DELTA BEVERAGES (PRIVATE) LIMITED versus ZIMBABWE REVENUE AUTHORITY (294 of 2025) [2025] ZWHHC 294 (7 May 2025)

9 HH 294-25 HCH 1696/24 DELTA BEVERAGES (PRIVATE) LIMITED versus ZIMBABWE REVENUE AUTHORITY HIGH COURT OF ZIMBABWE DEME J HARARE, 5 November, 2024 and 7 May 2025. Opposed Application T Mpofu, for the Applicant. S Bhebe, for the Respondent. DEME J: The Applicant initially approached this court seeking a provisional order. In particular, the provisional order is couched in the following way: “TERMS OF FINAL ORDER SOUGHT That you show cause to this Honourable Court why a final order should not be made in the following terms: 1. The provisional order be and is hereby confirmed. It be and is hereby declared that the Respondent shall complete the audit process taking into account all the ZWL transactions including payments made to it by the Applicant for the tax period March 2019 to October 2021 and shall thereafter issue final assessments. 3. The Respondent shall pay the Applicant’s costs of suit. INTERIM RELIEF GRANTED Pending resolution of this matter on the return date: Pending the return date, the Respondent be and is hereby interdicted from instituting or pursuing any and all collection measures and garnishing the Applicant’s accounts for the tax period March 2019 to October 2021. SERVICE OF THE PROVISIONAL ORDER The Applicants or their legal practitioners or any employee thereof shall be authorised to serve a copy of this Provisional Order on the Respondents.” On 21 June 2024, this court granted, by consent, an order for the removal of this matter from the urgent roll and consequently referred the matter to the opposed roll with some directions. In particular, the order by this court is as follows: “1.The matter be and is hereby removed from the roll with the following direction; The matter be and is hereby referred to the opposed roll with the following further directions; Respondent shall respond to applicant’s further affidavit within 10 days of the date of this order.Applicant shall file its heads of argument within 10 days of service upon it of respondent’s further affidavit.Respondent shall file its heads of argument within 10 days of service upon it of applicant’s heads of argument.Applicant shall set the matter down within 10 days of service upon it of respondent’s heads of argument.Respondent shall not effect recovery measures against applicant for the 2019 to 2021 tax period.Applicant shall continue making monthly payments in terms of the payment plan currently in place and agreed to by the parties. 2.There shall be no order as to costs.” Thus, the matter was eventually turned into an ordinary opposed matter by virtue of the order by this court. The Respondent, after assessing the Applicant’s tax liability for the period ranging from March 2019 to October 2021, issued an assessment which notified the Applicant of its outstanding tax obligations. The Applicant is of the view that the tax assessments issued by the Respondent are contrary to the provisions of the Value Added Tax Act [Chapter 23:12] (hereinafter called “the Value Added Tax Act”). Pursuant to the assessments, the Respondent threatened to garnish the Applicant’s banking account as a collection measure of the Applicant’s outstanding tax obligations. According to the Applicant, the acts by the Respondent is unlawful. The Applicant is of the belief that the essential elements of the application for interdict are satisfied by the present application. In opposing the present application, the Respondent raised some points in limine against the final relief sought by the Applicant. Firstly, the Respondent is of the view that relief sought by the Applicant in the present application is incompetent. According to the Respondent, the relief prayed for by the Applicant compelling the Respondent to complete auditing and issue a tax assessment thereafter is incompetent. The Respondent is of the belief that it completed this exercise. The Respondent further claimed that the Applicant objected to the assessments done by the Respondent before this court. The objection was dismissed on 25 October 2023 under Judgment Number HH577/23. Additionally, the Respondent further argued that such assessments made can only be altered by the appeal court and not by the same court. Inviting this court to revisit its decision is unlawful, according to the Respondent. Related to the first point in limine, the Respondent raised the question of issue estoppel against the present application on the basis that the matter was finally and definitively resolved by this court and the Supreme Court under Judgment Numbers HH577/23 and SC62/24 respectively. The Respondent claimed that the present application is improperly before this court on this basis. By way of a third point in limine, the Respondent argued that the Applicant failed to exhaust domestic remedies. The Respondent alleged that the Applicant approached the Ministry of Finance and Economic Development with a view to get concurrence for liquidation of its tax liabilities through treasury bills. Before finalizing the negotiations with the Ministry of Finance and Economic Development, the Applicant approached this court and according to the Respondent, this act flies against the spirit of exhausting domestic remedies. The Respondent is of the view that the Applicant ought to have waited for the response from the Ministry of Finance and Economic Development. The Respondent further maintained that it did not garnish the Applicant’s bank account pending the outcome of such talks. I will proceed to make a determination on the points in limine raised by the Respondent. The second