20110530 TZCA Dar es Salaam

I fl i JC IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: OTHMAN, C.J., NSEKELA, J.A., And MJASIRI, J.A.) CIVIL APPEAL NO. 14 OF 2007 IN-SIGNIA LIMITED ■ • • • • • 1 • 1 • • • 1 •••a 11■ • •• • •• • • • • • ■ ■ ■ • • • 1 • • ■ ■ • ■ ■ 1 • • • APPELLANT VERSUS THE COMMISSIONER GENERAL TANZANIA REVENUE AUTHORITY ........ ............... RESPONDENT (Appeal from the Judgment and Decree of the Tax Revenue Tribunal at Dar es Salaam (Shangwa, J.) th Dated 15 day of September, 2006 in Tax appeal No.11 of 2006 JUDGMENT OF THE COURT th 19 March 2011 & 8 June, 2011 NSEKELA, J.A.: This appeal has its origin from the Tax Revenue Appeals Board as VAT Tax Appeals Case No. 16 of 2003. The appellant was Insignia Limited and the respondent was Commissioner General. The appellant objected pay the respondent Shs. 1,252,893,687/=being allegedly underpayment of Value Added Tax. This was additional assessment. The appellant lodgea a notice of appeal under section 16(2) (a) of the Tax Revenue Appeals Act 2000 challenging this additional assessment. The 1 2 Tax Revenue Appeals Board decided that the appellant should pay additional tax of Shs. 37,214,114/= with interest instead of the assessed tax of Shs. 1,252,893,687/=. The respondent was dissatisfied with the Board's decision and so lodged an appeal against this decision with Tax Revenue Appeals Tribunal. (the tribunal) This was Appeal No. 11 of 2006. This time around the respondent was the successful party. The Tribunal held that the appellant was liable to pay the additional VAT of shs. 1,252,893,687/=. It is against this background that insignia Ltd ( appellant) has lodged to this Court, Civil Appeal No. 14 of 2007. The appellant before the Tribunal is now the respondent. The appellant lodged five grounds of appeal, namely - ' 1. That Tax Revenue Appea!ls Tribunal erred in law in holding the exhibits RE 2; RE 3; and RE 4 represented actual sales; · 2. That the Tax Revenue Appeals Tribunal erred in law in holding that the appellant did not discharge its burden of proof per section 18 of the Tax Revenue Appeals Act, Cap. 408 RE 2002. 3. (Abandoned). 2 ► l 3 4. That the Tax Revenue Appyals Tribunal erred in law by disregarding the reasoning and findings of the I Tax Revenue Appeals B0ard on the facts and evidence adduced therein; 5. That the Tax Revenue Appeals Tribunal erred in law I in holding that the respondent did not have any evidential burden of proof to discharge once it made the assessment of yalue Added Tax liability and the same was disrupted." I Mr. Matunda, learned advocate for the appellant, at the outset I abandoned the third ground of appeal. The remaining four grounds were consolidated into two pairs, the first and the fourth, the second and the fifth. As regards the first and fourth ground of appeal, Mr. Matunda submitted that the respondent wrongly used the figures in exhibits RE 2; RE 3 and RE 4. The figures contained therein were not actual sales but included business projections. He added that those exhibits cannot form I the basis of computing VAT liability.: He contended that actual sales would not contain the targets and that there was no evidence that the targets 3 4 were sales. The learned advocate urged the Court to make its own findings since the Tribunal's findings were not based on cogent evidence. Submitting on the second and fifth grounds of appeal, Mr. Matunda stated that the evidential burden of proof is on the respondent to establish that its assessment was not erroneous. He contended that the appellant adduced evidence by calling six witnesses including the Managing Director to discharge its burden under section 18 (2) (b) of the Tax Revenue Appeals, Act 2000. He added that the respondent had seized all documents and hence was in a better position to correctly assess the tax payable. Apart from that the respondent had a resident employee at the appellant's premises. Mr. Juma Beleko, learned advocate, represented the respondent. The learned advocate submitted that the burden of proof is on the appellant tax - payer and that the authenticity of the documents was not disputed. He also contended that only questions of law should be canvassed before this Court of appeal. Questions of fact are not to be argued at this stage. A good starting point is section 25 of the Tax