Motor Hub East Africa Limited vs Commissioner General, Tanzania Revenue Authority (Civil Appeal No. 192 of 2025) [2026] TZCA 606 (25 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA (CORAM: LILA. J.A., RUMANYIKA. J.A. And MANSOOR. J.A.^ CIVIL APPEAL NO. 192 OF 2025 MOTOR HUB EAST AFRICA LIMITED............................ .............. APPELLANT VERSUS COMMISSIONER GENERAL, TANZANIA REVENUE AUTHORITY.............................................RESPONDENT (Appeal from the Judgement and Decree of the Tax Revenue Appeals Tribunal) f Nqimilanga, Chairperson.) Dated the 22n d day of November, 2025 in Tax Appeal No. 21 of 2024 JUDGEMENT OF THE COURT 3 rd December 2025 & 25th May 2026 MANSOOR, 3.A.: The appellant, a taxpayer who is carrying on the business of Auto Hub for Tata vehicles in Tanzania and neighbouring countries, has brought this appeal against the decision of the Tax Revenue Appeals Tribunal (the Tribunal) which found that, the Tax Revenue Appeals Board (the Board) lacked jurisdiction to entertain the issue of understated payables amounting to USD 492,141. 1 The factual background giving rise to this appeal is largely undisputed. In March 2021, the respondent issued a Corporate Income Tax Assessment No. F423289144 for the year of income 2018, with a tax liability of TZS 755,574,035. The appellant, being aggrieved by this assessment, lodged a notice of objection on 8th April 2021 on the ground that, the respondent had treated USD 600,000 as drawings, while the appellant contended that, the said amount was a repayment of a short term loan to TATA Africa Holding (Tanzania) Limited. On 9th August 2021, the respondent replied to the appellant's notice of objection by issuing a notice of proposed determination of objection rejecting the appellant's ground. Additionally, the respondent issued a letter titled "Rectification of an Error Apparent on the Face of Records" through which the respondent introduced another taxable income of USD 492.141 which was termed as understated payables on the same corporate income tax assessment for the year 2018. The appellant responded to both the proposed determination and the rectification on 1s t October 2021, disputing the inclusion of the USD 492.141 as taxable income. Subsequently, on 15th June 2022, the respondent issued a Notice of Final Determination of Objection together with an amended assessment incorporating the USD 492,141, thereby 2 increasing the tax liability from TZS 755,574,035 to TZS 1,390,564,232.54. Being aggrieved, the appellant filed Appeal No. 271 of 2023 before the Board. In the judgment delivered on 18th October 2023 by the Board, the appeal was partly allowed. On the issue of USD 492,141, the Board decided in favour of the appellant, holding that a payable amount cannot be transformed into taxable income. The respondent appealed to the Tribunal via Tax Appeal No. 21 of 2024. The Tribunal, in its judgment delivered on 22n d November 2024, upheld the respondent's appeal on the issue of jurisdiction, holding that the Board had no jurisdiction to entertain the issue of understated payables because it was not a ground in the notice of objection filed by the appellant and there was no objection decision on the same. The appeal thus raises the following grounds: 1. That the Tax Revenue Appeals Tribunal erred in law by holding that the Tax Revenue Appeals Board had no jurisdiction to entertain the issue o f understated payables o f USD 492,141. 2. That the Honourable Tax Revenue Appeals Tribunal erred in law by holding that there was no decision made by the Commissioner General on the issue o f understated payables o f USD 492,141, 3 During the hearing, the appellant was represented by Mr. Nasri Hassan and Ms. Lucy Kiangi, learned Advocates, while the respondent was represented by Ms. Catheline Mwanulwa, Ms. Akwila Mrosso, Mr. Andrew Francis and Mr. Dathan Mafuru, all learned State Attorneys. Mr. Hassan adopted the written submissions earlier filed and prayed to have the appeal allowed and the decision of the Tribunal set aside. In the written submissions, the appellant submitted on the two grounds that, the Tribunal gravely erred in law by holding that the Board had no jurisdiction to entertain the issue of understated payables of USD 492,141. The core argument was that the rectification of an error apparent on the face of the record, which introduced this amount, fell squarely within the ambit of an "objection decision" as defined under the law. The appellant drew our attention to Section 3 of the Tax Administration Act, Cap. 438 R.E. 2019, which defines an "objection decision" as "a decision in respect o f a tax decision made under section 52". Relying on Sections 52(3), (4) and (5) of the Tax Administration Act (TAA), R.E. 2019, the appellant argued that the procedure for a proposed determination, the opportunity for the taxpayer to make submissions, and the final determination are all hallmarks of an objection decision. Counsel for the appellant advanced three main reasons why the rectification constituted an objection decision. First, the notice of rectification was issued in accordance with Section 52(3) and (5), as it was served together with the notice of proposed determination of objection. Second, the rectification referred to the same corporate income tax assessment number, F423289144, for the year 2018. Third, the final notice of rectification amended that very same assessment, effectively becoming part of the objection decision. It was further argued that, the appellant was provided with thirty days to respond to the rectification, which it did on 1s t October 