point in limine, in my view, has the potential of disposing of the matter before this court. In this respect, I will start by making a determination on that point in limine before dealing with the rest of the points in limine. Responding to the issue estoppel, Adv Mpofu argued that the relief sought is properly before the court on the basis of five factors which he advanced. Firstly, he claimed that the assessments were not completed by the Respondent at the time of the alleged issuance of tax assessments. According to Adv Mpofu, the Respondent kept adjusting the tax liabilities payable to the Respondent. For this reason, Adv Mpofu contended that issue estoppel is inapplicable under such circumstances. Adv Mpofu further argued that after the final assessment, the Respondent cannot make further adjustments. Reference was made to the letter on pages 49, 83, 90, 96 and 99 of the record. The counsel for the Applicant further argued that the tax assessments are only sounding in foreign currency. The Applicant, in its relief, prays for an order that the Respondent must be compelled to make assessments of the tax liabilities payable in local currency. On this basis, Adv Mpofu argued that the point in limine of issue estoppel is defeated by this factor. Thirdly, Adv Mpofu contended that the Respondent, by accepting part of the tax in local currency, the Respondent will be unjustly enriched if the excess tax paid in local currency is not revalued. Hence, the tax in local currency must be revalued to reflect the value of the amount paid at the material time, according to Adv Mpofu. Fourthly, the counsel for the Applicant maintained that the tax assessments issued by the Respondent are incomplete in certain portions of the appropriate Form completed. Lastly, Adv Mpofu argued that the Respondent wishes to refund the Applicant excess tax paid in local currency after the alleged final assessment. According to the counsel for the Applicant, the Respondent’s conduct by refunding the excess tax paid by the Applicant is a sign that the tax assessments were incomplete. On this basis, Adv Mpofu submitted that the point in limine of issue estoppel will not apply. Arguing in favour of issue estoppel, Adv Bhebe referred the court to p 16 of the Judgment Number SC62/24, where the Supreme Court remarked as follows: “It is therefore apparent that the validity of a notice of assessment does not depend on the minute details of the internal wording of the notice. A correct description of a notice and the inclusion in the notice of the key requirements of a notice specified in ss 2 and 51 (2) of the ITA validates the notice. Sections 2, 51 (2) of ITA and s 31 (5) of VATA do not concern themselves with the, details which can be found in a notice other than the specified aspects. It is therefore, my considered view that the inclusion of the words “gross tax” inside the notices does not invalidate the notices of assessment since all the requirements of a valid assessment have been met. As a result, the appellants’ argument that the notices of assessment are invalid because the respondent used the term “gross tax” in computing details in the notices is not correct” The question which, therefore, exercises my mind is whether the point in limine can be sustained under the present application. Issue estoppel arises where: “a particular issue(s), forming a necessary ingredient in a cause of action, has been litigated and decided in a first action.1”. Thus, this court in the case of Matingo v Humbe2 concluded that issue estoppel is a species of res judicata. More, particularly, Mafusire J, in the case of Matingo v Humbe supra held that: “Issue estoppel is a species of res judicata: see Munemo v Muswera 1987 (1) ZLR 20 (SC), at p 23C.” It is apparent that issue estoppel is not part of the Roman Dutch Law but was borrowed by our courts from the English Law. Reference is made to the case of Willowvale Motor Industries v Sunshine Rent-a-Car3, where Khosa Ja propounded the following remarks: “While the doctrine of issue estoppel may not be part of the Roman-Dutch law and may not as yet have found a berth in South African law, it seems to me that this court, in the wider application of existing law in the light of current modes of thought, has found the artificiality of limiting estoppel to the same subject to be unproductive of justice, and has embraced the doctrine of issue estoppel under the general rule of public policy that there should be finality in litigation.” The requirements of issue estoppel, are therefore substantially similar to the requirements of res judicata. Mafusire J, in para 9 in the case of Matingo v Humbe supra postulated the following comments: “[9] In another English case of Carl Zeiss Stiftung v Rayner & Keeler [1976] 1 AC 8534, the three requirements of issue estoppel were identified to be: that the same question has been decided;that the judicial decision which is said to create the estoppel was final; andthat the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which estoppel is raised.” In summarizing the relief for the Applicant under Judgment Number HH577/23, Mafusire J, in para 1, commented as follows: “[1] The applicant seeks a declaration of invalidity in respect of additional income tax assessments for the tax years ended 2019 and 2020. It also seeks another declaration of invalidity of the additional value added tax [VAT] assessments issued against it by the respondent for the period March 2019 to October 2021. It claims costs of suit on an attorney and client scale against the respondent.” After hearing all the submissions, Mafusire J, in para (s) 46-8 of the Judgment Number