Revenue Appeal Act, Cap 408 R.E. 2002. It provides as follows: 4 5 "25 (1) Any person who is aggrieved by the decision of the Tribunal may prefer an appeal to the Court of Appeal; (2) Appeal to the Court of Appeal shall lie on matters involving questions of law only and the provisions of the Appellate Jurisdiction Act and rules made there under shall apply mutatis mutandis to appeals from the decision of the Tribunal." It is therefore evident that appeals to this Court from the Tribunal should involve only questions of law. The appellant is not permitted to re- open factual issues in support of the appeal. The appeal should be decided upon a consideration of the law only and nothing else. We are therefore not persuaded that the first and fourth grounds of appeal concern points of law. The first and fourth ground of appeal relate to an evaluation of the fact in exhibits RE 2; RE 3 and RE 4. For instance exhibit RE 2 concern with a determination of whether or not the figures therein are actual sales or projections. The second and fifth ground of appeal revolved around the question of burden of proof in the context of section 18 of the Tax Revenue Appeals 5 6 Act, Cap. 408 RE 2002. This requires the Court to interpret this provision of law and therefore a question of law.'. The essence of the complaint was to the effect that the Tribunal erred in holding that the appellant did not discharge its burden of proof. The pe~ultimate paragraph of the Tribunal's judgment is in the following terms.- "In our opinion, the appellants act of seizing the said documents from the respondent does not shift the burden of proof fro~ the respondent to the appellant for (sic) show the additional VAT assessment of Shs. 1,252,893,687/= is excessive or erroneous. The purpose of seizing those I documents was to find out as to whether or not the respondent had evaded any VAT during the years I I 1998, 1999, 2000 and 2001. It was upon thorough examination of those documents by the appellants' officers who compared tt)em with the monthly VAT returns which had been submitted by the I respondent to the Tanzahia Revenue Authority that additional VAT of Shs. 1,252,893,678/= was 6 7 .. assessed and demanded by the appellant form the respondent." The burden of proof in tax matters has often been placed on the tax-payer. This indicates how critical the burden rule is, and reflects several competing rationales: the vital interest of the government in getting its revenues; the tax payer has easy access to the relevant information and the importance of encouraging voluntary compliance by giving tax - payers incentives to self-report and to keep adequate records in case of disputes. The evidence which settles the final liability lies solely within the knowledge and competence of the aggrieved tax - payer. In the case of T. Haythornwaite & Sons Limited v. Kelly (H.M. Inspector of Taxes) 1926 - 27 T.C. 657, Lord Hanworth, M.R. stated at page 667 - "Now it is to be remembered that under the law as it stands the duty of the Commissioners who hear the appeal is this: parties who are entitled to produce any lawful evidence, and if on appeal it · appears to the majority of the Commissioners by examination of the appellant on oath or affirmation, or by other lawful evidence, that the appellant is 7 8 .. overcharged by an assessment, the Commissioners shall abate or reduce the assessment accordingly but otherwise every such assessment or surcharge shall stand good. Hence it is quite plain that the Commissioners are to hold the assessment standing good unless the subject - the appellant - establishes before the Commissioners by evidence satisfactory to them, that the assessment ought to be reduced". (emphasis added) This is the thrust of section 18(2) (b) of the Tax Revenue Appeals Act, Cap. 408 RE 2002 which provides as follows:- "18 (2) In every proceedings before the Board and before the Tribunal- (b) the onus of proving that the assessment or decision in respect of which an appeal is preferred is excessive or erroneous shall be on the appellant." 