20110601 TZCA Dar es Salaam 1

:l:rJ THE COURT OF APPEAL OF TANZANIA · .AT DAR ES SALAAM . (CORAM-: NSF KELA, J.A.. KI MARO, J,A., And MASSATI, J.A.; CIVIL APPEAL NO, ·93 OF 2009 TANZANIA REVENUE AUTHORITY .. ;.............................. APPELLANT VERSUS NEW MUSOMA. TEXTILES LIMITED ............................. RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Mwanza) I •• • ;•I C{'",., ;..:,.,:;,.:1 •• .-: 1/"1""'-I." .,·-~••••>".,.·,., ~••-.,"'T""""...::.,~:r-..!.f'l,..C.\::t;r.:i:.: l~:t .. ~.:.o..;~ L.,_ .,t:-; :~~\:,:..r•---.:•!t~t.~~~~ 1 1 - _ _ ..1,.._.;,.,_._ _ _ , .. _ ......... ~ .,.~-~-1-=.~,: 23 fvi'ay ·l!t. 9 June, .2011 MASSATY, J.A.~ The appellant is a revenue co/lection agent of the government of Ta.nzania, established u·ndei- the Tan_z:a·nia Revenue Autho.rity Act . . . . (Cap 399 RE 2002), The respondent. is ·a limited liability- company ' . . ~ that owns a textile factory at . Musoma in · the northern part of Tanzania, tt ." the sum firmly and jointly j=stab-lished by the 1,. ; plaintiff and the defendant Js the defendant's ...' ,., . liability towards the pla.intliff for plaintiff's .• I . .gooqs which were . in po~session of the .. I .. defendant in M.usoma, "i;. ,,.. I . 1:ii,;;,F,, '.{;:,.--,~~\i~.-,, 1 · In its respons;·=~ib tAl1 c1~f~· th~ ap~Mtf:ant, averred in para$raph 1 · ifi~/t\ 2} ;t\fD,~- ~~~lt/'· / .I; '· r:5.;. =,.,..,,..,,,,,...,.-.......,...•..,~,~1· 1 •·~::::.;:.~~"'·,3: .-·.-.9Gl1~.z.:~£!.¥~~ . ~ ,.; ' -~-..~~at8.:.~T\tt;~fl., ~: /. ~r ~4$~~~6§7:,~~fa 1-ci,,":':';,'';;!,..... · ~•-~,·=-·=~~---=..,_;:~ · {~sf~.~.~. t. j ~~:~l .. .~i;l.! h1.iits. ,fj~m 'Ittff-,· ~~:i--..jl \:-~ .. •{:~4 ~~¥£~:~~-~·~".:3.~~?J£;E . ""''-~•"'-.. .. \ '•... . l·,q~ lff [ [~,..,•or _,;J's· ! 1 "The 1"',der:ldi;MilMi-jttt the said SIJm of Shs. ·-2·r~~8·~3J;ig1J:~)~;s not a sum firmly established as the defendant's liability towards goods distralne,i by ~e 1st defen_dant and which were not ri;::turned t<iJ the plaintiff or were damaged. 1' In its reply to the written statement of defence, the respondent " ... as regards the allegation· i~ paragraph 3 of the . written statement of . defence in particular, the plaintiff strongly disputes t~e allegations that the distrained goods remained in the hands- of the plai-ntiff. The plc;!intiff ' ' further avers that the goods which were distrained by the 1st defend.ant as per ... :.. ''.. 4{Jzt!,rej~,~:'~\)~;/:,,: As· the parties wer~Jhusf~t ist~e, 71~ st~Jwent to trial. One of '-h · ~- L ,e issues ,rame d lri ·h/ ~$'.-,:. 1. \ i :i8 · br h d b tb was _iji::t~t.~,\}~11tt!~\t~~k'9~i; s ~~':::~:~~·~¼.::;;;::·~~:-;,:;'.~t·;: l \· J 1 ~i~·~.$j~'!- ij!~ ,1 . . . . . , _ . . _ . . _ , . _ . " - , , ............ ::,:..