IN THE HIGH counr OF TAI'JZAIUA AT Al.l.USi-L'-1. .. CIVIL CASE NO, 22 OF 1998 H/S SOFA MAJ.AGEMEN'l' LTD• ...... • ••••• • PLAINTIFF Versus THE TANZANIA REVENUE AUTHORITY DEFEl\IDANT RULING N,M. MU,srn:. JUDGE. The· Plaintiff; M/S Sopa Hanr'lgement Ltd.? has· instituted proceedine;s in this court. against the Defendant; The Tanzania Revenue Authority ,,--. 1 challengLng. the ccrnputations and liability t~ pay taxes on; J j '· ,. -! ' (i) Hotel Levy, t. (ii) Sa.J.es Tax,· (iii) Stamp duty and (iv) Car benefit ta.,'C. The Plaintiff pra;ys for the. followin;;: reliefs:- 11 REA30NS l'IIIER.EOF: The Plaintiff pray for judnnent and Declaratory (i) That the claim for 3ales Tax beyond Hay~ 1994 .is time barred., (ii) (iii) (iv) (a) That prior to tl1c finance Act No. 2/96 the Plaintiff · i.va.s · exempted. frcrn 3tamp duty on foreign· receipt. (b) (a) That stamp duty is to be levied on the·actual .receipts and not turnover. That the Plaintiff is exempted frcrn paying car benefit' ··t~~ (b) That. in. the alterm.tive the penalties imP,ed on (a) (b) (c) car herifit ta,'{ arrears are illegal, That_ .accornrn.odation l)rovided for to the Drivers:.a,t · the. drivers dm1nitory is not subject to Hotei ·Levy. That service charc;es are exempted in calculating Hotel Ley-y. That compl:irnentar:Le:3 2-nd trade discounts does not attract Hotel Levy, ( d) That the joini:, verified turnover be used as _a basis for computing taxahle value for Hotel Levy ·purposes • ... ,. . ••• • /2 ...

2 ( e) that Hotei Levy charged on guest should not frcm part of the normal charc;es liable to Hotel LeV'Jl ( v) ( a) That inanagement cove1· should not attract saie~ tax~ ( b) Picnic boxes should not be subjected to sales tax~ (c) (d) .. That Breakfast f3houlcl. not be subjected to sales tar;:. That service charges be e~~cluded when calculating so.J.es tax: (vi) That any_ Tax arrears accru:Ln{c; betv, 1 een the January, 1993 to date of jud@'ilent should not carry penalty. (vii) That the fj 1 ndings and repo1.'t .s thereof arising fro'll Tax audit exercise concluctecl by thl! Defendant on the Plaintiff Accoun:i:,s ( annextures 30PA - 1, f-301}. 2 and SOP.A - 10) be deblared null and void. ( viii) That the Plaintiffs books of accounts 1 now with the Defe.rniant be released back to the ?laintif:f. (:ix) Costs of this action be provided. (x) Any, o\her or further relief as the court may deem just in the circumstances of this case 11 • The Defendant has filed its vir:Ltten statement of deferice. in vibich a number of prel:i.:ninary legal points have been raised by way of notice .. ,.,f objection. The same read as follows:- 11 TA1';:E i10rICB that on the first clay fL's:ed. for the hearing of the suit the Defendant shall raise a J)reliminary objection that the suit be inimediately dismir,oeJ. ii:i.th cost[-; for being incanpetent ancl that this Honourable Court lackr:, the re¼uisite jutisdictj_on to entef.tain the same., on the foJJ..o"t;,ing grounds:- • .. .

1. Tlat T;Jith resi)ect to Hqtel Levy the Plaint,iffi s suit 2 .. is jfncornpten.{Jas ·this· cou:ct hsis no jurisc1:i.ctioh to . 1i.tEirta:Cn .the ::;i.spute beco.use the jurisdiction of this .' Hcii{ou-r:able Gqurt is specifically ousted undei" section 6 .(2) of .the Hotel Lev"Y Let, 1972 and no appe,al has been made to the Minister. Ti1at w:i.th further respect to Hotel Levy the Plaintiff Is suit is incompetent ao it has been filed without first o:Jtaining leave of this Honourable Court 1~equ.esting it to assume jurisdiction in :.:·elation thereto. That 'l>Jith respect to s,3.les ta.'C. the Plaintiff ls suit is time barred. as, ~?ntrai;: to section Li.7(2) 1 it was filed ~. • •• /J J