HH577/23, superbly remarked as follows: “[46] However, none of what the applicant says changes the character of the levy or penalty from being anything but a tax. It is manifestly the intention of the legislature that penalties or additional taxes levied on tax payable in foreign currency are also payable in foreign currency. Section 4A (7) of the Finance Act, in paraphrase, declares that for the avoidance of doubt the provisions of the Taxes Act shall apply, with such necessary changes as may be necessary, to the payment in foreign currency of the taxes in the same way as they apply to the payment of such taxes in Zimbabwean currency. [47] The South African case of McNeil above is not relevant because, firstly, the language of the tax legislation that the court was considering in that case was subtly different from the language of the tax legislation presently under consideration. In regards to the additional tax payable for a default, the legislation in that case simply referred to “… an amount equal to …”, whereas our legislation specifically refers to “… an amount of tax equal to …” Undoubtedly, this is to stress the fact that the additional tax is a tax. Secondly, Counsel is guilty of selective quoting. The court in that judgment started from the premise of accepting that additional tax is a tax, albeit of an unusual kind. Thirdly, the focus of the court in that case was completely different from the focus in the present case. The focus in the present case is whether penalties on default of a tax chargeable in foreign currency are also chargeable in foreign currency or local currency. In that case the focus was the examination of whether or not a penalty is a tax. Our legislature deems a penalty on an outstanding tax as a tax, admittedly, of an unusual kind. [48] All the objections by the applicant to the additional assessments by the respondent in respect of the tax years in question lack merit. The application is hereby dismissed with costs.” This put to bed the arguments and the objections raised against similar tax obligations payable. More fundamentally, this judgment declared that the tax assessments issued by the Respondent are valid. Dissatisfied by the decision of this court, the Applicant approached the Supreme Court by way of appeal on the following grounds of appeal: “The court a quo erred at law and misdirected itself by failing to consider and determine material issues raised by the appellant, thus rendering the proceedings grossly irregular. In particular, the court a quo failed to consider and determine the following issues raised by the appellant: Whether there is a penalty for payment of taxes purportedly due in foreign currency in the local legal tender, and what that penalty is?Whether the apportionment formulae used by the respondent exists in the taxing Act, and if so in which provisions of the taxing Acts?Whether the formulae used by the respondent in computing both income tax and VAT was rational, and possible to comply with?Whether there is a constitutional bar to the respondent utilizing s 4 (A) (7) of the Finance Act and s 38 (9) of the VAT Act to amend primary legislation?The implication of the contra-fiscum rule to uncertain tax legislation. The court a quo erred at law and misdirected itself in finding that the assessments issued were valid at law when such assessments referred to a line item described as “gross tax”, which ‘gross tax’ is not included in any taxing statute and is not a necessary component in the computation of taxable income.The court a quo erred at law and misdirected itself in finding that the jurisdictional facts to issue additional assessments were present permitting the respondent to issue additional assessments on the appellant.The court a quo erred at law and misdirected itself in finding that the appellant was not entitled to deduct its input tax on purchases made in foreign currency and in ZWL from its output in foreign currency.The court a quo erred at law in finding that penalties were chargeable in foreign currency, this despite neither s 4 (A) of the Finance Act nor s 38 of the VAT Act providing for the charging of penalties in foreign currency.The court a quo erred at law and misdirected itself in applying s 4 (A)(7) of the Finance Act and s 38 (9) of the VAT Act through the instrument of public notices in such a manner that they permit the amendment of primary legislation by institutions other than parliament, which is unconstitutional and therefore unlawful.” After assessing all the Applicant’s grounds of appeal, the Supreme Court unanimously dismissed the appeal. In particular, the Supreme Court, under Judgment Number SC62/24, held that: “We agree with the court a quo’s observations. In terms of s 46 (1) (a) (i) of the ITA a penalty is referred to as “an amount of tax”. In terms of s 46 (1a) of the ITA a penalty is referred to as “additional tax”. Our law therefore differs from South African law whose legislation is different from ours. Therefore, the case of DFC of T v Fontana 88 ATC 4751 is not relevant in the determination of this case. From the definitions of a penalty in terms of s 46, it cannot be denied that a penalty is a tax. In this case, the respondent imposed additional tax (a penalty) on the appellant after it had breached the duty to pay tax payable in foreign currency. The court is satisfied that a penalty for any outstanding foreign currency tax is payable in foreign currency and it also follows that a penalty on any outstanding local currency tax is payable in local currency. Therefore, the court a quo’s decision is correct. There is no irregularity or irrationality in the court a quo’s