20050505 TZHC Dar es Salaam

1.. !Ii"'·~ ,/ y _- . IN THE HIGH COURT OF TANZANIA AT DAR ES SALAAM CIVIL CASE NO. 64 OF 2004 TANGANYIKA INVESTMENT OIL & TRANSPORT CO. LTD ......................... PLAINTIFF VERSUS TANZANIA REVENUE AUTHORITY ... ~ ... DEFENDANT Date of last order 12/4/2006 Date of Ruling 5/5/2006 . RULING ORIYO, l The plaintiff filed a suit against the defendant for the following declaratory orders:- 1. That the amount of Shs. 263.916.711/= demanded as tax arrears is not due as alleged or at all 2. That the Agency Notice issued by the defendant to the- plaintiff's bankers is unlawful 3. That the defendant is bound to demand and be paid tax arrears as per its Income Tax Computations served on plaintiff and - adopted at the 21 st May 2004 discussion between the parties. In response, the defendant prefaced its Written Statement of Defence with a preliminary point of objection in law:- 1 " That the court has no jurisdiction to entertain this suit as per Sections 12 and 7 of the Tax Revenue Appeals Act No. 15 of 2000 read together with the First Schedule to the Tanzania Revenue Authority Act 11 of 199S' On 16/6/2004, by leave of the court Bubeshi J (retired) parties argued the objection in writing. According to the order of the day, Ruling was to be delivered on Notice. It was unfortunate that the Ruling was not attended to as the whereabouts of the case file after June, 2004 not certain until December, 2005 when it was made available. This ruling is in respect of the preliminary objection. The issue here is simple and straightforward on whether this court has jurisdiction to determine the pending suit. It was the defendant's view that pursuant to the provisions of SECTIONS SA and 7 of the Tanzania Revenue Authority Act as amended by the Tax Revenue Appeals Act and read together with SECTION 7 (1) of the Civil Procedure Act 1966, this court has no jurisdiction over the subject matter. It was contended that the " sole original jurisdiction" in all proceedings of a civil nature in respect of disputes arising from revenue laws administered by the Tanzania Revenue Authority is 2 ,• (I vested in the Tax Revenue Appeals Board. The defendant cited this courts decision (Nsekela. J as he then was) in the case of MOHSIN SOMJI VS COMMISSIONER FOR CUSTOMS AND EXCISE AND ANOTHER, (Commercial Case No. 287 of 2001, unreported) in support of its position. The plaintiff was opposed to the contention that this court lacked jurisdiction over the matter. The plaintiff's arguments were firstly that the orders sought were merely declaratory. Second argument flowed from the first one in that when SECTION 7(1) and (2) of the Civil Procedure Code are read together; it is clear that when the relief claimed in a suit is a declaratory one, the court shall have jurisdiction even if expressly or impliedly barred by another law. The case of The Registrar of Buildings Vs Eliniiria Patton Mwasha (1982) TLR 242 was cited in support. Thirdly, the plaintiff distinguished the decision in MOHSIN case above on the facts and the surrounding circumstances and that the provisions of SECTION 7(2) CPC were not canvassed before the court. Lastly, the plaintiff argued that SECTION SA of the Tanzania Revenue Authority Act as amended by Act 15/00 and SECTION 7 of the Tax Revenue Appeals Act are irrelevant and inapplicable in the case and serve no purpose because there was no and had never been a Commissioner's decision against the plaintiff. 3 One would have expected that the defendant would have responded to the plaintiff's arguments, at least on the last argument that there was no commissioner's decision and the impact of the decision in the case of the Registrar of Buildings (supra). Unfortunately the defendant did not file any submissions in rejoinder; though leave to file same was granted up to 13/8/2004. Now to the merits of the objection. SECTION SA of the Tanzania Revenue Authority Act as amended by the Tax Revenue appeals Act provides:- •~ny person who is aggrieved by the decision of the Commissioner General in relation to any act or omission in the course of the discharge of any function conferred upon him under the law set out in the First Schedule to this Act may appeal to the Board in accordance with the provisions of the Tax Revenue Appeals Act 2000" The plaintiff argued that the provision was inapplicable because the Commissioner General did not make the decision in dispute. Part V (sections 15-18) of the Tanzania Revenue Authority Act is titled:- COMMISSIONER GENERAL, OFFICERS AND STAFF 4 A Commissioner General is appointed under SECTION 15(1) as the Chief Executive Officer. His duties include the control of the other officers and staff; and under SECTION 15(5) the Commissioner General may delegate any or all of his functions in relation to a revenue law, to a revenue commissioner or any other commissioner or Officer. Further SECTION 3 of the Tax Revenue Appeals Act defines Commissioner General to include:- "any person appointed as Commissioner in respect of any tax" The plaintiff was aggrieved by Annextures" "LOCA - 1", LOCA - 2" and LOCA -3" to the plaint. The decision complained of was that of the Commissioner General from the Income Tax Department, by virtue of the law cited above. In terms of SECTION SA above, the plaintiff was required to lodge the appeal with the Tax Revenue Appeals Board. The plaintiff further disputed that the Board did not have exclusive jurisdiction in revenue disputes. The general jurisdiction of civil courts is provided for under SECTION 7 (1) OF THE Civil Procedure code as follows:- "The