t 'i• ) .3 after the expii.·y of r..inety days from the date the Commissioner I s decision i'k s notified to the Plaintiffs. h.. That with respect to stamp duty the Plaintiff I s suit is inccmpetent as no suit can be instituted in this Honourable Court save by -.iay ·of a case stated refefi•ed to .this· Honourable Court by the Stamp Duty Gmmissioners in accordance with section 67 of the Stwnp Duty Act 1979. That the suit is bad at lm1 for misjoinder oi' causes of action as it lumps in a oinu;le suit foUr distinct disputes relating to four differet1t ta:;rns each charged. under ~ separate statute, ancl. each subject to a different procedure for adjudication of dispute. The suit is also a misjoinder as there is no common qu.e.stion. of la1rJ and this Honourable Court· has not gr-anted leave for the consolidation of the different causes of action as broue;ht. 11 ·. . . ~ ·.·, . . . . This rulinc; is in respect of these prel:i.mina.ty objections.·' .:i;t is prpposed to start tt1:i.tl1 ob,jection No. 5 regarding misjoinder of causes of action. If the objection is upheld~ then the whole suit 1r1ill be affected and it may then be not necer,sary to deal with the rest of the objections 0 Learned. counsels, rh·£ Kibuta and Mr.· Haro 1 ar 6 ued the issues for the defendant and.plaintiff respectively.· Arguing'the issue of n:Lsoinder 1 learned cou;-isel) Hr. Kibuta) stated that the Plaintiff l.i.as disputed all four taxes in a sine suitQ He said that each taz. liability is charged on a different act of Parliament and administered by_ a different C<Y.ni,1ir;sioner. .According to him for each tax tb.e commiGsioner exercised veTy specific sta.tutory p1'Wers. In the counsel I s viet'lil, it =i;s not permissible to lump together in one •suit four different, -causes of /3.Ction arrising from distinct transactions governed by 0.istinct .. statutes.. Accord:l.ng to h"i..m, it offends the pr_evisions of Order 2, rule .3 ( 1) of Civil Procedure CCY'le v-ihich for ease of . .reference reac1.s:- 11 3.-(1) Save as oth(!;rwise provi<..le,).; a Plaintiff may unite ir-i. the, snme suit several -causes of action against the same defendant 1 or the same defendants jointly; and aey plaintiffs havinr causes of.action in uhich they are jointly interested agains~ the same defendant. or the same defenda.nt,s jointly may \mite suci~~- causes of act~on in the same suit. II Learned couns0l continued to say that joinder of different causes of action is only permissible whei"e there is a common point involved or where the causes of action arise i.'ro,·,1 the same transaction. Counsel st4tcd .further that in this particular case the court is invited to ••• /4

.. == l+ concider:. dispute relating to Hotel Le-.ry 1 sales tax, stamp duty and. co.r · . bene:f.i.t;, __ tax+- wHic8.'1.:ti his view can: not· be regardec~ to ,have arisen from

• - . the ili~~ ·trar;saction. Learnec1 counsel. submitted tl-iaE''the suit is sufferin:_1; from iricurabie disease of rnisjoinder and it· shoui<l be st::..·uck Learned coup.sel 1 Mr. Maro 1 in :ce:,lY stated that Order 3-,,( 1) of Civil Proced.ur_e ,C.ode: permits a lja1.•y to unite in the same suit several causes b:f_ actfoh ·(:;a_inst the ,same defendants 1,here all the clefendants are interested in all of the causeG of' act.ion •. According to Mr. Maro 1 in the present suit; the ;)efendant is involved. in all the causes of action an{c :Ln the same capacity •. JUternatively, Hr. Mctro, state·d that Jhe_, co1.u·t may order· separate t:dals· uri.der Order 2 rule ·6 1 if the j~~mlsJsin of counsel· for the JefoncJ.ci.nt_ is upheld 1 · if the court consiclers that .t1: pauses of action can not convln.:i.ently be tried in one suit •. _... .By and 1ai, ce ,' both cour1sels are correct- in 1 their sutmissions on poj_nts.iof, Im-i.- ··The characterist:'l.cs qf the· suit before the court, are covered: unciei 1ui~·-3( 1) ·of Order 2 c_:uotecl abo- ✓ e •. The suit is against, The Tanzania 1 'J.levnue At'itl1ority -i.1l1::.c;:1 acl.ri'd.aj._ters tl1e. ·four different taxe1 ·, ioe. IIotel- lev+J;· sales tax, stamr1 duty ,and cm 1 benefit tax •. It is true . .. that there. is.- i;3. distinct act cf I'arliarnent for each tax and each is adrninistei".ec1. by different comr.1i;:mioner s in a distinct. mechanism i but all the Saii1e ,.it is Tanzania ilevenue Authority -ihich is finally respo- nsible fo::., the ad.ministration of all the acts relatinr to the taxes an.cl the, comrnissioner_s are mere limbs. ;'.iocondly 1 it ap)e.s.rs to me that all the .foUi. 1 .ta:;es -which a:r.e oeini:·, cl2-1J·,1ed by Tanzania .cwvenue Authority have arisen fl•om the_ same. transae:t:i.on on the part of the Plaintiff., Uhat really atractecl ?}.l t;1ese ta;;es i:3 the Hotel busness of runnine, lods:es 1 COii1i:1Qtl.ly call;d SOFA Lod;:,,es - Th.is is clearly spelt out in 1 Jaras 3 &· 7 of the Plaint trJhich rea!..l as follms :- ''.3• · That from the Februory 7 1992 the Plaintiff Company has beeri runninK an:.:. man.J. 1 ) .. 112; three lodges namely 1201.·on;:;oro Lodse, Jerea;-_seti Lodii;e and Taranrire Lodge, the thr.ee lod.Ges are ccrn,;wnl.y known as 3QPA Lodges, •.••. 0. /5