8 9 .. The burden of proving that the assessment is excessive or incorrect is on the appellant tax-payer. The respondent revenue authority has no burden of proving anything. However, where the appellant produces the documents before the respondent revenue authority, the appellant can be sard to have discharged its burden of proof. After that it is up to the respondent to disprove the veracity of all the invoices and other documents. The question is did the appellant discharge that burden? The learned author, Richard A Toby in his book The Theory and Practice of Income Tax (1978) at page 91 had this to say:- "The various authorities have settled the question that the mere making of the assessment by the Revenue is prima facie evidence of liability and is sufficient to demand the payment of the tax. However, the onus is not one which remains on the tax - payer throughout. The taxpayer need only give an explanation which appears reasonable in all the circumstances. This having been done, he will be regarded as having discharged that onus. The burden of proof must at that point in time shift to 9 . l ~ I 10 ' .• the Revenue who must then satisfy the Court or tribunal as to the justification for maintaining the assessment. Where the Revenue fails to do so, the assessment must be vacated." The respondent, in the exercise .of its statutory powers under the VAT Act, seized the appellants documents, records and apparently used them to compute the appellant's VAT liability. The appellant had made out a prima facie case, and therefore the evidential burden shifted to the ' respondent who now had to produce evidence to support the assessment made from the seized documents records etc. It was then easy to dispute I exhibits RE 2; RE 3 and RE 4. The Tax Revenue Appeals Tribunal in its judgment stated that the respondent had made a thorough verification of I I the documents. The correctness of the assessment had to be proved by direct or documentary evidence of the actual determination and not by a presumption imposing an evidential burden of proof on the appellant to prove facts which were within the knowledge of the respondent. ' In the result, we allow the appeal with costs. We set aside the ' decision of the Tribunal dated the 1st~ September, 2006. th DATED at DAR ES SALAAM this 30 day of May, 2011. 10 11 . r M.C. OTHMAN CHIEF JUSTICE H.R. NSEKELA JUSTICE OF APPEAL S. MJASIRI JUSTICE OF APPEAL I certify that this is a true copy of the original. ., 'fl'' I 1(~· l l,i,"'·1• t •io i . \ \ '~ -l 11 2 VERSUS Tt,uE I ,....EPUBLIC K fl I-. r. II II•!!"#• Cr II N ir ti 1:1 · ti ■ fl r • II "I• it r: • n I II I JI ■ Ill 1111 CI l!I' P II Ill'• 11 n.; I' It 111?; Nun n.-•,-.pri Ji"' .._rt: .F"\..i::~, f"°' ··-?\J~ "'J,f: ._, l: .. (f.tppeal from the judgment of the High Court of Tanzania at Dodoina) () --i- { -l_ Dat2d the 12 th day of Decen1ber, 2005 •, I '· ...... _.,.,,) In Cdmin;:d ........... ,.. ·.-. ,., ~-· !\in: LlnnP~I ...... - -·- -- . - ·.· -r.;;,1- r1:f 70.0i I ..._J I JUDGMENT OF THE COURT I 1,2 U) /1 l. 19 th June, & 12 th July, 2007 RUTAKANGWAc J, A.~ (_) I I The appellant was charged before the District Court of Mpvvapvva ' with three counts. In the First count he was being charged with armed robbery C/5s 285 ·and 286 of the Penal Code. In the second ancl thircl counts he vvas being accused of unlawful wounding C/S 222(1.) of the Pei Code. Although lie denied the ch2rges the trial District Court founcl him quilty cJ'.:; '\ : ' ... charged on .all counts and convicted him accordingly.'~':/~le wBs sentenced to •· thirty years imprisonment fo1· the offence of armed 1·obbery !Jut .the., ti-ial Court, curiously, passed no sentences on the 2nd and 3 rd counts of unlawful wounding. The appellant was dissatisfied with tl1e entire decision of the trial District Cowt. He lodged appeal No. 54 of 2001 in the High Cowt of Tanzania at Dodoma. Although the respondent Republic supported his appeal, the High Court (Mjasiri, J.) dismissed the appeal in its entirety. Being aggrieved, he lodged this appeal. I. Although the petition of appeal contains seven grounds of appeal, which are discursive in natur.e, the appellant's main complaint is one. This !fS is that the trial District Court and the first appellate cou1t e1Ted in law and on the facts in predicating the convictions for robbery and unlawful wounding on very weak and unreliable visual identification evidence of the prosecution witnesses. As i.n the High C6urt, the respondent Republic supported the appeal for similar reasons. '' i I r It wilt be helpful, first, to narrate briefly tile evidence