••-::: . .: i i . ~ ~ ,.... : flr"\'\\\"\•. ':-;~--;.':/ l~r-~•.c.::r:.. !(\j~11':..-1:~Yl:·~..~.:-:-p:-··K- Pi.:•: ~t:,;~'.jfilW~rriftt~7ii~tR'e ~~!thti.ff's dhtr£1ne~d~:glf.~s i;,;~;~~ct-11~:=i~ ·-~-- . --::=:.:;~~;·~~·~~- ~1'{.fit' lt~·;;;·, . ,~ -:; t~~:.r\ \.,. " ~%1- \!::f.~ ,.i;· ... -. .,•: I,: . . - ~ · ~,- ,-ti!-,·' t' \* i; ,..... •:"" ,,:. its well reasoned j~dgme~t ~~t~~§Zii~!J~Q2f~-~ trial court found for i I j . the respondent, and ' aw~;d~d.I~I~I;s§:~;67r;55/~ as damages . as ' ii ·• i _·the: · ''I j " ... sum firmly'_established by the plaintiff as total value of unreturned and or damaged ' goods distrained by the l st.defendan( \ I I i II I \ --------- - -·- - - ----- -· .. ____ .. .. ' ........ . Aggrieved by that decision,· the appeiiant has filed the present appeal. . . fas before in the trial court, Mr. Beleko and Mr. Haule, learned counsel appeared for the appellant, and Mr. ~alum· Ma~ongo, learned ' ~ . . .. counsel represented the respondent in this appeal. . , ,'I I The originq/ .-memoranduni of appeal carried three grounds of appeal but · on the 25th __Fepruary)..:·,2011, the appe·llant filed a .,,1t.::<t;r~k·~t~t.;·,~~;j{tt.i.t~ . supplementary mempJjnd~r;n cg:·· appe~~:}yVhich contained one Ii\ l.!~~: "ii~ / 1· 1 ( ~-•. I r· ,., fr:,?.; i °' f-:·;:( I ; s~::=~~:i3~tli:~~iit{~~I ~~~~~, . . ."4. That th~~)i~:l . -i,ri-ril,;J;,:1;0 in hearing 1 ) ,~:;.. J · -~'w:JJ;.!.::§:· !~~k .. ·••t Z' and determi'nJ.ngf~ 7~~~-~-it ,\yvhile the trial. . court had ··no"]urisdlction: 1 ;···. At the ·hearing of the appeal, it was. mutua~ly decided that the 4th ground of appeal which ·questions the trial court's jurisdiction be disposed of first. I l i I i ,~· ~~:.t-/ ',·J .,,, ./ /' Mr. Hau!e; learned counsel, who a~gued this ground, briefly submitted that the suit arose from a decision of the Commissioner of Value Added Tax to distrain th·e respondent's goods, to recover some overdue tax.· The Value Added Tax Act (the VAT Act) (Cap 148 - RE . I . ?002) was one of the laws administered under the Tanzania Revenue l( . . . Authority Act (Cap 399 - RE 2002); · Under section 6 of that: Act a · person who is aggrieved by any decision of the Commission.er - . ;: , General under any of his powers in the laws he administ~is ~quired to .appeal to the B9ard ·s~t up under the· Tax Revenue . .· ·.~':!:~:,:\~•1 .... t::,:~:~~:·.:. ;. . Appeals Act (cap 408r.,t1•''RE~~,--:0ozft: 0B-YIJ1/,l~~;)~f section 7-of the Tax· 1 . "'·'· I/1 \ •·:,f:.. !IllI\ ,,...y. . t'OI'<' ',;•/:fr! Revenue Appeals Acti\Y~he;/ {fax. ~ev~hu~ k.i$eals Board, has ~'sole 11~:.t.~:~;.:~:~;:·.:.;/~~: ::·:;·~::~~.:•~"- .----~~u.L. . -.~ . .~(;:[.~~ (~•t:· : '" JI:~~:'.?. }....