7 • That bn the 6th clay of June, 1997 the ;]efendant Auditbrs t'.'1ho cairied out the purported Tax Audit e;rnrcise informed t1e : ✓ laintiff in writin~ that after the said exercise the Plaintiff had. an ou_tstiinding tax liability b;:,r way- of Hotel Levy, Sal.es: Tax -on meals, stai-n~) duty, Sales Tax on Laundry and Penalties thereof etc. in the sum of shillinis 4,422,6,i3.1 7 l+l~/"""• A.:copy of a surrunary of the total-· l~.ab_:L.lity,a provj_ded by tb.e Defendant is annexed hereto and marked as anne:;i:ture cOPA 1. 11 This is conceeded by the Je.fe1iclant iri Jara.:.,raph 7 of the amended staterncni:, of defence which for .ease of reference reacls: .... ~ . . ' .... , ,-7 .. ,_q?hat., sa_ve !fJ9r the r:ate of -communication of the conrn;Lssioner I s decision to chart;e the Plaintiff the •! rlaintiff tlie co11"e'ct ar,1ow1ts of taxes and dutis disc-9v;(;lr-ed to have been not :::-aid and outstanding - . . parao;raph 7 thereto is c:.is:t;uted. The lJefende.nt ·-overs that after the coi",1)letion of the audit and . investigation exerc:be op<.1. as a result of uncovered findings the pro.Jer of'.fic(?:N; 1-1it;1 re0pect to the va1ious taxes mad.e the follm-;inifdecisions: ( a) Tt the PleJ.rrt,iff l1ad u11de1....:dc'clared ·te-ceipts for the purno;,es of IIotel Levy and thereby .... · ,. 1- . . . . . und_erpaid .. "the l0t·? by ·Tshs •. 953, ?91 7 1~~00-; ( b) . 'flt 'lne ;:,laii1t.iff Has under ·ue Etel Le;/ _ .. ·-: :Ac-t,:.:1Sl72 su:)ject to pa;y1nertt .. of -~1erialtiyi- ~n:· ·· the agt,regatc Slli,1 of Tshs. 2! 1+1+11 866, 690·.oa, (d) (e) ( f)

• • 'r,..~ ., • ~ ' • Tr0t _he Pla):ntiff l·1a:.1. .ul"",der.statecl salec tax· ·charGeable on meals 11;/· su.':1 of Tshs,16:764 1 950.00i Tl'$t under tile Sc.1J.es Tax Let, 1976 the Plaint,iff wae subject to ::.•ayinent, of penal:t,ies ir!.e a.;gre-gate sum ·of 'i':,::s. 5721 84-1; 884.00, That the: Plainciff i,.aJ. u:con;fully omitt~~ toJ;>.§3.Y · sals "tziC oh lau:1.6.ry services in the sum .of .. .. ...., ..... Tshs •. 2 1 647, 570; OOi . • . ·y That under the ·Gales Tc.:;;: Act, 1976 t,he Plt.iff wo.s -bject to iJa;')nent. of ;:;en.:D.ties_ in t,~~~?;ijgt,e - of Tshs. 2,.331 1 14-100; .. , .... that t11e Plaintiff hall urn:i.erpaid stamp duty "by Tshs li2,_200 1 o<;O.OO; and . :.. _ _; ,, · That under the 3ta:r:i :)uty Act/ 197Z t,he,·P,laintiff ;- < , • .; - ,,, f ........ i'las ·subject to payment Tshs. 1+7,989,_36500. 11 of pena1iies in ihe sun, of , - ........ • ,.; ·'1.•