which led to the an-est and aITaignment of the appellant and his subseque11t co11victio11s. It was as follows. i I / I The victim the of undisputed armed robbery and unlawful wounding weI·e Mulugu Milangasi, Neerna Milangasi, Joha1·i Mgau and Zahara fVlgaya, vvho testified as PVV1, PW2, PVV3, and PVV5 1·espectively. Mulugu (P\Nl) and Neema (PW2-) are husband and wife, while Zahara (PVV5) is the step mother of Johari (PW3 ). Afl of them reside at f\lcluluguni village in l<ongwa District The appellant,· who a·lso resided at Nduluguni, is a grandson of On 22 nd November, 2001 at about 8.00 p. 111. while P\N1 and PW2 weI·e taking their supper, a "customer" called at thei1· shop. PW2 left her meal and vvent to attend him. After PW2 had attended the customer, she was ordered to sit down. Acco1·ding to PW2 sl7e neveI· saw the person who gave the 01:der. At the same time a person apprnached PW1 where he was having his supper, ancl shone a torch into his face. He was then hit with an irnn bar orFthe head, left shoulder and waist. PW1 ran into his house, for safety being pursued by· his assailant. Another person entered the house, him with an iron bar and demancled to be given money. PW1 showed them a small bag wherein was Tshs. 200,000/=. The money and some other goqds (which were not specified) were taken by the invaders, who le~ immediately while being pursued by PW:L who was armed with a · panga. PVV2 who had closeted herself and their children in their shop raised an alarm and many people gathered as the invaders r·an away. Then PW1 joined PW2 and at that juncture a gun was fired. PW1 told PVV2 what had befell him and hastened to add that he did ····not' identify the· robbers:·~l=lowever1 PW2 told him that she had managed to :ece:~::!2<2 ~?.r.odi 5'?kach~ (the 0ppe/l.:=int) among the robbers. Although PWJ and PW5 were not im1aded they were mysteriously wounded. Both 1 PVVJ and PW5 also claimed to have seen the appellant at PW1 5 shop: The ' - appellant was arrested by PVV4 No. 8029 D/Cpl. Mark on 23/11/ 2002. The appellant denied committing the offences. He told the t1·ial Dist1·ict Court that at the time when the robbe1:y took place he was at his home with his family. He admitted to have heard gun shots but out of fear did not ventLu-e out of his. house until the next morning when he learnt about the previous night's ghastly incident. He admitted to have been rd arrested on tile morning oF 23 f\lovemlJer, 2001. I I evidence relied upon by the two courts below was very weak ar ' f / · unreliable. Given the fact that the offences were committed at night ti 1 uncertainty about the source of the light which woulcl .have enabled ti witnesses to identify the appellant and its intensity as well as the confusir and _panic cre_ated by the gun shots, it would be risk taking to hold that t witnesses positively and unmistakably identified the appellant as one of ti robbers, he arguecl. To buttress his argument, Mr. Tangoh pointedly contended that · ..... there wa·s light at·-a/1 from any lamp, then the appellant could not ha Li-;-2c J ~c:-c~ t::; !i~;!'~t the :3 1·'?.3 where P\Nl was_. as alleged by both PV and PW2. Similarly, if the light from the pressure lamp which was at PW! shop •enabled P\N3 and PVl/5 to identify the appellant from a distance about 30 paces, then the same light ought to have enabled PV\/1 recognise the appellant, he insisted. He accordingly urged us to allow t appeal in its entirety ancl set free the appellant. After going over the judgments of two courts below, the grounds appeal and the submission of Mr. Tangol1, we are of the view that t . crucial issue in the determination of this appeal is that of identificatic Was the appellant positively identified by P\Nl, P\N3 and PVVS at the seer ' . of the c1·in1e to be one of t:he ,·obbers as the tvvo coU1ts found and held? In approaching the above framed issue, this being a second appec we are alive to the does not light interfere with the concurrent findings of fact_ of the courts below. It w only be within its province to interfer·e if it is cleai-ly shown that there was misapprehension of the evidence, a misca1Tiage of justice or a violation c some p1·inciple of law or practice. Seer for· instance:-· i:PETERS VS SUNDAY POST UMJTED ( 1958) E.A. 424 ii.AMRATLAL D0/VIODAR MALTASER t/a ZANZ.ABAR SILK STORES VS