determination of the application placed before it by the appellant. DISPOSITION The appellant’s grounds of appeal have no merit. Costs shall as is the norm follow the result. It be and is hereby ordered that: ‘The appeal be and is hereby dismissed with costs.” The judgment by the Supreme Court under Judgment Number SC62/24, apart from being final in nature, is also binding to this court as this is a decision by a court which is superior to this court. The concept of inferior courts being bound by decisions of superior courts is ordinarily called stare decisis. In the absence of any good cause shown, this court has to be bound by the decision of the Supreme Court regardless of the hardship which may eventuate therefrom. Such a decision cannot be subjected to further examination by this court in terms of the stare decisis principle. The doctrine of stare decisis was appositely explained in the case of Denhere v Denhere and Anor5, where the Constitutional Court elegantly pronounced that: “stare decisis” are Latin words which mean that things that have been decided should be left to stay undisturbed. The meaning of the doctrine of stare decisis is that when a point of law has been once solemnly and necessarily settled by a decision of a competent court it will no longer be considered open to examination or to a new ruling by the same tribunal or those which are bound to follow its adjudication. The doctrine of stare decisis is therefore a rule of precedent or authority, addressed to lower courts and members of the public who are decision-makers, to the effect that decisions of the higher courts on particular points of law presented to and passed upon by those courts are law. Lower courts are bound to obey them in similar cases in future until they are overruled, even though a rigorous adherence to them might at times work individual hardship.” In my view, issue estoppel can be sustained under such circumstances. The essential requirements of issue estoppel are present in this case as outlined in the Matingo v Humbe supra. The relief sought by the Applicant seeks to indirectly challenge the validity of the tax assessments. The tax assessments in dispute have been validated by this court and the Supreme Court. The same question cannot be revisited, in my view. The decision by this court was final, in the absence of an appeal. Further, the decision made by the Supreme Court, upon appeal, is final in nature. The Supreme Court is the final court of appeal in all non-constitutional matters. The two decisions of this court and the Supreme Court involve the same parties. In my view, the five arguments advanced by Adv Mpofu are not merited for purposes of issue estoppel. The first argument that the tax assessments are not final in nature is no longer valid in light of the fact that such tax assessments were validated by this court and the Supreme Court despite some adjustments which were made thereafter. All tax assessments sounding in foreign currency were held to be valid by this court and the Supreme Court. Hence, the second leg of Adv Mpofu’s argument is not merited. When this court and the Supreme Court validated the same tax assessments, this court and the Supreme Court were aware that the Applicant had made some payments in local currency contrary to the legislation. Therefore, the third argument raised by Adv Mpofu is not merited. When this court and the Supreme Court validated the same tax assessments, the incomplete portions were available in the tax assessments. This is not a new development in my view. Resultantly, the fourth contention raised by the Applicant against issue estoppel is irrelevant. The Respondent’s desire to refund the amounts paid by the Applicant in local currency is a clear reflection that the Applicant paid excess tax in local currency. This excess amount in local currency was paid by the Applicant following the Applicant’s erroneous interpretation of the tax legislation, a point which was elaborated by this court and the Supreme Court. The dispute which was before this court and the Supreme Court was whether the Applicant paid all its tax in foreign currency. The excess tax in local currency was only paid by the Applicant in respect of transactions concluded in foreign currency. This behaviour was held to be contrary to the legislation by this court and the Supreme Court. For this reason, such refund cannot defeat the doctrine of issue estoppel raised by the Respondent against the present application. To this end, the last argument raised by Adv Mpofu is misplaced, in my opinion. In the circumstances, I am of the view that the present application is unmerited. The Applicant seeks to abuse the court process. The point in limine of issue estoppel must resultantly be upheld. There is no need for me to make a determination on the rest of the points in limine, therefore. The application must be consequently dismissed with costs. Costs ordinarily follow the outcome. No submission was made on behalf of the Applicant to persuade me to have a departure from the usual practice. In the result, it is ordered as follows: A. The point in limine of issue estoppel be and is hereby upheld. B. Consequently, the application be and is hereby dismissed with costs Deme J :................................................................ Gill Godlonton and Gerrans, applicant’s legal practitioners. Kantor and Immerman, respondent’s legal practitioners. 1 https://www.lexisnexis.co.uk › legal › issue-estoppel 2 HH744/22. 3 1996 (1) ZLR 415 (S), 4 Quoted by KHOSA JA in Willowvale Mazda Motor Industries, supra, at p 421 – 422 5 CCZ9/19. 