6 For tl1ese reasons, the· object:'c.on on misjoind.ei· is overruled~ It woulc., in my vj_ew 1 be neater to file separate suits for each tax and . . . - - , ... - t • '. • ! ap)lY for:>ctineb-:tJ.~~0 at t,WJ t:r:t&l + 'Tlus i$. beqausey :v.erl(· n,_'.td.s suit, ev-j.denci 1 !\¥8)':fk. \r:thtfii:t;; · fr -~~'i~=:·fax·'.1tif~-g~{ri. ~ ,., ~ .. • . ;;, . ./.:... .. .\ ~ i ·.:: ';( '\ ,.l.;!'k .. I .! . . ·;._·(.,;. In nm·i tur.p.-to-1-J:.d,l;if,l:i.n·i'.,9-j-99,tiqr}. i'io ..... 1 r.iF,(tji;iii, JWi.diction :),,J -..,V :.-·) , .:.! .. '\jc:' .J..i..,, ;.- :: -..,.,.J- ... ,• :· :• • .: I J.d " J.,_ .'.t. ,J .... 0 l,.. 1,.-. ', ,.,; } of the court in.;ri:lp1ct. w:i. th -lci'Ecl idvy.1 ; •riearrieriGll.,ihteJ,1r!·Mt-, 'Kibuta, · _,i•.. ·. . . . ....: . . , . ·,. -:• ... . - subrnittecl the.V-f ;.tt~'-1,i,"il:scfictiori tdi•Bef;l-'"i:Jru,,tf,ft'be {su)it because it 1c;~~~o~!:/ ;-fo-Lr- ~:1u_;i ·:·t;?, :~?-r~~~; ~~~:j-urisdiction ·.=-:"'·C...: , • - ... ..:_ '.,.i J'i:.; \ 1;1-1 •-'·:J.A.c .. ~' ." .• Learned counsel ~~bmj.j:;t,e~~~ sec-t:i.on 6 (2). of ·.Act No, 23,f?f 19?2, is to ,c,o.c:. .-,-: · .. 1i 6-( 2 fffY ·fe~;,?-f'.er'11n'.t, nracle by i:.be Coiss:b:-Jne1· undef this sectihlw·'!3·hlt(i' ~ 1 1'-.5ili: abt sCb.11 not be· bject t,6 :t'e'view by any cp\lrtror. other. autl1ority; _ . .!. t),, ~ 1 l . • . . ... _ ;":· :...:,-'.,\1: ·.-:i·::u.:· ?rovidec.iei-w.t: a,_n-. ro;ner.,::~~rfov:ed ,by .. :3-ny •. SlJ;,.y:l':l_;;:, p.,,: requireme.o.:t may clia'181,i~.e, <t()1inst to. :the {!i-ni$;i:ier,;,,,hoGe <lecidcin on a.,, sud~- ai.:ii;eq.l ;jl1a]J, be fnal .c..rrl._. c'?nclusi-ye,: 1 ' -.~~J.i.'-,:~~t-~~~~~~ .. lr:-. .. :..:.l)u;.i /)'·:-_' · < · ~~ . .f .. JJ.i.,·:~ 1~·i t·.:•f:_-f · . .. t~ .. :rl:.:.- an ouoter cloS:,;.tfe)tIOt,J;; ;,t,.li:·i;i.;i;.ctJ.o[l .Of t,,hp ·COQti,~ ( '' 1 , According .. , ...... ., , , . .• ' .. :_ :', • l l( ', ~ . ·)l .. " .: 'i . . ... ! :.. t, tl.is section, ,tf-ie ic1_et':±sion of t.:,c commissotiei 1 •is"Ti'tlru.·Jaru:1 shall not be subj0ct to· 1:"ll3:vieir by any cour·t .Ol." other authority, However any person at9-·i~\ert- by th7;·t~'rnrni~;i;nir Is decision may appcai t,o the . ' Hinister for. Finance •. .Counoel, Ii:i'.)ut,a stated. that according to the . w ... . 'fl,' , :j, . ; • pleac:.in;;s of the Pl{iintiff they m'e <.1.is;uting the asses.sment of Hotel ' .s • ' . ,I/ • • ... ' • ., ~ ~ .. Levy o.s acs0;:,sec. .by-;: the Def:eru:'.a.nt, an:.1. accord.in to him. thi.s court 1-;.as , • ,.-.i.--.;.. :-#,.-. ~ .~ . . ',4' ' . ' ,. .. no ,jurisC::..ictlOrt t,o -eriti'wd- the :ilaintiffi s complaint LearneJ. counsel) H~\i~·c 7 lJd.le co.o.ceei.linG to t,he finality clause under section 6· '(2f oT the Jct 1 in 11:i.s view,· hot1ever 1 the dis;,ute , 1 .oes not t.1 1 i:.:;e -un.de~;tlt seQtioh'. Acco;.•r'.inz to him that clispute arises unc'::ir SGCt:;_t·'i;°bf t'hc .. :s'am·e· act..·-· n:..·. Haro stated. tha· thefe ore t-., ways of coJ.lectin~ Hotel Levy.,, Ono uD.y is by Hotel Accomr,1o<lation 1,1Iacll ..., ..... - .. -, is loviecl unc.lef section: c~- 'The othc:;,.·_ l',ay is, und.e,-r section: 6 ( 1) where .. .,,.,, ... ,." . the coi:n:.1issioner may pro"Q..clt. an altcrna.tivG method of eollectnG i..; .--·--· ----:,-.· .. ,,,;,: ...,· :':.·3.:;· hotel levy.- -1.r .-)faio, ar 1;;U:e.cl· tl12.·t. .tl,rn.'c is a di®inCtion· 1'etwcen levy ...., .. ,, ,....... -- - - . ' . . . ' under :::iection I+ .a.i1d section _6 an.'. thc:I:. the <list,:Lnction is· :ba.5ec, on .,..,. to 'oe · · .:,.-.;+ perco,.,,06(~6 ~1,na.. · ' :, ...