~· \ fu~ ·-- .:--::::..t57fg1naf1tlf:ril1~rGr.i' in ~"'jJ '\?62e@cJFi·:-. ~}if.* ~vil r.?mtire"~'R=-•r.~~ -. ct.. pi ....._. ~~:: •.;1;~_tl:·~i \~· I~: ....;~.~~.-; ~~~~ -~ \w.o~~~.!:;~~:-.:~~~:~~~~~;~:::·.: !.-:,,. • 1 dJ_sputes arising from\ re~e~µ.~ ~f)~~sitf~dH:ttf.51stered by the Tanzani 9 : r. .'J...tfi? ,cl:.l!. t~--~.:.\~-~s~::J:'. ::.-:,. I Revenue Auth~xity. s·o)t p~~t w~s· .qiien~{t?·r;:;the respondent to file a i I . ·",::-~·-: ::~.-:~.../ ....~_:'.:·••'·~~ I · suit, in, and the trial Hig~ Court had no jurisdiction to try it. In order '' ' ' . to reinforc~ his argument, .Mr, Haule referred us to the decision of · this Court in TANZANIA REVENUE AUTHORITY vs KOTRA . . COMPANY L!MITIED (Civil appeal No. 12 of 2009· (unreported). He thus Uiged us to aiiow• the appeal, and quash the proceedings and judgmen_t of the _High_ Cou;t, vvith costs. But Mr, Magongo, had a differeht view. He argued with force, that as the parties had settled· their_ "tax -dispute" by establishing a joint'i.:committee which' sorted out the. parties' fiabilities arising from the. appellant's decision to distrain the respondent's goods, th.e tax ·' di~pute no longe_r exJsted and _the suit. was ·only instituted in order to enforce fhe agreement . bef9t1eithe . ' .. ...,:Jf.:tj.:~ L:t. pa:l;.tles '~·,1(·-...,. in which the appellant ·"admitted liability". for -~~ft}itfn~d,~~;)~~-$*-ai~inguished KOTRA's ttfJ J ·"\ itr .i 1•· \. rtt1 "\, , , b ,., . . \ u, .-. ,.,. . _. cas: in th~t, in_t~~t. cj . .·_·•.•1.~-C.·•~-·~';••-I> ·~ _,. .••.•• ~,...,.,.-~ :..ooc=- 11~:.r.r~l,.r%~~~J~.rf··~ la'.~~-"~~.~-~,:~-~ diE~~~-.,~,:~:-~ 1 ~~~.tr. 1, ... ~~~u:'· ilf\·~\':'\:_, 'i.;:,,tO::~•J:• ~ ··"~'\.+•... ·'7'",i;.~..-;;..:.T~ .. -~ .,.~;:.;.:-r.•::="~'r,i-;;:.;. ·,: .. i ~!.~iygr~Ekn~i~to~~~~~isp ff-~~>;hic~'.1t,.!rn,:f;: ~~s ;tr..:- Co-~~'::'.j~::em~;,pre;~rff.:.w.-~~---·· 1 t!.(~1::}7~t~i~~ i-•;f•~t~~!~-c~ 1~ ~ \~-·-· ·..,,:;:'; io\1,"1 ". • o..; , ,-,·r:rt• I,,·. ,:1' n '""-· •- t~f~ ~._ ?-.: ~-:t.~ ,,_.,. _.;r t i case, which makes no r~f~r1 ute, neither was any .dJt~~};¥iL~isJS 1 /: ·<,.i:-. "f' ·wt,:· /f.. r.,,,_:;. 1 ~ issue framed on the· subjedt,s1tikb..iJii~J;}J-!e: stretched his argument ) ' ,j. . . J by pointing out that, that was why no objection on jurisdiction was l j taken at the trial court·. He thus prayed for the· dismissal of. this i' I ! ' I ground of appeal,. : VVe must first reaff1rm what. \•Ve said in KOTRA's case that a a\;e:n r.·n· 0 Po 'tnt " Qf' __ ] llr'1c:riirf-ion --,'"''-' , iliu he !.-.;.J.~-- n...::,V i..J,.. ""t ;:;n\/ .-:::i'1,-,Prf ?- ~!•i rime -..,1,,._ ' - " V l a.,..,,...,e-.1 J,Jt,,' 01 ~,..,~ '-h~ IUI 1..llt: 11 1 first time. So if it was not raised in the lo_w_er court, it can be raised at this stage. l -:Next,· we think, the. law is clear and counsel agree that the Tax I . ·, . Revenue Appeals Board set up .under-section 4 of the Tax Revenue .