9 HH 294-25 HCH 1696/24 9 HH 294-25 HCH 1696/24 DELTA BEVERAGES (PRIVATE) LIMITED versus ZIMBABWE REVENUE AUTHORITY HIGH COURT OF ZIMBABWE DEME J HARARE, 5 November, 2024 and 7 May 2025. Opposed Application T Mpofu, for the Applicant. S Bhebe, for the Respondent. DEME J: The Applicant initially approached this court seeking a provisional order. In particular, the provisional order is couched in the following way: “TERMS OF FINAL ORDER SOUGHT That you show cause to this Honourable Court why a final order should not be made in the following terms: 1. The provisional order be and is hereby confirmed. It be and is hereby declared that the Respondent shall complete the audit process taking into account all the ZWL transactions including payments made to it by the Applicant for the tax period March 2019 to October 2021 and shall thereafter issue final assessments. 3. The Respondent shall pay the Applicant’s costs of suit. INTERIM RELIEF GRANTED Pending resolution of this matter on the return date: Pending the return date, the Respondent be and is hereby interdicted from instituting or pursuing any and all collection measures and garnishing the Applicant’s accounts for the tax period March 2019 to October 2021. SERVICE OF THE PROVISIONAL ORDER The Applicants or their legal practitioners or any employee thereof shall be authorised to serve a copy of this Provisional Order on the Respondents.” On 21 June 2024, this court granted, by consent, an order for the removal of this matter from the urgent roll and consequently referred the matter to the opposed roll with some directions. In particular, the order by this court is as follows: “1.The matter be and is hereby removed from the roll with the following direction; The matter be and is hereby referred to the opposed roll with the following further directions; Respondent shall respond to applicant’s further affidavit within 10 days of the date of this order. Applicant shall file its heads of argument within 10 days of service upon it of respondent’s further affidavit. Respondent shall file its heads of argument within 10 days of service upon it of applicant’s heads of argument. Applicant shall set the matter down within 10 days of service upon it of respondent’s heads of argument. Respondent shall not effect recovery measures against applicant for the 2019 to 2021 tax period. Applicant shall continue making monthly payments in terms of the payment plan currently in place and agreed to by the parties. 2.There shall be no order as to costs.” Thus, the matter was eventually turned into an ordinary opposed matter by virtue of the order by this court. The Respondent, after assessing the Applicant’s tax liability for the period ranging from March 2019 to October 2021, issued an assessment which notified the Applicant of its outstanding tax obligations. The Applicant is of the view that the tax assessments issued by the Respondent are contrary to the provisions of the Value Added Tax Act [Chapter 23:12] (hereinafter called “the Value Added Tax Act”). Pursuant to the assessments, the Respondent threatened to garnish the Applicant’s banking account as a collection measure of the Applicant’s outstanding tax obligations. According to the Applicant, the acts by the Respondent is unlawful. The Applicant is of the belief that the essential elements of the application for interdict are satisfied by the present application. In opposing the present application, the Respondent raised some points in limine against the final relief sought by the Applicant. Firstly, the Respondent is of the view that relief sought by the Applicant in the present application is incompetent. According to the Respondent, the relief prayed for by the Applicant compelling the Respondent to complete auditing and issue a tax assessment thereafter is incompetent. The Respondent is of the belief that it completed this exercise. The Respondent further claimed that the Applicant objected to the assessments done by the Respondent before this court. The objection was dismissed on 25 October 2023 under Judgment Number HH577/23. Additionally, the Respondent further argued that such assessments made can only be altered by the appeal court and not by the same court. Inviting this court to revisit its decision is unlawful, according to the Respondent. Related to the first point in limine, the Respondent raised the question of issue estoppel against the present application on the basis that the matter was finally and definitively resolved by this court and the Supreme Court under Judgment Numbers HH577/23 and SC62/24 respectively. The Respondent claimed that the present application is improperly before this court on this basis. By way of a third point in limine, the Respondent argued that the Applicant failed to exhaust domestic remedies. The Respondent alleged that the Applicant approached the Ministry of Finance and Economic Development with a view to get concurrence for liquidation of its tax liabilities through treasury bills. Before finalizing the negotiations with the Ministry of Finance and Economic Development, the Applicant approached this court and according to the Respondent, this act flies against the spirit of exhausting domestic remedies. The Respondent is of the view that the Applicant ought to have waited for the response from the Ministry of Finance and Economic Development. The Respondent further maintained that it did not garnish the Applicant’s bank account pending the outcome of such talks. I will proceed to make a determination on the points in limine raised by the Respondent. The second point in limine, in my view, has the potential of disposing of the matter before this court. In this respect, I will start by making a