The High Court Kampala on April 12, 2022 dismissed with costs an application in which Uganda Revenue Authority (URA) had appealed against the ruling by Tax Appeals Tribunal in favour of M-KOPA Uganda Ltd.
In 2017, M-KOPA Uganda Ltd filed a suit against URA before the Tax Appeals Tribunal vide TAT Application No. 15 of 2017 contesting a tax assessment of UGX. 429,603,357/= on solar equipment imported and supplied by the same company, the case that M-KOPA subsequently won.
URA later appealed to the High Court, expressing its dissatisfaction with the tribunal’s decision.
The application sought for orders that:
1) An order of interim stay doth issue, restraining the Respondents, their agents, assignees and those claiming under them, and all banks holding the Applicant’s bank accounts, from executing of the orders of the Tax Appeals Tribunal, pending the final disposal of the Applicant’s main Application for stay of execution.
2) Costs of this application abide by the outcome of the appeal.
Accordingly, M-KOPA Uganda has since demanded for a refund of 30% of the tax in dispute.
“The Applicant contends that the Respondent shall execute the orders of the Tax Appeals Tribunal unless execution of the same is stayed. That the Applicant’s appeal would otherwise be rendered nugatory if stay of execution is not granted. The Applicant is also willing to furnish security for the due performance of the decree as may be ultimately binding upon it.”
“The Respondent, through Diana Ssali’s (Head of Finance at Respondent company) affidavit averred that pendency of an appeal is not a bar to enforcement of a decree. Secondly that the sums demanded by the Respondent from the Applicant was not execution or a threat of execution of the Tax Appeals Tribunal ruling, but was instead paid as the 30% of the tax in dispute required by the law. The Respondent contends that the appeal will not be rendered nugatory if this application is not granted. Also that the appeal does not have a likelihood of success, and the Applicant has not provided security for due performance. Lastly, that the application was brought unreasonably late,” said court in the document.
In her ruling, Justice Jeanne Rwakakooko noted among other provisions that Order 43 Rule 4 of the Civil Procedure Rules provides that: An appeal to the High Court shall not operate as a stay of proceedings under a decree or order appealed from except so far as the High Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the High Court may for sufficient cause order stay of execution of the decree.
Centenary Group and Service Cops Sign Strategic Partnership to Accelerate Digital Financial Inclusion“It is not in dispute that the Applicant has lodged an appeal. On file is a Notice of Appeal lodged on 13th May, 2019 for the commencement of Civil Appeal No. 30 of 2019. On whether the Applicant may suffer substantial loss if stay of execution is not granted, the Applicant’s counsel submitted that the sums contested are substantial and payment of the sums would be prejudicial to the Applicant in the likely event that the appeal succeeds,” she said.
She added that the Applicant’s affidavit in support of the application does not state what substantial loss it stands to suffer if the application for stay of execution is not granted.
“Counsel’s submission can only ore be interpreted as evidence from the bar which is inadmissible before this court. Affidavits in an application serve as evidence to support the remedies spught in the application. This was demonstrated in Nalwoga Gladys -v- Edco Limited & 2 Others, Revision Cause No. 05 of 2012.”
“In the absence of evidence to support this consideration, I can’t confirm that the Applicant will actually suffer any substantial loss if the order for stay of execution is not granted,” said Madam Justice.
She also revealed that the application was delayed since iit was lodged on 15 August 2019 from the Tax Appeals Tribunal ruling which was delivered on 29th April, 2019.
“It was three months from lodgement of the appeal that the Applicant lodged this application. I find this to have not been inordinate delay in the context of the case.”
The Applicant has expressed a willingness in paragraph 10 of the affidavit in support to furnish security for the due performance of the decree and order that may be ultimately be binding upon it.
“Whereas that fulfils the third criterion for grant of stay of execution, I find that this application still fails because there is no substantial loss to guard against in the event that the Respondent does effect execution of the Tax Appeals Tribunal decree.”