·. 5' S, i ~,, ,'' Appeals Act, has sole original Jurisdicti~n in all proceedings of a civil : I nature in respect of disputes . a;rising Jr,om revenue laws administered ... ,.:.',~.:,.· ,: -.;~~~:l~.:;h 1 by the Tanzania ReveT1J€~~~iA0°¥)tf :r,.: :r< lf ;~·11~1~\~f¼o·J.undoubtedly ,,., •il"I;:· the law in ~'fJ /[\ ~:,; ; ! '\ t,iJ . the face of section 7 (l~of it~~ q~l1'.,.pr6de'dt.([g,fcode that: ~i;~,1::1: :;~~· · · . . . ~~ , r \ •,i!:',• t Ll s:1i · r±~:5:~~~~~ · ~=ZE:~~~~;; "The Court.S, •:s3.p. j:b~:e~~.:'t~e prov1s1ons II · ). f . ir..1:.:..':f::i,r..:_.,.~f. ... 't::::f:::-::·J~-~..~-...-~ ~:.. . I. i herein con@!~qecJ)·l,~~f~ ~-~5\~difi.Ei'n to ~ry all ! i · stJits of civil ·n'afdre"··exce·pti'ng•"suits of which i I • \ their cognizance is · either expressly. or I · impliedly barred." rI !, II ! -·~--···--·--···- ·-··--------·---· ---··- . ~ ................ ···-··~ __.. _. "C ., -:md that I \\Courts would. no~ normally ente~ta·in a matt·e~ for which· a. special . .. form . has beJ~- I established unless the aggrieved party ca? ·satisfy :the court that no appropriate. remedv is available. in the special forum" I . (See ATTORNEY GENERAL v · tOiifAY AKONAAY AND ANOTHER (1995) TLR 80 followed in JANZANIA REVENUE I 1 AUTHORITY .v KOTRA COMPANY L1MITE D (supra) " . . ,,~i:<Il~::13:t~:~]~}.i,-. : . . It was coritenq~tfit'acirff"' ncf serf&usliltlisputed also that the · f,1) / \ f!-', Ii\ . ;/11 genesis of the prese'klci/sh~te.Jlas/~ \ 1 of ·distress on the vii~knt . ~ . ·\§.~~i£J~- r~~~~,:·¾rt~t, . .. -•~·"'· :,~,~-, ,~, .. _. --~=•~''••=.-" ;:f~~:;~~~~t~.;:,~~~~-f~; =.< !~~;:~:!t~s.p.0.oo.ene~1fGi6GJs is~., d. by tine qpmmi.ssiof.ler bfl'iJaltJe....Aaclecrrax- 'w~i~ ~-l;J}~\{l·~;,, ·-;~wff '<l~i ..-::,i,)f; :-t. appointed under sectiortstJJi~~,\~Ai\~&;·"'futid \'. e.~- ,-· ,#... r\~~- ,: .,,, . . h r ,. also that the VAT Act ~j. .:' . ,.,.,... .. I'"'"" . t •. -.,1i· •·~::•... :.--»f,:.:,.,.'";~~.:8:...c,.~ ....:.:1,r. . I 1 is one of the_ reyenue'·-ia~.:---~~i']}ffi~J~F,~,d....bYf the· Tanzania Revenue . i Au_th~rity, and theref0re squarely within. the purview of section 7 of the Tax Appeals. Revenue Act.· 11 - I Looked at from all those an.gles, we. thinkI. the only serious issue 11 :: that cries out for determination is whether th~ respondent's claim as . . I ., ·I I l I i j I i I ··--·- ---·-••''" r: presented at the trial court was ··'a proceeding of a civil nature in respect of a d1spute ::rising from a iev·enue ·,avv. \Ne have no doubt_ that it was/is a proceedin.9 of a civil nature.: So this aspect should not detain us;. . .. 