determination on that point in limine before dealing with the rest of the points in limine. Responding to the issue estoppel, Adv Mpofu argued that the relief sought is properly before the court on the basis of five factors which he advanced. Firstly, he claimed that the assessments were not completed by the Respondent at the time of the alleged issuance of tax assessments. According to Adv Mpofu, the Respondent kept adjusting the tax liabilities payable to the Respondent. For this reason, Adv Mpofu contended that issue estoppel is inapplicable under such circumstances. Adv Mpofu further argued that after the final assessment, the Respondent cannot make further adjustments. Reference was made to the letter on pages 49, 83, 90, 96 and 99 of the record. The counsel for the Applicant further argued that the tax assessments are only sounding in foreign currency. The Applicant, in its relief, prays for an order that the Respondent must be compelled to make assessments of the tax liabilities payable in local currency. On this basis, Adv Mpofu argued that the point in limine of issue estoppel is defeated by this factor. Thirdly, Adv Mpofu contended that the Respondent, by accepting part of the tax in local currency, the Respondent will be unjustly enriched if the excess tax paid in local currency is not revalued. Hence, the tax in local currency must be revalued to reflect the value of the amount paid at the material time, according to Adv Mpofu. Fourthly, the counsel for the Applicant maintained that the tax assessments issued by the Respondent are incomplete in certain portions of the appropriate Form completed. Lastly, Adv Mpofu argued that the Respondent wishes to refund the Applicant excess tax paid in local currency after the alleged final assessment. According to the counsel for the Applicant, the Respondent’s conduct by refunding the excess tax paid by the Applicant is a sign that the tax assessments were incomplete. On this basis, Adv Mpofu submitted that the point in limine of issue estoppel will not apply. Arguing in favour of issue estoppel, Adv Bhebe referred the court to p 16 of the Judgment Number SC62/24, where the Supreme Court remarked as follows: “It is therefore apparent that the validity of a notice of assessment does not depend on the minute details of the internal wording of the notice. A correct description of a notice and the inclusion in the notice of the key requirements of a notice specified in ss 2 and 51 (2) of the ITA validates the notice. Sections 2, 51 (2) of ITA and s 31 (5) of VATA do not concern themselves with the, details which can be found in a notice other than the specified aspects. It is therefore, my considered view that the inclusion of the words “gross tax” inside the notices does not invalidate the notices of assessment since all the requirements of a valid assessment have been met. As a result, the appellants’ argument that the notices of assessment are invalid because the respondent used the term “gross tax” in computing details in the notices is not correct” The question which, therefore, exercises my mind is whether the point in limine can be sustained under the present application. Issue estoppel arises where: “a particular issue(s), forming a necessary ingredient in a cause of action, has been litigated and decided in a first action.1”. Thus, this court in the case of Matingo v Humbe2 concluded that issue estoppel is a species of res judicata. More, particularly, Mafusire J, in the case of Matingo v Humbe supra held that: “Issue estoppel is a species of res judicata: see Munemo v Muswera 1987 (1) ZLR 20 (SC), at p 23C.” It is apparent that issue estoppel is not part of the Roman Dutch Law but was borrowed by our courts from the English Law. Reference is made to the case of Willowvale Motor Industries v Sunshine Rent-a-Car3, where Khosa Ja propounded the following remarks: “While the doctrine of issue estoppel may not be part of the Roman-Dutch law and may not as yet have found a berth in South African law, it seems to me that this court, in the wider application of existing law in the light of current modes of thought, has found the artificiality of limiting estoppel to the same subject to be unproductive of justice, and has embraced the doctrine of issue estoppel under the general rule of public policy that there should be finality in litigation.” The requirements of issue estoppel, are therefore substantially similar to the requirements of res judicata. Mafusire J, in para 9 in the case of Matingo v Humbe supra postulated the following comments: “[9] In another English case of Carl Zeiss Stiftung v Rayner & Keeler [1976] 1 AC 8534, the three requirements of issue estoppel were identified to be: that the same question has been decided; that the judicial decision which is said to create the estoppel was final; and that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which estoppel is raised.” In summarizing the relief for the Applicant under Judgment Number HH577/23, Mafusire J, in para 1, commented as follows: “[1] The applicant seeks a declaration of invalidity in respect of additional income tax assessments for the tax years ended 2019 and 2020. It also seeks another declaration of invalidity of the additional value added tax [VAT] assessments issued against it by the respondent for the period March 2019 to October 2021. It claims costs of suit on an attorney and client scale against the respondent.” After hearing all the submissions, Mafusire J, in para (s) 46-8 of the Judgment Number HH577/23, superbly remarked as follows: “[46] However, none of what the applicant says changes the character of the levy or penalty from being