7 On my part 5 I would. catego1·ise Lu·. Maro I s arguments as no more that .. ' semantic.. I·lqtel Levy or levy for that matter is defined in the ac-i::, as meaninr::, and I cluote : 11 ::otel Levy 11 or 11 Levy 11 means tlle hotel levy payable under secti.on 4 or section 6 i 11 0 . All the :)rovisions of the act must. be ::cead together. Section 4 imposes a lev-,y- .. 1!tlle the rest of the ri:.·ovision.s determine various char,;es ;:,.s levy_ clepen:d.n3 ori different ci.rct.i.mstz.nces. Mr. Hm·o also stated that the cispute was prompted by ari. au6.it exercise which revealed that there was an under declaration of receipts ·.1hic·h resulted into under payment,· wl1ich according to him cloes not fall under section 6 of the act. _In that rear>ect, thenofore, Mr. Maro staterl, the Plaintiff was not obli["ed to ayYpeaJ.. to the Hinister for fino.nce. Mr Maro 1 concluded. by sa;y"'inc tl1at there is no ba:c for the au.it bein;3 filed in this court. ., , 'rhe::ce is no doubt that the al.le,~e( under <lcclc>,.;ation of receipts statec in the auc.-:.it report vJJ.G fol' t_he :,:)urposes of asses&:1ent of hotel levy. .In the pleaclinr;s such ac1scssrnent is disputec:. and. the Plaintiffs is seekini3 interference by this com·t infavour of the Plaintiff. . S'uch •· an actioh ,:1ill amount to an ascc;,srnent of hotel le:vy •. It does no .- matter whether .the issue is IJhether the lev-J is cl1$rgable on certain. items 01· by a certain method or not. .Such a prol;>lem is based on asse--- ssment of j.evy.. I am sc.tisfied th.at 7 Hr. Ybuta 1 i,s correc_t in sayin.s •' that this fou:ct has no jurisc':.iction to entertain the suit 1;;ith re1:,m·d to the hotH levy. . Ilm1ever 5 thi findi.ng does not render the whole suit incom)etent as stated by the lcarmd counsel because the issue of hotel lo\ry· can be severed from the rest of the suit i-1ithout affecting the tr±aI of the rema.ininc, issu:es. 1u1xiJ1;:; to the preli.rninary object:Lon rei;arclins sales tax, lem•nec counse:i; sub.uittea. that, the sui'c." is tir,1e barreG. since the same was i'J.led .• : #

afte;.~ tho c.-:,:j_Jiry of 90 days ,fi:·01;1 the .. ~ate the Comrai3sioner 1 s d.ecis:Lon . . ,, . , . was not:i.Et:e'.; to the :Blaintiff. I,irn5.ta.t:ton of t:i.r.Je is provided undet· section 7 (2!8J.Yl secton 5? (1) of Act Ifoo 13 of 14;'}6, .Learned coUi1.Gcl · sai0. tl1at ~he :period of 9Q c:ay;] io a:""lplicablc whet.her- the appeal ic; to i. .I• I I

,.

