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Last Updated: 25 May 2007
Uganda Revenue Authority V Congo Tobacco Co-Ltd- HCT-00-CC-CA-03-2006 [2007] UGCommC 21 (27 February 2007)
THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL
COURT DIVISION)
HCT-00-CC-CA-03-2006
Uganda Revenue Authority Appellant
Versus
Congo Tobacco Co. Ltd Respondent
[Appeal From The Ruling Of The Tax Appeals
Tribunal At Kampala In Application No. 20 Tat Of 2005]
27 February 2007
BEFORE: THE HON. JUSTICE GEOFFREY
KIRYABWIRE
J U D G M E N T:
This is an
appeal of a ruling of the Tax Appeal Tribunal (TAT) on its ruling of
the 3rd February 2006. The brief facts of this appeal are
as follows. On or about the 30th March 2005 the Respondent
company imported into Uganda a consignment of Supermatch Cigarettes
loaded on a truck Reg. No. 1821 BB/NK
1822 BB through Bunagana entry
point on transit to Ariwara in the Democratic Republic of the
Congo.
The consignment was impounded by the Appellant
(hereinafter called "URA") somewhere in Kireka, Kampala on
the 1st April 2005. A formal seizure notice was issued for
413 out of a total of 2213 cartons of cigarettes found containerized
on the truck.
The truck and cigarettes were then held at the URA
Custom bonded warehouse on the same day.
The case for the
Respondent as stated at the tribunal is that on the 15th
April, 2005 the Respondent lodged a letter of claim for the goods as
required by law. This was followed by a letter of complaint
by the
Respondents dated 18th May 2005 that the Appellants URA
were not responding to their earlier correspondence.
On the
31st May 2005 the Appellant URA wrote to the Respondents
that the impounded cigarettes had false stamps (i.e. made in Uganda),
were underdeclared
and so were liable to forfeiture; proceedings for
which had commenced.
On the 2nd June, 2005 the
Respondents wrote to the Appellants to suggest that a fine be paid if
there was any wrong doing (after all according
to them the URA seals
were still intact at the time of the impounding) and the trucks be
allowed to continue with the transit through
Uganda.
The
parties continued to exchange correspondence. Again on the 30th
June 2005 the Respondents wrote to URA complaining that no action was
taking place. On the 4th July the Appellant URA wrote to
the Respondent to the effect that URA had the power to forfeit or
seize goods within 5 years from
the date of an offence and that the
Respondent was to be prosecuted for the offences they had committed.
Finally the Appellant URA further wrote to the Respondents on
the 11th August 2005 to institute proceedings for recovery
of the truck and cigarettes within 2 months from the 4th
of July 2005 or else they shall be condemned. It is the case for the
Respondent that the URA was by law time barred by reason of
the
letter of the 11th August 2005 to ask them to institute
proceedings for recovery.
The Appellants on the other hand without
disputing the above flow of correspondence maintain that the seizure
was lawful and that
in the main the letter of the 11th
August 2005 could not have been written earlier because the
Respondent’s letter of 15th April 2005 was not on headed
paper and so the URA did not know on whom to serve the notice to
institute proceedings under the law.
The issues to be
determined at TAT were the following:-
|
1- |
Whether the procedure for seizure/forfeiture of the Applicants’ (now Respondents) 2213 cartons of Supermatch cigarettes and truck/trailer by the Respondents (now Appellants) was proper. |
|
|
2- |
Whether the said goods and truck/trailer can be released in accordance with S.216(2) of the East African Customs Management Act Act 1/2005 (EACMA). |
|
|
3- |
What are the remedies are available. |
|
At the TAT hearing only the Applicant (now
Respondent) called a witness as the URA did not.
The TAT in brief
found for the Applicant (now Respondent) in that the procedure used
after the said seizure was wrongful and that
the goods and
truck/trailer must be released and escorted to their exit point at
Ariwara.
The Appellant now appeals to the High Court on the
following grounds (as amended from the memorandum of appeal);
|
1- |
That the honourable Tribunal erred in law and fact in holding that the Respondent did not follow the forfeiture procedure. |
|
2- |
That the Tribunal erred in law and fact when it erroneously ruled and made orders to release the supermatch cigarettes/truck and trailer as legal or transit goods. |
The Appellant URA was represented by Mr. Moses
Kazibwe while Mr. Richard Mwebembezi represented the Respondent. Both
counsel decided
to file written submissions after a brief
hearing.