2021, mirroring the process under Section 52(4). The learned appellant's counsel emphasized that both the proposed determination and the rectification were issued on the same date, and both were responded to on the same date, culminating in a single final determination on 15th June 2022. Therefore, it was impossible to differentiate between the two processes. The appellant's counsel also contended that, the issue of understated payables was discussed during the audit, where the respondent had admitted that such payables minimize taxable income. The appellant's counsel quoted from Exhibit A1 found at page 466 of the Record of Appeal, where the respondent stated: "We concur with the 5 reconciliation made by the taxpayer that resulted to understated payables amounting to USD 492,141. The amount o f understated payables minimizes taxable income therefore, the same will be included in determination o f adjusted taxable income." Given that the dispute was over the same assessment, the appellant's counsel submitted that, it was impossible to file another objection against the amended assessment. The only available avenue was to appeal to the Board. In support of this position, the appellant relied on the case of Samson Ngw’alida vs The Commissioner General Tanzania Revenue Authority (Civil Appeal No. 86 of 2008) [2011] TZCA 527 (4 July 2011), for the proposition that the Board has sole original jurisdiction in disputes arising from revenue laws. The appellant's counsel concluded that the Tribunal erred in stripping the Board of its jurisdiction and prayed for the appeal to be allowed. Responding, Mr. Francis supported the judgment of the Tribunal and urged this Court to dismiss the appeal with costs. He submitted that; the appellant filed the notice of objection on 8th April 2021 on one ground only which was on an issue of disallowance of an alleged drawing of USD 600,000. The appellant never objected to the understated payables of USD 492,141. Therefore, there was no objection under Section 51 of TAA on the issue of understated payables of USD 492,141, consequently, no 6 objection decision was ever made by the Commissioner Genera! on that issue. Mr. Francis argued further that, the rectification was not issued under Section 52, but under Section 31(4) of Cap. 438, which empowers the Commissioner General to correct a defect in a document that does not involve a dispute. The Commissioner noted a computational error that some amounts was skipped. That was a mere mistake on computation, not a dispute of fact or law. He cited the case of Roshan Meghjee and Co. Ltd versus Commissioner General TRA, Civil Appeal No. 49 of 2008 for the principle that, there is no estoppel against the performance of a statutory duty. He thus, implored us to find that the Commissioner was right to correct the error. On the question of jurisdiction, the counsel relied on Section 53(1) of the TAA and Section 16(1) of the Tax Revenue Appeals Act (TRRA), which provide that, an appeal to the Board lies only from an objection decision. The respondent also relied on the Court's decision in Pan African Energy Tanzania Ltd vs Commissioner General TRA (Civil Appeal No. 121 of 2018) [2019] TZCA 692 (12 June 2019), in which we had held that "an appeal to the Board is presently narrowed down to an objection decision o f the CG made under the TAA." The respondent's counsel distinguished the facts of the Samson Ngw'alida's Case (supra), from those in the present case, arguing that, the general jurisdiction of the Board under Section 7 of the TRAA is limited by Section 7A, which bars the Board from entertaining any appeal arising from a tax assessment unless the dispute resolution procedures under Part VIII of the TAA have been complied with. In response to the appellant's argument that the initial assessment was amended, the counsel submitted that, one assessment can contain multiple items. A taxpayer must object to each specific item. Failing to object to the understated payables meant the appellant accepted it. If the appellant was aggrieved by the rectification, the proper legal pathway was to file a fresh objection to the rectified assessment, not to leapfrog directly to the Board. He therefore concluded that, the Tribunal was correct in its findings that the Board lacked jurisdiction to entertain the appeal as there was no objection decision on the issue raised. He prayed for the appeal to be dismissed. Having carefully considered the submissions of both parties, the record of appeal, and the relevant legal authorities cited, the issues for determination in this appeal are; One, whether the "Rectification of an Error on the Face of Records" issued by the respondent under Section 39 of the TAA constitutes an objection decision within the meaning of the 8 Act. Two, whether the Board had jurisdiction to entertain the issue of understated payables of USD 492,141. The two issues are intertwined and shall be determined together. We shall begin our analysis by examining the relevant statutory provisions governing appeals in tax matters. The framework for tax appeals in Tanzania is well-established and has been the subject of judicial interpretation by this Court. Section 3 of TAA defines an "objection decision" as follows: "Objection decision" means a decision in respect o f a tax decision made under section 63. Section 63 of the TAA provides for decisions on objection. Subsection (5) thereof states: "(5) The Commissioner Genera / may, after the receipt o f the submissions by the objector made pursuant to subsection (4)— (a) determine the objection in the light o f the amended assessment