courts shall (subject to the provisions herein contained) have Jurisdiction to try all 5 suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. ( emphasis added). Is the plaintiff's suit barred from civil courts? The defendant contended that SECTION 7 of the Tanzania Revenue Appeals Act explicitly bars from civil courts civil disputed arising from revenue laws administered by the Tanzania Revenue Authority. SECTION 7 provides:- 11 The Board shall, subject to Section 12 have sole original iurisdiction in all proceedings of a civil nature in respect of disputes arising from revenue laws administered by the Tanzania Revenue 11 Authority emphasis added) { The clear and unambiguous language used that the Tax Revenue Appeals Board has "Sole, original jurisdiction" 6 Leaves no doubt that the Board has exclusive jurisdiction in disputes arising from revenue laws. The first Schedule to the Tanzania Revenue Authority Act, 1995 contains a list of laws administered by Tanzania Revenue Authority. At the top of the list of such laws, is the INCOME TAX ACT, 1973; thus bringing the plaintiff's suit within the jurisdiction of the Board. Unless the plaintiff could prove that the Board cannot, offer the remedy appropriate; this court has no ground to interfere. That is the law as stated by the Court of Appeal in the case of ATTORNEY GENERAL VS LOHAY AKONAAY AND JOSEPH LOHAY [1995] TLR 80 AT PAGE 96. ..... courts would not normally entertain a matter for which a special forum has been establishe~ unless the aggrieved party can satisfy the court that no appropriate remedy is available in the special forum. " In terms of SECTION 12,13,14 and 15, the Tanzania Revenue \ Appeals Act provides an adequate remedy to the plaintiff. In the event that the plaintiff is still dissatisfied, there is right of appeal to the Tax Revenue Appeals Tribunal under Section 16 (3). Inaddition, under SECTION 25 of the Act, the plaintiff has recourse to the highest court of the land, the Court of Appeal of Tanzania, which is similar to appeals against decisions of this court. In my considered view, the Tax Revenue Appeals Act provides an adequate remedy to 7 the plaintiff if this dispute was referred to the Tax Revenue Appeals Board. For the reasons stated, I have no doubt left in my mind that this court has no jurisdiction over the dispute. Before I conclude, I will briefly look at the plaintiff's contention that the decision in MOHSIN case is distinguishable from the case at hand simply because the former did not take into account the provisions of SECTION 7 (2) of the civil Procedure Code, which state:- 11 No suit shall be open to objection on the ground that a merely declaratory iudgment or order is sought therebv, and the court may make binding declarations of right whether or not any consequential relief is or could be claimed. " ( emphasis mine) In discussing the proper construction of SECTION 7 (2) above, in the case of the REGISTRAR OF BUILDINGS VS.E.P. MWASHA (supra), this court (late Lugakingira,J as he then was), observed at the bottom of page 245 as follows:- 8 '~ ....... a declaratory order is discretionary and, that being the position the court should not be moved to exercise its discretion in the abstract. There should be some tangible benefit accruing to the appellant, and which the court can lawfully grant" Having found that Section 7(2) is similar in substance to the English Rules of the supreme Court (R.S.C.) Order 15, rule 17; this court quoted with approval the construction of the rule given by BANKES, L Jin the case of GUARANTY TRUST CO. OF NEW YORK VS HANNAV & CO (1914 -15) AU E.R. Rep 24 at page 39: " It is the person, therefore, who is seeking relief, or whom a right to relief is alleged to exist whose application to the court is not to be defeated because he applied merely for a declaratory judgment or order". With due respect to counsel for the plaintiff, that is the correct interpretation of the provisions of Section 7(2) of the Civil Procedure Code as stated by BANKES, L.J. and not as contended by the plaintiff. At page 3 of its submissions; after quoting what BANKES L.J stated above, the plaintiff submitted as hereunder:- 9 "Madame Judge, the pertinent question to consider at this juncture therefore, is whether the application before the court is for a declaratory judgment or order which the court under its discretionary powers could grant. If there is an application of that nature, then according to the provisions of SECTION 7 (2) of the Civil Procedure Code 1966, the same should not be defeated with ob;ection from the opposite party. " ( emphasis mine) With the greatest respect, the plaintiff has by the underlined part of the submissions misconstrued the sub-rule and the construction thereof by BANKES L.J. The subrule does not outlaw all objections but confines itself to outlawing any objection raised by the opposite party merely because the plaintiff has applied for declaratory orders only. The defendants objection in the case at hand did not arise because plaintiff applied for declaratory orders only, but because Section SA of the Tanzania Revenue Authority Act and Section 7 of the Tax Revenue Appeal Act provide for a special forum for disputes arising from revenue laws. 10 The plaintiffs submissions in as far as the construction of SECTION 7 (2) of the Civil Procedure Code are concerned are erroneous. All in all, the preliminary objection is sustained that this court lacks jurisdiction to entertain the suit. In the premises, the suit is hereby struck out with costs. K.K. ORIYO JUDGE 5/5/2005 1,852 WORDS \ 11 \