A. JARI\NALA t/a ZAI\JZIBAR~ HOTEL ( 1980) T. L. R. 31, iii.D. P. P. VS f\lORBERT MBU~JDA, Criminal Appeal No. 108 of 2004, C/J.T, (unreported) and iv.ZAl<ARIA JOH!'J Al\18 OTHER V. R. CrirnirJa/ Appeal No. 9 of 1998, CAT, (un1·eportecl). ·rn the light of this· 1xi11ciple, is there good· cause in this appeal upon which this Court could fault the findings of fact made by the two --~ ... . ........... ' r < courts below? After an objective re-appraisal of the whole evidence on record, we are satisfied that there is such good cause. Needless to over emphasize here is the fact that the case was decided on the basis of the credibility of P\N2, PW3 and PVV5. At the centre oF this point is the is_s:ue of whether or not the appellant was Y\ unmistakably identified by these witnesses at the scene of the crime --_;._ among ------------- the robbers. As it is already obvious, the courts below were positive in their findings that he was. · 0 1: our part vve do not share the same degree of certitude with the courts below 'on the issue of identification. We Find, as pointed out by Mr. Tangoh, the identification evidence to be very shaky and totally unconvincing. As this Cou,i has repeatedly stated, it is "trite law that in a case depending· For- its determination essentially on identifi,_cation evidence, be it of a single witness, such evidence must be watertight, even if it is evidence of recognition": See DORil<I l<AGUSA V. R:, Criminal Appeal /\Jo. 174 of 20~4, C/\T, (unreported). -. u / In the instant case, PV\/2, PW3 and PVVS asserted in their . evidence that they saw and recognised the appellant ·at the scene of the robbery which happened on a moonless night accompanied_ by the Firing of guns and two of them were wounded in the process. §oth. ~vy~ a.nd ~"!✓-.5.. ___t?ld the trial Court that they could not ex.plain how they were .wounded and who wounded them. In view of this could it be held with certainty that the identification evidence of these witnesses vvas beyond reproach? :_ · · · In orde1· to satisfactorily answer the ~bove question, it will be SAID CHAL Y SCANIA V. R., Criminal Appeal No. 69 of 2005, CAT, (unreported). Drawing inspiration. from the case of WAZIRI AfvlANI . V. R. (1980) T. _L. R. 250, the Court held: · "We think that where a witnesses is testifying about identifying another person 111 unfavorable circumstances like during the night, he must give clear evidence which leaves no doubt that the identification is correct and ·reliable. To clo sol Ile \Nill neccl to n1ention all the aids to unmistaken I I identification .~ like proximity to the person being identified 1 t!1e source of light, its int:ensity, the length of time the person being identified was within view and also whether the person is familiar or a stranger". Going through the evidence of PVl/1, PW2, PW3 1 and PWS 1 with these guidelines in mind, it becomes evident to us that _the identification evidence borders on a concoction or wishful thinking. None of the three witnesses ··-~-specifically· testified" to ·the- effect that they were aided by fight from the PW2 s evidence does not clearly show how she was able to identify 1 . the appellant. This is what she told the trial court: \\ .. on 22/11/ 2000 at about 8.00 p . m. I was at home takfng food with my family (PV\/1 ancl children) at the veranda. We had "taa" chimney (sic) I was called by a customer at the shop went to attend him. I gave him 2 balteries in a torch and a torch. The customer then told me "hapo ulipo kaa chini". _I did not see him. I returned back (sic) to my food and heard my husband say "nani anayenimulika na tochi usoni". I just saw him still directing tor·ch on my husband. He was hit by an iron bar on the head. I and children ran into the 1 shop, the door of bati' (sic) I saw the first accused attacking my husba. nd. He kept beatin_g him- till when he entered i0to the room. One of the thugs wanted to break shop door I proceed (sic) the bati st door and saw the 1 accused. I raised an alarm. -The thugs then 1·an away. They were chased. I heard gun fire 'mlio vva bunduki'. Mv husband came and said it is me 'fungua'." This evidence does not render any assurance that PW2 managed td, st recognize the appellant, who was the 1 accused in ~he trial cou1·t. These bare assertions unaccompanied by any explanation on the aids that enabled her to identify the appellant, do not add up to very much·; It is I . inco1iteivable that she could have seen the appellant assaulting PW1 while ' · hiding safely in,,tl}e , shop whose corrugated iron sheet dorn· was closed. Her evidence does not show how fa,· she was fn~m the place wl1ere PW1 was being assaulted. As rigl1tly pointed out by Mr. Ta11gol1/ i( there was any .