or refusal and any submission made by the objector; or (b) determine the objection partially in accordance with the submission by the objector, and proceed to issue a notice o f final determination o f objection." The right of appeal to the Board is circumscribed by Section 64 of the TAA which provides: "64 ( 1 ) A person who is aggrieved by an objection decision or other decision or omission o f the Commissioner General under this Part may appeal to the Board in accordance with the provisions o f the Tax Revenue Appeals A c t " Furthermore, Section 17(1) of the TRRA provides: "A person who is aggrieved by an objection decision o f the Commissioner General made under the Tax Administration Act may appeal to the Board." A careful reading of the provisions reveals a clear legislative intention that, appeals to the Board are confined to objection decisions. This Court has had the occasion to interpret these provisions in a number of cases. In the case of Pan African Energy Tanzania Ltd (supra) this Court held at page 13: "From the provision, it is significantly discernible that an appeal to the Board is presently narrowed down to an objection decision o f the CG made under the TAA. It is beyond question that , in the situation at hand, there is, so far, no objection decision o f the CG and, to say the least, going by the specific language used in section 10 16(1), the purported appeal before TRAB which did not result from objection decision o f the CG was incompetent." This position was followed by this Court in Pan African Tanzania Limited vs Commissioner General Tanzania Revenue Authority (Civil Appeal No. 172 of 2020) [2021] TZCA 287 (9 July 2021). The principle is now settled, for the Board to have jurisdiction to entertain an appeal, there must first exist an objection decision by the Commissioner General. Turning to the facts of the present case, we note that the appellant filed its notice of objection on 8th April 2021. The notice of objection, which was admitted before the Board as Exhibit A5, was premised on one ground only: disallowance of alleged drawing of USD 600,000. The appellant did not raise any objection regarding the understated payables of USD 492,141 at that stage. It is not disputed that the respondent issued a notice of proposed determination of objection on 9th August 2021 responding to the sole ground of objection relating to USD 600,000. Accompanying that notice was a separate letter titled "Rectification of an Error Apparent on the Face of Records" issued under Section 31(4) of the TAA . That provision states: li "Where a document issued by the Commissioner General under a tax law contains a defect that does not involve a dispute as to the interpretation o f the tax law or facts involving a particular person, the Commissioner GeneraI may, for the purposes o f rectifying the defect, amend the document" The appellant contends that the rectification of understated payables falls within the ambit of an objection decision under Section 52 of the TAA R.E. 2019 (now Section 63) for several reasons; first, that the notices for rectification were issued in accordance with Section 52(3) and (5); second, that the rectification referred to the same assessment number; and third, that the rectification amended the same corporate income tax assessment. With respect, we find the preceding arguments unpersuasive. The rectification notice dated 9th August 2021 was explicitly issued under Section 31(4) of the TAA (now Section 39(4)), not under Section 52 (now Section 63) which deals with decisions on objection. This is a fundamental distinction. Section 39(4) allows the Commissioner General to amend a document containing a defect that does not involve a dispute as to the interpretation of tax law or facts. Section 63, on the other hand, deals with the determination of objections properly lodged by a taxpayer. 12 The appellant did not object to the understated payables at any point during the objection proceedings. Section 62(1) of theTAA (formerly Section 51(1)) requires a person aggrieved by a tax decision to file an objection within thirty days. No such objection was filed regarding the understated payables as alluded before. Consequently, there was no objection decision by the Commissioner General on that matter, as required by law before an appeal can be lodged before the Board. We are fortified in this conclusion by the definition of "objection decision" in Section 3 of the TAA. An objection decision is a decision made under Section 63. For a decision to be made under Section 63, there must first be an objection lodged under Section 62. Since no objection was lodged regarding the understated payables, there cannot be said to exist an objection decision on that matter. The appellant further argued that because the rectification emanated from the same assessment and was issued together with the proposed determination of objection, it should be treated as part of the objection decision. This argument is flawed. One assessment can incorporate several items, some of which may be objected to and some not. The fact that the understated payables related to the same assessment number does not automatically elevate the rectification to an 13 objection decision. The critical question is whether the taxpayer lodged an objection to that specific item. In this case, the appellant did not. The appellant also contended that it was impossible to file another objection against the amended assessment because it had already filed an objection against the same assessment. This contention overlooks the fact that the understated payables were a new