anything but a tax. It is manifestly the intention of the legislature that penalties or additional taxes levied on tax payable in foreign currency are also payable in foreign currency. Section 4A (7) of the Finance Act, in paraphrase, declares that for the avoidance of doubt the provisions of the Taxes Act shall apply, with such necessary changes as may be necessary, to the payment in foreign currency of the taxes in the same way as they apply to the payment of such taxes in Zimbabwean currency. [47] The South African case of McNeil above is not relevant because, firstly, the language of the tax legislation that the court was considering in that case was subtly different from the language of the tax legislation presently under consideration. In regards to the additional tax payable for a default, the legislation in that case simply referred to “… an amount equal to …”, whereas our legislation specifically refers to “… an amount of tax equal to …” Undoubtedly, this is to stress the fact that the additional tax is a tax. Secondly, Counsel is guilty of selective quoting. The court in that judgment started from the premise of accepting that additional tax is a tax, albeit of an unusual kind. Thirdly, the focus of the court in that case was completely different from the focus in the present case. The focus in the present case is whether penalties on default of a tax chargeable in foreign currency are also chargeable in foreign currency or local currency. In that case the focus was the examination of whether or not a penalty is a tax. Our legislature deems a penalty on an outstanding tax as a tax, admittedly, of an unusual kind. [48] All the objections by the applicant to the additional assessments by the respondent in respect of the tax years in question lack merit. The application is hereby dismissed with costs.” This put to bed the arguments and the objections raised against similar tax obligations payable. More fundamentally, this judgment declared that the tax assessments issued by the Respondent are valid. Dissatisfied by the decision of this court, the Applicant approached the Supreme Court by way of appeal on the following grounds of appeal: “The court a quo erred at law and misdirected itself by failing to consider and determine material issues raised by the appellant, thus rendering the proceedings grossly irregular. In particular, the court a quo failed to consider and determine the following issues raised by the appellant: Whether there is a penalty for payment of taxes purportedly due in foreign currency in the local legal tender, and what that penalty is? Whether the apportionment formulae used by the respondent exists in the taxing Act, and if so in which provisions of the taxing Acts? Whether the formulae used by the respondent in computing both income tax and VAT was rational, and possible to comply with? Whether there is a constitutional bar to the respondent utilizing s 4 (A) (7) of the Finance Act and s 38 (9) of the VAT Act to amend primary legislation? The implication of the contra-fiscum rule to uncertain tax legislation. The court a quo erred at law and misdirected itself in finding that the assessments issued were valid at law when such assessments referred to a line item described as “gross tax”, which ‘gross tax’ is not included in any taxing statute and is not a necessary component in the computation of taxable income. The court a quo erred at law and misdirected itself in finding that the jurisdictional facts to issue additional assessments were present permitting the respondent to issue additional assessments on the appellant. The court a quo erred at law and misdirected itself in finding that the appellant was not entitled to deduct its input tax on purchases made in foreign currency and in ZWL from its output in foreign currency. The court a quo erred at law in finding that penalties were chargeable in foreign currency, this despite neither s 4 (A) of the Finance Act nor s 38 of the VAT Act providing for the charging of penalties in foreign currency. The court a quo erred at law and misdirected itself in applying s 4 (A)(7) of the Finance Act and s 38 (9) of the VAT Act through the instrument of public notices in such a manner that they permit the amendment of primary legislation by institutions other than parliament, which is unconstitutional and therefore unlawful.” After assessing all the Applicant’s grounds of appeal, the Supreme Court unanimously dismissed the appeal. In particular, the Supreme Court, under Judgment Number SC62/24, held that: “We agree with the court a quo’s observations. In terms of s 46 (1) (a) (i) of the ITA a penalty is referred to as “an amount of tax”. In terms of s 46 (1a) of the ITA a penalty is referred to as “additional tax”. Our law therefore differs from South African law whose legislation is different from ours. Therefore, the case of DFC of T v Fontana 88 ATC 4751 is not relevant in the determination of this case. From the definitions of a penalty in terms of s 46, it cannot be denied that a penalty is a tax. In this case, the respondent imposed additional tax (a penalty) on the appellant after it had breached the duty to pay tax payable in foreign currency. The court is satisfied that a penalty for any outstanding foreign currency tax is payable in foreign currency and it also follows that a penalty on any outstanding local currency tax is payable in local currency. Therefore, the court a quo’s decision is correct. There is no irregularity or irrationality in the court a quo’s determination of the application placed before it by the appellant. DISPOSITION The appellant’s grounds of appeal have no merit. Costs