8 the Tribunal. m~ to the :court. Leai1i.cd counsel stated that at the • i.noment an ar;:J'ieve<;i. party ;nay reso;_t to the interim arrru1.gement as p1,;ovided fm under section 55 ( 1) of tlle Act because Appeals Tribunals have not been esta.blishec.. '.i'he Flo.intiff therefore is entitlec1. to file a suii:, in coU:i.'t within 90 days a'-iainst the cec•ision cf the Commissioner ;.. for tho determination of U1e matter :Ln dispute. Learned counsel stated thv.t t,;.1e Plaintiff tJas served with four c.1.iffo:;ent notices; The notices flere c'..ated 6/6/1997I 23/9/1997 am 21/5/1998. According to the counsel, the first n.otice advised the Plaintiff of tho initial conre:utation of sales ta:;: rnhile the second one was emphatic on and it Wi'.,s fol1owc/. by a warrant of distness if payment was not made 1r1ithin seven coys~ Leo.z·nec:. counsel stated that there m.1s in r)laco clear mechanism of collec'c,ii1::~ the tex and theTefore a cause of action hac'i arisen- fr which the Plaintiff could challenge within 90 day.s. Again counsel .stated that tho -:ie:;_:;to;:1ber demand note i1as made after extensive review as 2.. result of tho coL111laint by tho Plaintiff,. Counsel said the notice was notification for tax to be paid as lJroviously clemancfocl • with subcta1.tia.J, rec:.uction. In his view, if the cause of action c'::ic:. μ.ot arise in .Tu.i1e 1 1997 1 then :i.t clL. a.:::ise in ::-.!optember ~ 199'.i'. Finally, tlie learnec'. counsel· said that the final CtGrnand notice of lfayj 19-98 tJctS .a mere confirmation of the revim·l nhic:i t·Jas carriecl. out in September; and. . tho e:tra amount was the penalty 111,:,;_cll .had accumulatedi Learned ,counsel subnittod that since the cause of o.ction arose iri ,June, 1997 and -Septernbert 1997: an6. that this suit 1:J3.S file 1 l on 5/6/19987 the same is- time lx.ir:..;ecl Hr# Haro·;· learr1ed counscl 1 fm.· tbe Plaintiff in reply had inteal).a, this to sa;/, a,.>}d I quote: 11 1'11e matter b'efore 'the court }.(} (~et.is:Loni as .none :has· he:en ua(G o:Z the ':arfou::; ,acts r.elatin,:\ to not to challen:..;e U1e Commissioner 1 5 Jut Je are seeking· j;ntei-protation• tax liability 11 , Earlier Hr. I: 1 'l_aro, admitted that tir:ie sto.rt to ru.n from the Comrniss:Lonet,'s decision.. l-Iouover.; · counel, stc,to( tlla:i:, the audit re:,Jorts subrnittec.l in . ' J .' ,decisions. !iccordin 0 to Mr,, H2.ro I these. audit reports are the one,s uuch .,, ... ~ ~ ~ • .. ~ ...... /9