---- 12 -' . light arouncl, the bandit could not l1ave found it necessary to shine a torcl1 on the face of PW1 and/ or P\Nl could as well have recognised the appellant as his assailant for the appellant was very well known to him. i: .ft tl·-~: cl/,, / I The evidence of PW3 and P\JVS is equally highly suspicious. Accor·ding to PW3 1 at the time of the robbery fhey were at their shop selling goods . .They had a pressure lamp. They heard voices at the shop of PVV1 and .suspected there was a fight. They got out to ascertain what was going on. Then a gun was fired and PWS was hit by a bullet on her· right arm . .PW3 held. /Jer but had to abandon her when a second shot was fired and she ran to a neighbor's house from were she allegedly saw the appellant. . This evidence of PW3 is starkly silent on how she was able to identify the. appellant from her neighbor's house where she had sought refuge. Also..,. her evidence conflicts with that of PVV2 who claimecl that guns were fired a~er the bandits had run away and were being pursued. The evidence of PWS was also riddled ....with con!:radictions. According • t? her when they heard noises they peeped through the window of their· house and saw the appellant at the home of PV\/1. Then she was hit by a bullet ·and PVV3 took her outside only to be abandoned when another· shot was fired. From the evidence of PVV3 and /JW4, the distance betvveen tile 13 homes of PVVS ancl PV\/1 is about 30 paces. PVVS's evidence is silent on what enabled her to identify the appellant from that. distance during the night. The1·e is another aspect in the evidence which we- have found rather discomforting. According to the evidence of PVl/2 and PW3 many people gathered at the scene of the uime following the alarm raised by PW2. Unfortunately, norie of these people testified at the trial of the appellant. · Nonetheless, since the two witnesses allegedly identified the appellant, one ... would have. expected them to name or disclose him tQ the villagers wh_o responded, With a view to having him arrested immediately as he was a resident of that village.· Apparently, this was not done as he was arrested ~ _.:..:_---------:------- the following day by PW4. That the appellant was not so immediately mentioned casts doubt on the veracity of PW2 and PVV3 and so on the r·eliability of their identification evidence: see: i. /VlT 38350 PTE LED/VlAN MAREGESI. V. R. Criminal Appeal No. 9.3 of 1988 (unreported) ( CAT), ii.IBRAHIM SHABAN AND ANOTHER V, R. Criminal Appeal No. 110 of 2002, (CAT), ( unreported), iii.ATHMAI\J @J BUYOf\lGERO V. R. Criminal Appeal No. 222 of 1994 (CAT\ ( unreported) arid • ' iv.JUMA SHABANI •@ JUMA V.R, Cr·iminal Appeal No. 168 of 2q_o4 (CAT), ( unreported). -J • Their mentioning of the appellant to P\N4 might have come as an after thought1 it seems. ... In view of the foregoing, it is our settled view that had both the trial magistrate and the learned appellate judge addressed· their minds to the unsatisfactory nature of the identification evidence and the unexplained delay by PW2 and "---------------------- ----- P\A.'3 t~ ~2n:~ th':? ?.ppe.ll?nt.- vvP. think. with respect, that they could have arrived at .a different conclusion. --- In the -circumstances, we are satisfied that on the evidence available, it is very doubtful that the appellant was properly identified by the three prosecution witnesses. That being the case 1 we hold that the appellant was wrongly convicted for tile offences of· armed robbery ancl unlawful wounding. \/Ve acco,-dingly allow the appeal, quash tile convictions and set aside the sentence of imprisonment. Tile appelrant is to be r·eleased forthwith unless he is otherwise lawfully detained. DATED at DODOMA this 3rd day of July, 2007. E. N. MUNUO JUSTICE OF A.PPEAL. . E. M. K. RUTAKANGV'J,A JUSTICE OF APPEAL N. P. KIMARO JUST.ICE OF APPEAL I certify that this is a true copy of the original. {J ;Yi:_/ 5. M. JJ /J¥Yil<A DEPoif RE!.GISTRAR /