shall as is the norm follow the result. It be and is hereby ordered that: ‘The appeal be and is hereby dismissed with costs.” The judgment by the Supreme Court under Judgment Number SC62/24, apart from being final in nature, is also binding to this court as this is a decision by a court which is superior to this court. The concept of inferior courts being bound by decisions of superior courts is ordinarily called stare decisis. In the absence of any good cause shown, this court has to be bound by the decision of the Supreme Court regardless of the hardship which may eventuate therefrom. Such a decision cannot be subjected to further examination by this court in terms of the stare decisis principle. The doctrine of stare decisis was appositely explained in the case of Denhere v Denhere and Anor5, where the Constitutional Court elegantly pronounced that: “stare decisis” are Latin words which mean that things that have been decided should be left to stay undisturbed. The meaning of the doctrine of stare decisis is that when a point of law has been once solemnly and necessarily settled by a decision of a competent court it will no longer be considered open to examination or to a new ruling by the same tribunal or those which are bound to follow its adjudication. The doctrine of stare decisis is therefore a rule of precedent or authority, addressed to lower courts and members of the public who are decision-makers, to the effect that decisions of the higher courts on particular points of law presented to and passed upon by those courts are law. Lower courts are bound to obey them in similar cases in future until they are overruled, even though a rigorous adherence to them might at times work individual hardship.” In my view, issue estoppel can be sustained under such circumstances. The essential requirements of issue estoppel are present in this case as outlined in the Matingo v Humbe supra. The relief sought by the Applicant seeks to indirectly challenge the validity of the tax assessments. The tax assessments in dispute have been validated by this court and the Supreme Court. The same question cannot be revisited, in my view. The decision by this court was final, in the absence of an appeal. Further, the decision made by the Supreme Court, upon appeal, is final in nature. The Supreme Court is the final court of appeal in all non-constitutional matters. The two decisions of this court and the Supreme Court involve the same parties. In my view, the five arguments advanced by Adv Mpofu are not merited for purposes of issue estoppel. The first argument that the tax assessments are not final in nature is no longer valid in light of the fact that such tax assessments were validated by this court and the Supreme Court despite some adjustments which were made thereafter. All tax assessments sounding in foreign currency were held to be valid by this court and the Supreme Court. Hence, the second leg of Adv Mpofu’s argument is not merited. When this court and the Supreme Court validated the same tax assessments, this court and the Supreme Court were aware that the Applicant had made some payments in local currency contrary to the legislation. Therefore, the third argument raised by Adv Mpofu is not merited. When this court and the Supreme Court validated the same tax assessments, the incomplete portions were available in the tax assessments. This is not a new development in my view. Resultantly, the fourth contention raised by the Applicant against issue estoppel is irrelevant. The Respondent’s desire to refund the amounts paid by the Applicant in local currency is a clear reflection that the Applicant paid excess tax in local currency. This excess amount in local currency was paid by the Applicant following the Applicant’s erroneous interpretation of the tax legislation, a point which was elaborated by this court and the Supreme Court. The dispute which was before this court and the Supreme Court was whether the Applicant paid all its tax in foreign currency. The excess tax in local currency was only paid by the Applicant in respect of transactions concluded in foreign currency. This behaviour was held to be contrary to the legislation by this court and the Supreme Court. For this reason, such refund cannot defeat the doctrine of issue estoppel raised by the Respondent against the present application. To this end, the last argument raised by Adv Mpofu is misplaced, in my opinion. In the circumstances, I am of the view that the present application is unmerited. The Applicant seeks to abuse the court process. The point in limine of issue estoppel must resultantly be upheld. There is no need for me to make a determination on the rest of the points in limine, therefore. The application must be consequently dismissed with costs. Costs ordinarily follow the outcome. No submission was made on behalf of the Applicant to persuade me to have a departure from the usual practice. In the result, it is ordered as follows: A. The point in limine of issue estoppel be and is hereby upheld. B. Consequently, the application be and is hereby dismissed with costs Deme J :................................................................ Gill Godlonton and Gerrans, applicant’s legal practitioners. Kantor and Immerman, respondent’s legal practitioners. 1 https://www.lexisnexis.co.uk › legal › issue-estoppel 1 https://www.lexisnexis.co.uk › legal › issue-estoppel 2 HH744/22. 2 HH744/22. 3 1996 (1) ZLR 415 (S), 3 1996 (1) ZLR 415 (S), 4 Quoted by KHOSA JA in Willowvale Mazda Motor Industries, supra, at p 421 – 422 4 Quoted by KHOSA JA in Willowvale Mazda Motor Industries, supra, at p 421 – 422 5 CCZ9/19. 5 CCZ9/19.