9 tri 6 ere~; the dispute betwaen tho .. tux pnycr and the cwmissioner, ancL, in his -vieii;, the· Commissioner has n9t iila<.lc a decision on the dispute,. /lJ}(: it goec tiithout sa;yinf~ that time ilc.1.B not even started running intc:c!l}s of section 47 (2) end 53 (1) of the· Act .. tiith :,reat respect to the le2-.1ncLl counsel, Hr. ~~aro 1 if 1 as he says that 'the Commissioner ha:.: niade no decision with regard to payment '' of sales tax and the amount to be -.::o.ic.:. -:1nd at the sclJne time learned counsel agrees that there is a 5.iD::ute between the tax payer and the Defe.ru:ant, what hen is the c:.:: .. s-iute about? Of comse, from the ... statement of the lcalned counsel just quotec. above, the suit has been instituted seekin~ interpretation o·f various acts relatins, to ta"'C liability. -SurelY; le;:;al )rov:i .. sions of an Act of P:J.rl:L:1L1ent can not be interpretted in vactur:i. Ono can only move the court to interpret particular provisions ·- of law uhe::.·e an act h2.s been conc ullilm· the auspices of the -·provis:i.0'!1s· · __.:, t· .,i ;.::d"~~:· :· if ,' ~ . :; o:t the law' 1:;h:i .. le another is of tl.10 viou thfl.t those·:act~ done by the othe1· arc not coverecl by the sr;,.i:..l i-:irovisions of the l;;ti1 •. In the matter . . . . . at h~.nd .. the-:act'\·Jhich; the ?13.iritii'/ i;· contesti.t1·• as not .. been coverel'. ' ... , . . . ' . . by tile /3alcs Ta,:·.-Aci i's {1x, ·, .. \ecisio~- by the Commissio?er cirecLine; the Plaintiff to -tay··tm::': ai' ·1,er ·audit re))o;t submitted in June and September 1 1997, Lea.i."ned counsel, Mr, Mru·=o, conccedocl that the dispute was trir._,ered by tho audit 1·epor:ts. • The au<.lit re\orts ahow 'hoi-i · the t'c - cbmput.ations we1e crurfod out·· and: on v1hat items cales tax •Jere eh<'¥'Jed1 1hese audit reports 'IJc:;:·e accompanieci_ with <-'- cloi,10J1t: note of payment of specif:i..ed amount 1·iitl1.i..n a specified period f::..i:!:m..;e of 1:1m.ch (istr·ess warrant uas to is::;uo an:..1. infact a istr2s 113.rrc.nt ,Jas issued ih July, 1997 ... There can be no doubts at .al.l' that. tho· dcr,1an:. notes a.ncl the distress warran,t,s ~ clearly constituted tlie· .tkc:Loion of tl Commissioner as to eri··tihat . t al t c,,,.,.,,., "bl '••1' t',,,, ., -'- , · t ' .. Tl . . l. Onl3 Ua!J S es 3X 1=.L ;(,Gu 0 c.u le i,.;; vOv<A.L c1"i!OUn GUew•·. US 1.S 1·JL0.t the i.'laintiff is clisputinc11 Acco::.ding to sctior:i 47 (2) of the· Act No 1.3 of i97.6 an_ agr-ieve6. pa:cty by the Comi.llssione1"''s decision n-iay appeal tb the A))eals Tribunal, IIouever;, as it -Jas stated by Hr. ' Ilibuta, du.ch Appeals 'h'ibu ai~e not yet in place and in the mean t:iHe. an aer'--ovod l)ar ty may make use of tho ~-:irovision of section 52, ( 1 2 Niu.ch for ell.so of reference reads:- . ' ..

== 11 55.-( 1) Until such time as n.n .A.p1)eals Tribunal is established lwder .section 4tr any person a.::;c;rieved by the d.ecision of the . . . Commissioner in any dispute refe:cicd to in section 4 7, may, within ninety days· of beinr: notifj_ed of such decision, file a suit in the High Court for tlle determination of the matter in dis:;_Jute. 11 Latest 1 by Septeii1ber, 1997, the Plaintiff was in no doubt of what sales tax trias be:i.nr; dema.'1clecl by the Dofendari.t and that if not paid the same. would be recovered by means of distress on their property or bank account, Clearly these i-Jas a cause of action in Jhich the Plaintiff couicl act and file a suit in tlrts colllt. They did not do so till • 5/6 /i 998. Tl1?-s i·a;,i .te ( 10) rnontl1[; afte~ the cause of 2ction had nccu:red~ The :;_Jr'esent suit in :i.CS°lect of sales tmc per section 55( 1) of Act Ho .• · 13 of 1976 1 t:ime barre<l~ The fourth objection refe:i.s to stamp duty. Learned counsel, Mr, ICibuta stateJ. that the suit is incor:ipetont as the suit can be institute,: in this court only by i·w .. y of case stated in accordance i-;ith section 67 of Act No. 20. of 1772i w:1ich reads:-- 11 'l'lle Commissioners may, and r311a1.1 if so requested by ·any, interested party 1 . state any c2..se referred to them under sectj_on 66 or otheri'lise befo;.·o them for their · consideration and refer suc:1 c:-se, viith their owrr o:;:1inion thereon 1 .to tbc Hij1 Cqtl - Provided that wh;re _fny j_ntciestecl · riru·ty malrns a rcq)...lest for reference to· t;l.o Ilie;h Court under this section, the, Co.nmiss:i...oners sh.al]. not refer the case • ~ t .. · . . .. . . to the :L 6h Cort miJ.ess such -)er son has · first i:iaid suci1 fee as may 'be; prcsc1•ibed. 11 . . ' . Lem·11e(l <::ounsel 1 Mr,. Maro 1 re;-;liec. 1)y sayin;; that the issue which l:'..aS . . . been bi·oujTt. to this court docs not fall under au.judicative process ancl t·e:;.·cfo:ce section 6? quote_~~ above c:,1.11 not apply. Accordin;; to the counsel, tbis section, applies oriJ_y in case there is doubt as to ,·1hether or not n certain C::.ocum0nt, shoul::,. be ::ri:,arnped., The counsel stated that the dispute is the appropriatenes,s of charging stamp duty as to :'Jhethcr ----··. the S"Gc.).'i1i:) c."tuty sh?uld be clla.rel'. on turn over or on a.ctual receipts,, In Hr. Ha:c~o 1 s vim-1 1 the act is ::::i.lont as to how _to .resolve such a • • ••• /11

