execution of the Tax Appeals Tribunal (TAT) orders against it until it’s appeal in the High Court is heard.
NBL ran to the High Court challenging the enforcement of the ruling against it by TAT on 6th May, 2022 which held the brewery in contempt of the Tribunal.
The application followed a ruling of TAT which slapped a fine of UGX 20 Million on Nile Breweries Limited (NBL) and UGX 30 Million each on Standard Chartered and Stanbic Bank for failure to comply with the Tribunal’s directives.
Earlier, NBL filed an application in TAT objecting to URA’s additional assessment of Local Excise Duty of Ugx 8,093,539,724 and Value Added Tax of Ugx 6,098,292,276. The tribunal granted a temporary injunction order restraining URA from collecting the taxes in dispute from NBL.
As a requirement for the TAT order, NBL was directed to pay 30% of the tax in dispute translating to Ugx 4,257,549,600, which the company defiantly refused to pay. This prompted the authority to issue third party agency notices on NBL’s bankers; Standard Chartered Bank (SCB) and Stanbic Bank (SB) requiring them to remit 30% of the tax on behalf of their client. However, the banks ignored the agency notices.
On 11th May 2022, the High Court presided over by the Deputy Registrar Her Worship Juliet Harty Hatanga dismissed the NBL’s application with costs to URA.
The High Court noted that by NBL’s refusal to obey the TAT Order directing it to pay 30% of the tax in dispute, the company was still in contempt and had to first purge itself of the contemptuous act before the High Court can give it audience.
According to the lead counsel, URA Assistant Commissioner Litigation, George Okello, the latest ruling means the orders of the TAT must be fully complied with by NBL and the Bankers.
Okello added that his team will soon file their costs against NBL and the Banks will recover the costs awarded both by the Tribunal and the High Court which is estimated to be in Hundreds of Millions of shillings.
Okello represented URA with Counsel Tonny Kalungi. NBL on the other hand was represented by Meritas Advocates and Kampala Associated Advocates while Standard Chartered Bank and Stanbic bank were represented by Sebalu and Lule Advocates and AF Mpanga Advocates, respectively.