'Mr. Magongo, if we· understood him well, has suggested two answers to the remaining part of the issue p·osed above. The first is .,·, that the "tax dispute" is no more and that the ·suit was only instituted to e,:,force an agreement b~fy:veen t~p-~. parties. · That is an . . . ..... ;~;;~: · .,:',;. \, \~ :.~-~~•. ·, unsatisfactory · answer. . rn:::1eA~\[cfifp\tt~r:{~~~~-l£;;1more why did the j,:,_;_.;i Jll: \7:'. f: \ f:.•+ · .appellant take the matt;t~S~cdul~'? ,ff~thJr~ \~Ji,i-; tax dispute in the_, .. ..... . ·•---~,~-~•"''""•-=-· ___ ,_.,,.,,,.,,.~- ~~' .~iiri'.,,. /'if{~\-~~~j t~1 1iiz~~;,:;;~~fi~;;: ~;~::;~: 7 ,· ~f:i;fsf~pl:1:fC.~.:f!~~f:J e1::7esp·5ndemtl .admits' wblo settf*~ it''ari"'d"'"noi,Af"'-if it ·-·· ·- ~~ · ~ ~~;.:~~~-•·yjf;ir.i. \~~I¥J'.f1 •t#.fiit:.JS~:•. 1 ' was a third ind~ endent ~~'-- ·:. , . ~ 1~~{'$:e~l~&-;.\f/did ~e/it have the i ,. f~~• .,,;••(·,~.ir4b-~.!.),.... \· -.. . ~ I power to do so iv~n that ..~:lider 1 •• f.he~1i'.w{\9~,.d1~~utes m'ust first be \ ! .. ' . ~t.r•.,,:a .... .1,.,-.=:-.-•.......... . ~ ' referred . to the Tax Appeals 'Board.·. In our vi~w, the . tax dispute .still . persisted, and this is demonstrated by the pleadings of the parties. At the beginning of this judgment, we deliberately picked · several paragraphs from the pleadings of the parties, namely I \ ---------- .. 10 • paragraph 5 of the plaint, paragraph 3 of the written statement of ~uerence ~ ano' paiag;aph 3 of tl·1e repiy_ 'to thl! written ' _.. stat_ement .·-·· 'of' defence. These paragraphs kept on .referring to whether or not the appellant still had in possession the responde~t's "distrained goods." . If as. is clearly admitted by· the· parties, the alpellant restrained the . ·. . I respbndent's goods, it cannot be·disputed thatlthat wa·s in exercise of the .Commissioner;s powers under the· VAT Act. Whatever claim ,' f ' ari~es out .of the exer~ises of those powers~ i) o~r view; is a dispute .. I . arising from that particular r~venue laV,;{1.:--~nd therefore justiciable in . i~i;~-'--~~--____;:_______ ~-------_-'----1-".',):.-·<\7,;_):~t•.\~.~~-:~·=:...-.:,:l.:tT.(Z'.:'1;::fi~~-i:',.-,.iJJ1~lGt the Tax Appe~rd :·:~;..\· j'/\ (:;. ;' \ }f:J j/\fl ~ \ 1•• : \ i?if;.J . ft~.~: l \_ t•.. P' ·"' • I ,, ,... ,,-, / ' \ f~~_i: \. '•-'-: s,~;:;;;1~;~~n#;iswl~~Ei~~)-l;:· -~on~I~f~f' .. . \\\qf '!]: \1\1.ff:f 'f~Jft\i~';f I that there was no refere~c~,+,t~~ ~~V~t?.:fft.aJ:;sp~fe· in the body of the . _; /·:··•··~f,'.~~;,t;t:';c'l;·' .r,,,..w, \:. plaint or p'.ayer~. The an§vyi{tgJbgfji_pfo~ided by thi~ Court in KOTRArs case, where the decision ·of. the Indian case of RAM . . I . . SINGH vs GRAN PANCHAYAT (1986) 4 SCG 3.64 AIR, 1986) SC . I' I I . . 