11 dispute of- charging on turn over or on actual receipts.. It is my consici_ere(l view· that a stainp cluty officer under section 42 of the Act is not limited to deciding what ins-t:.1·1.m10nts are to be stainped and the amount to be paid but is also c~uty bound where neccscjary and if . •· requirec1. to determine ho1'.! the amount is to be comput0d. In the matter before the courtv. si·nce the, (!ec:i..:::;Lon. to charge stamp duty on turn over instead of on receipt as claimed by the Defendant was made by the Comrniosioner f the Defendant has the ri;;ht under section 67 of the Act '· to rnove the Commissioner to refer tile issue to the High Court by way of case fftatecl. The Pr.o~ision of tl:L-Ls section fully covers the problrnn stated by .the le?)i.ried counsel be_cause the Commissioner is not req_u:l.red to state a case to the High Court on matters referred to him from • sect:i..on 66 of the act but • • • • • and shall if so requeotetl by an interested i_)arty state any such case rcfe1·red to thrn-;i under section 66 or otherwise bofo:cc them for their consj_c1.eration • • • • • • It i3 the1•efore not correct 1 as the counsel said, that the act does net provide l;lechanism for resol,rin,::; ·i:,lle kind of problem -stated by the learne( counsel. I rn satisfied ti:10.t the suit touching on a:. dispute on 1 )ayrnent of stamp duty has vironQ_y bcon instituted in this Court as no suit ma;')• be brought to it GJ;:cept by way of ca.so stated provided for by hui. Tllo last objection is on car benefit tax4. It was submitted that the ;'"tr-l Is Court is the Court wl:j.ch :i.s vested with the ,jurisdiction and that th:.'l..s court can c,nJ.y entertain tho issue on an ap;:,eal •. Learned counsol for the .Defendant concoe<.lec~ and urged the cow:-t ·to transfer the s~m0 under -~section 21 rule ( J.) (a) of Civil Procedure Code to the rll•l's Court .'for tri2J.. In accorclanco i,ith the prayer, it is orderecl that part of the suit touching on Cc1r Benefit Tax is hereby transfered to tM mr 1 ·s Court for trial. For the :,:;urposs of the suit,s any reference to the c::.i.r benefit tax is accorc:Ln;:J.Y at.ruck out •... t

• • -· 12 The result is thereforc 1 th&t; with re:,arcJ. to: (i) Eotel Lov3r 1 (::ii) Stamp duty 1 the court ha::; no .:iuris:iction to entertain ·the matter and any reference to issue of hotel levy in t]1j_s case is hereby struck out • the sarno L; t].Jne h:mrec: an:~ conscquentJ.y any rcfc:cen.co to an issue of s;;;les t.e.x in this cc;se is stiuck out'. the court ;,:::s no ori.:;inal jurif.:;cliction to enter'c.:in t\ su"it but only on a stated case, The ScliilE: is struck out• J.ccordin;:;lY the v;holo suit is ,struclc out ~iith-:costs to the 0efencJ.ant. H. i!;-nusm ✓-·· JUDGE 29/6/2000 Coram: Mr. Hc--.ro - Ac1-voccite for ti"1e FJ.aint,iff Hr. Ki'outa - h.lvocate for the Dcfon--:a_nt Iculin;, clol:.1-verec: in Chambers- ' \ ''. ,,,, ... / .... H .Ii .\zDE{IT ,:;u.x~.s _____ ... 2c; /9/2000 I ' Hul0:3 for leave to a;_Ji,ea1 to the Court of Appeal. Nr. Kibuta: I have no object:Lon to tho prcwer beinc; i:;r-anted, OrJ.0r: 29/9/2000.