item introduced through rectification. If the appellant was aggrieved by that rectification, the proper course of action was to file a fresh objection to the rectified assessment. The law does not preclude a taxpayer from filing multiple objections on different occasions relating to different items in the same assessment. We find support for this position in Section 62(4) of the TAA which requires that an objection be in writing stating the grounds upon which it is made. Each ground of objection must be specifically identified. Where a taxpayer fails to object to a particular item, that item cannot form the basis of an appeal to the Board. Our view is further strengthened by the fact that the rectification power under Section 39 is a distinct statutory power conferred upon the Commissioner General to correct defects that do not involve disputes. The appellant argues that the respondent wrongly applied Section 31(4) (now 14 Section 39(4)) because there was a dispute regarding the inclusion of the understated payables. However, the record shows that the understated payables were not disputed by the appellant at the objection stage. The appellant only raised the issue at the Board as a ground of appeal, which was unprocedural. The well-established principle of statutory interpretation is that tax laws ought to be interpreted strictly. In the present case, there is no ambiguity that under Section 64(1) of the TAA read together with Section 17(1) of the TRAA, appeals to the Board are confined to objection decisions. The rectification of understated payables issued under Section 39(4) of the TAA is not an objection decision and was never determined by the Commissioner General as an objection. The appellant attempted to rely on the case of Samson Ngw'alida (supra) for the proposition that the Board has wide jurisdiction in revenue matters. While it is true that the Board has sole original jurisdiction in disputes arising from revenue laws under Section 7 of the TRAA, that jurisdiction is not unlimited. Section 8 of the TRAA (formerly Section 7A) specifically provides: "The Board shall not entertain any appeal arising from assessment o f tax unless Part VII o f the Tax Administration Act is complied with." 15 Part VII of the TAA (Part VIII in the R.E. 2023) deals with dispute resolution and includes the requirement that there must first be an objection and an objection decision before an appeal can be lodged. It is stressed that; the Board cannot entertain an appeal that does not arise from an objection decision. This limitation is clear and unambiguous. We also note the principle established in Roshan Meghjee and Co. Ltd (supra), where this Court held that there is no estoppel against the performance of a statutory duty. The Commissioner General was therefore entitled to rectify the error under Section 39 (4), and that rectification did not require an objection from the appellant to be valid. The appellant also submitted that the issue of understated payables was discussed during the audit and that the respondent had agreed that the amount minimized taxable income. This submission goes to the merits of the tax computation, not to the jurisdictional question. The Tribunal did not determine the merits of whether the understated payables should or should not have been included as taxable income. Indeed, both the Board and the Tribunal agreed that the assessment was erroneous. The Tribunal's decision on jurisdiction was separate and distinct from its agreement with the Board on the merits. The Tribunal, at page 28 of its judgment, stated: 16 "Having considered the submission under this ground, this Tribunal finds that the Board did not take into consideration that rectification of understated payables o f TZS 492,141.00 was not objected by the Respondent, and hence was never determined by the Commissioner at any point o f time , consequently it has never qualified to be an objection decision to be appealed against, it is correct that the Appellant that the Tax Revenue Appeals Board had no jurisdiction to entertain the issue o f understated payables as it was not a ground in the notice o f objection filed by the taxpayer and the taxpayer had no objection decision on the same." The Tribunal correctly distinguished between the procedural requirement of jurisdiction which requires an objection decision and the substantive merits of the case. Even though the Tribunal agreed with the Board that the assessment was erroneous, it could not ignore the statutory requirement that appeals to it must arise from objection decisions. In light of the foregoing analysis, we find that the Tribunal was correct in holding that the Board had no jurisdiction to entertain the issue of understated payables of USD 492,141. The appellant failed to object to that item, there was no objection decision by the Commissioner General 17 on that item, and consequently, there was no competent appeal before the Board on that issue. For the reasons stated above, we find that this appeal lacks merit. It is hereby dismissed in its entirety. We affirm the decision of the Tribunal in Tax Appeal No. 21 of 2024. On the question of costs, we order each party to bear its own costs. DATED at DODOMA this 21s t day of May 2026. Judgment delivered virtually, this 25th day of May, 2026 in the presence of Ms. Lucy Kiangi, learned counsel for the Appellant, Mr. Abdillah Hussein, learned State Attorney for the Respondent and Mr. John Gelvas, Court clerk is hereby certified as a true copy of the original. S. A. LILA JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL L. A. MANSOOR JUSTICE OF APPEAL