Section 27(3) of the TAT Act gives the High Court on
appeal powers to affirm or set aside the decision of the tribunal, or
to remit
the case back to the tribunal for reconsideration.
I
shall now address the two grounds of Appeal.
Ground No. 1: That the Tribunal erred in law and fact in holding that the Respondent did not follow the forfeiture procedure.
It seems that there is no dispute that the
procedure to be followed on the seizure of goods such as these is to
be found in the East
African Customs Management Act (Act 1 of 2005
here is after referred to as the "EACMA") and in
particular Section 214 and 216 thereof.
There is also no doubt the
parties agree that a proper seizure notice under Section 214 was
issued dated 5th April 2005. The Tribunal found that the
seizure notice was given to one Patrick Rujungiro, the Respondent’s
liaison officer. Section
214(4) of the EACMA then provides that after
a seizure is made, a notice of claim must lodged with the
commissioner within one month
of the date of seizure. Section 214(3)
provides that if no notice of claim is made within one month then the
thing seized shall be
deemed to be condemned.
The Respondents
state that a claim was made within the stipulated time by a letter
dated 15th April 2005. The Appellant disputes that this
letter in the form in which it was written amounted to a claim within
the meaning of
the section as they could not tell from it how to
effect notice for proceedings. The tribunal found on the basis of the
evidence
adduced before it that the letter of 15th April
2005 was personally handed to the commissioner of customs Mr. Malinga
by the same person served with the notice, Mr. Patrick
Rujungiro. The
tribunal also found that the letter though not headed had a stamp
bearing the address of the current Respondent. It
according therefore
also found that the said letter complied with Section 214(4) of the
EACMA.
On appeal all that counsel for the appellant added was
that the notice of claim dated15th April 2005 amounted to an
admission of a
false declaration.
The Appellant in its wisdom
during the TAT hearing did not call any evidence on this point. The
Appellant just relied on the documents
tendered at the
tribunal.
Looking at the letter of the 15th April 2005,
it clearly identifies the consignment seized by its owner.
It
reads;
"Few weeks ago CTC (meaning Congo Tobacco Company – my clarification) dispatched a consignment of Supermatch cigarettes via Uganda to the Ariwara market in DRC. I am informed that the truck and consignment were impounded in Uganda by URA... The purpose of this letter is to request you facilitate the smooth transit of this consignment via Uganda to the exit border..."
It was delivered to Mr. Malinga the
Commissioner of Customs who on uncontroverted evidence promised to
handle the case. Objectively
I can not see how anyone can say that
this was not a letter of claim.
True the letter did acknowledge
and regret the incidence of 413 cartons which they claim was an
anomaly from their stores where the
goods were ordered but not
documented. However, in my view that does not make it any less a
letter of claim. I am unable to understand
why the Commissioner of
Customs armed with this letter did not institute or require the
Respondent to institute proceedings within
the period required under
the law i.e. within 2 months.
I agree with the tribunal that the
Appellant’s letters dated 4th July 2005 and 15th
August 2005 were time barred as they should have written and handed
to the Respondent latest by 15th June 2005.
Accordingly,
I find that the first ground must fail.
Ground No. 2:
That the Tribunal erred when it erroneously ruled and made
orders to release the Supermatch cigarettes/truck and trailer as legal or transit goods.
Counsel for the Appellant submitted
"...The order to release the goods to the Respondent on account of a "failure to observe" a procedural requirement amounts to condonation of an illegality" that was brought to the attention of court. See CA No. 4/81 Makula International Ltd V His Eminence Cardinal Nsubuga and Another..."
To the Appellants this was all a procedural
error.
Counsel for the Respondent submitted that the
Commissioner failed to meet the time lines in Section 216(2) of the
EACMA which provides
"where the Commissioner fails within the period of two months either to require the claimant to institute proceedings or the Commissioner fails to institute proceedings in accordance with subsection (1) then such a thing shall be released to the claimant"
With the greatest of respect to counsel for
the Appellant Section 216(2) is a legal and not a procedural
requirement. It is not a
mere technicality. Perhaps this submission
best sums up the attitude of the Appellant in failing to observe the
legal requirements
because they erroneous view them as mere
procedural and technical rules. This is clearly unacceptable.
I
find that TAT in releasing the goods simply was following the law and
did the right thing.
The second ground of appeal accordingly
fails as well.
I accordingly dismiss this appeal with costs to the
Respondent and uphold the findings of TAT.
Geoffrey Kiryabwire
JUDGE
Date: 27/02/07
27/02/07
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