2197 was approved. In the latter case it was\ held that where the -! _____________ _____ _ civil Court's jurisdiction is exdud~d, the plaintiff _.:..~cannot be allqwed to \ I cin::umvent the bac by the clever drafting of the plaint. in this case 1 I . \ I i! ,, • . I . the respcnden(s cause of action is crafted in paragraphs 5 and 6 of t-h I · · -r ... · " · h. · ·h · Id.. ·. I _-. . ~ . . . .. •. ,e p aim. ! , :era. iS 2rnegea t at. e respon ent c aims rrom the i: , i~ .. I appell'ant compensation for goods 1'that were' in possession of the .. . . I defendant but some were not returned and others .damaged." But from the plaint,· it is not clear,. how the slid .goods came into . . I . . "poss·essionr' of the appellant. We can only infer that from this style i I of drafting the plaint, the respondent was devJrly trying to avoid any I . I I ., reference to the fad that those goods were seized under a warrant of di~tress 'issued by the Com~~?~io~_er:<f~[iYfT, . .· I . But that did not . I r ~- . _:ft].!/.:.....--.-· !t~l;:i:':~=-~:i:~~~\:~:,:. ~.T . carry the respondent ver){,:ira'f: 1~s"'sHown/~bo%~in 1 the subsequent ,·:.,;;,<l I j-\ 1;•. Il\ ~l,,;;,'l · t~°'t,Cj I \~ k, i \ I, F;'l) ' .pleadings the respondent ivd ~- ;ivisl,w•;. ·· . ~,~1. :~ti he N~~~?.JJr~_;ct~.t9:;,:,;:.:. ~;;:-,.~: ·.. ·..,~,"" ~~9Jfu'?-" \~-·-{.::,~i;- [i . -~:~;51:;;,:;.:;:;;;;::..::::.~_,. · __.. ,..···- \ ' r.efer.-Jo:.:thE:;_::~~Qi.'SERamee!1~100 '. ::~_ iri""fiis teplfi to tJ;1.~{wtitten statement _of " . ~~-,- \11_~- 'f,§f\Y:,~\ ~"'E.~·. ··::·:::~-- ·.·. •----·"·-'""'' ·'"""'~~... · defence. In view of the a~9v~ J~~t}f~!r-~[~'fr:~~:~wer to the posed i ; .\ {.-:~---~~:;· f; 1 if:·"·"'''••a~.-•,.·-···· . ~;. ~, \ 1 '' ,. \ ... ;-./- ,~:, \ 'I \ • ta~;rl(tfuf6c.e. issue ·is that the matter that. 'Was\ ., •. the .,.:J .......,...":=~· _,_ I ,....... High. Court by way \ of c·ivil Cas.e No. 22 of 2006, was a proceeding of a dvil nature in ~ a . dispute arising from aJeverl.ue. JB. to wi~, the Value Added Tax Act (supra;. Since the law is one of those administered I by the appellant arid on. which the Tax Appeals Board had the sole original jurisdiction to determine disputes arisinJ therefrom and sin~e --- --·· ··- ------ -- • the respondent has not shown to the Courr that he cou!d not obtain · an appropriate remedy from the Board, the High Court had no jurisdiction to hear·and determine the suit· We accor_dingly allow the ·appeal an-a quash the proceedings, and j$/dgment as ihey are fruits of a. nulliJ. The . appellant shall also · have his costs. · ,., I It is so ordered. , . ify that this is a true· copy of the original. 1 ~ I ,. ij t .1 • -•••• • M - • • - - • • • - • • - - --•• - - • - l