Tanzania: Appeals Court Rejects UK Firm Application With Costs

UNITED Kingdom (UK)-based Oil and Gas Dealer Conglomerate, BG International Limited has lost another bid to include more documents in the appeal, seeking to challenge payments of over 4.2bn/-tax to the Tanzania Revenue Authority (TRA).

This followed the decision by Court of Appeal panel led by Chief Justice Ibrahim Juma, Justice Stella Mugasha and Mary Levira to dismiss with costs an application for reference lodged by BG International Limited, the applicant, to oppose the decision of the single judge.

In the application in question, the applicant company, through its subsidiaries, which provides oil and natural gas products, was challenging the refusal by Justice Sivangilwa Mwangesi, to grant him extension of time within which, to include some omitted documents in the record of appeal.

However, according to the judgment delivered in Dodoma City recently, the appeals court panel ruled; "None of the grounds (raised), fall among principles warranting reversal of the decision of the single Justice. On that account we dismiss the application with costs."

The justices were mindful of the legal principles governing references which are to the effect that the full court looks at the facts and submissions the basis of which, the single Justice made the decision and no new facts or evidence can be given by any party without prior leave of the court.

They also pointed out that the single Justice's discretion is wide, unfettered and flexible; It can only be interfered with if there is misapprehension or improper appreciation of the law or facts applicable to that issue or misinterpretation of the law.

According to them, the ruling of the single Justice shows that the dismissal of the application was due to the applicant's failure to initially apply to the Tax Revenue Appeals Tribunal to seek extension of time to request the omitted documents before knocking the doors of the court.

"Reliance on Rule 90 (1) of (Court of Appeal), Rules (by the single justices) was in our view justified because it prescribes among other things, the limitation period within which, the appellant can request to be supplied with the proceedings, judgment and the decree from the Registrar," the justices said.

Furthermore, they said, it really taxed their minds on what made the applicant, who had initially requested to be supplied with the requisite documents from the Registrar of the Tribunal, subsequently, went to the Tax Revenue Appeals Board, seeking to be supplied with endorsed exhibits.

"We wish to point out that, since an appeal against the decision of the Board lies to the Tribunal, on appeal to the court, the entire documentation on what transpired before the Board and the Tribunal has to be sourced from the Registrar of the Tribunal and not otherwise," the justices said.

In this regard, they ruled, it was entirely wrong for the applicant to apply to the Board to be supplied with the documents which were a subject of an appeal before the Tribunal.

They said that such position is what made the single Justice to hold that, following the expiry of 30 days within which the applicant had to apply to be supplied with the endorsed exhibits, the applicant ought to have applied to the Tribunal for extension of time to be supplied with the omitted documents.

"In view of the aforesaid, we think it is not justified for the counsel for the applicant to blame the single Justice for the dismissal of the application before him with costs. As earlier pointed out, the dismissal was due to the obvious fact that it was not tenable," the justices concluded. The applicant is a foreign company based in the United Kingdom, but has a branch in Tanzania. It is engaged in oil and gas exploration effective 2010. Sometimes in August 2012, the respondent conducted a tax investigation in the affairs of the company in Tanzania.

The audit covered several taxes, including corporate taxes, withholding taxes and employment taxes. An issue arose as regards the company's employees who are based in United Kingdom over nonpayment of PAYE and SDL taxes.

It was discovered that BG International had underpaid PAYE and SDL for the year 2010 and 2011 by not paying to its employees, who were based in United Kingdom. According to the findings, 405,830,000/-and 64,147,524/-were not paid as PAYE and SDL, respectively in 2010, making a total of 469,977,524/-.

The preliminary audit findings by TRA further uncovered that 3,284,431,198/-and 528,323,580/-were not paid as PAYE and SDL, respectively, thus making a total of unpaid tax for the year 2011 to be 3,812,754,778/-. Several communications were made between the parties without any agreement.

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