3-
Remedies.
Another issue namely;
4- Whether the plaintiff assigned the full claim to DFCU Bank?
I shall address this issue with the second issues before I address myself to the remedies sought.
Mr. Oscar Kambona appeared for the plaintiff while Ali Ssekatawa appeared for the defendant. The first issue is whether on the basis
of the disputed receipts the plaintiff is entitled to a refund?
Both parties agreed that the documents on record spoke for themselves and did not call oral evidence in this respect. Both parties
equally referred to the evidential principle that he who asserts a claim must prove it. In this regard I was referred to Section
103 of the Evidence Act. This is because both parties clearly kept oscillating the burden of proof between them. Given the age of
this transaction and the absence of certain documents this is not surprising. At one stage M/S Stanbic (U) Bank (at the time of this
transaction was called Uganda Commercial Bank) was brought on as a third party for indemnity by the defendants. Stanbic bank was
the bank where the plaintiff made their tax payments and they also had an agreement with the defendant to collect taxes on their
behalf. M/S Stanbic Bank volunteered to look up their records for the transaction but were unable to do so. They were eventually
released from the case by the consent of the parties. Both parties raised spirited legal arguments. I shall now review the principle
arguments put before the court.
Counsel for the plaintiff submitted that the plaintiff had receipts issued by the defendant (Exh. P.1 and P.2) to show that payments
were made to them. Furthermore the plaintiff was issued with discharge notices (Exh. P.10 a, b, c and defendant) by the Principal
Officer (Technical) of the defendant authority confirming that the first plaintiff had completed payment of taxes. Court was also
referred to other documents including warehouse releases Exh. P.18, P.24 and P.25 as evidence of clearing taxes.
Mr. Kambona submitted that the plaintiffs had given evidence asserting the affirmative of their issue and therefore the burden of
proof shifted to the defendant to disprove the alleged payment. In this regard I was referred to the judgment of
J. K. Patel V Spear Motors Ltd SCCA No. 4/91 (unreported)
He also submitted that the defendant’s documents were prima facie evidence that the plaintiff had paid the taxes and referred
to S.167(1)(e) of The East African Customs Management Act 1997 which reads in part
“…the production of any document purporting to be signed…by…any person in the service of the Uganda Revenue Authority…shall
be prima facie evidence that such document was so signed or issued…”
Mr. Kambona submitted that the defendants had not provided evidence to the contrary.
Mr. Kambona further submitted that the defendant’s contention that the receipts are not genuine because they cannot be traced
is not supported by any proof and the burden lies on the defendant to prove otherwise which has not been discharged. He referred
me to the judgment of Justice James Ogoola in the case of
Bhabilia Habib V Commissioner General URA (1997-2001) UCLR 202 where he held that
“a)
The burden of proof of overpayment of taxes in a dispute lay with the plaintiff. The plaintiff successfully
discharged this burden on the balance of probabilities by producing original copies of receipts for payment of the tax in dispute.
The court found this evidence to be more credible than the defendant’s evidence which court found to be filled with irregularities.
The plaintiff was therefore entitled to a refund.
b)
The receipts were properly issued to the plaintiff. The defendant’s contention that the
receipts were issued fraudulently without verification could not hold as a defence to the plaintiff’s claim, since by their
own admission, the fraud was perpetuated by the defendant’s agents and could not be imputed on the plaintiffs since it had
no control over the defendant’s agents…”
As to the memorandum of understanding dated 29th March, 2000 between the first plaintiff and the defendant whereby the first plaintiff acknowledged that the taxes were due (i.e.
Ushs.185,856,006/= and interest of Ushs.18,318,333/=) counsel for the plaintiff submitted that the plaintiffs had no option but to
sign it in order to salvage the trucks and service the loans with the bank.
Mr. Kambona referred me to the case of
Maskell V Homes (1915) 3KB 106 where Lord Reading C.J. held at P118 that
“If a person pays money which he is not bound to pay, under the compulsion of urgent and pressing necessity or of seizure, actual or
threatened of, his goods he can recover it as money had and received. The money isn’t under duress in the strict sense of the
term, as that implies, but under pressure of seizure or detention of goods which is analogous to that of duress…”
Mr. Kambona also argued that payment under protest as a result of implied duress by the State does not preclude the citizens from
bringing the suit to his side to assert his legal rights. In this regard I was referred to the judgment of Holmes J in the case of
Atchison Topeka and Santa Fe Rly Co. V O’connor (1912) 223 US 280 at 285 – 286 relied upon by Lord Goff of Chieveley in the case of
Woolwich Building Society V Inland Revenue Commissioners [1992] 3 All ER 737 (H.L.) at P. 760.
Mr. Kambona for the above reasons invited court to disregard the memorandum of understanding. Lastly Mr. Kambona pointed out that
even after the memorandum of understaning dated 29th March, 2000 between the parties, the defendants still later on the 24th September, 2001 sanctioned a tax refund of Ushs.37,881,228/= to the plaintiffs, which money the defendants had initially denied.
This is his view watered down the effect of the said memorandum.
Counsel for the defendants submitted that the plaintiffs had failed to discharge the burden of proof of the payment of taxes within
the meaning of S.162(b) of The Customs Management Act and that the Commissioner General was not satisfied. Mr. Ssekatawa submitted
that in order to reconcile the plaintiff’s accounts (and probably thereby prove that they had paid the taxes) they were required
to prove to the defendant authority:-
1-
Original payment receipts as requested in their letters dated 28th February 2000 (D.10) and 3rd March 2000 (P.11).
2-
Original Bank Payment Advise Forms (commonly knows as BPAFs).
3-
Mr. Ocheger the plaintiff’s Clearing Agent who made the payments into the bank.
However, Mr. Ssekatawa submitted that the plaintiffs instead only provided
a)
Receipts with BPAFs (which I believe is what the defendants wanted)
b)
Receipts without BPAFs
c)
BPAFs without receipts.
A reconciliation of the receipts with BPAFs (“a” above) showed that Ushs.55,000,000/= had been paid (Exh. D.12) and that this money was refundable. Receipts without BPAFs and BPAFs
without receipts were rejected (“b” and “c” above). Mr. Ssekatawa submitted that the plaintiffs failed to prove the authenticity of the receipts. These receipts now remained
disputed as they are not reflected in URA Cash Books and Till Sheets. Counsel for the defendants also faulted the plaintiffs for
not producing their clearing agent Mr. Ocheger for interview.
Mr. Ssekatawa strongly submitted that the first plaintiff voluntarily and without duress signed the memorandum of understanding dated
29th March 2000 where he acknowledged indebtness to URA. He argued that in such circumstances this amounted to an admission and that the
plaintiffs were bound by their voluntary contract which was enforceable by court. He referred me to the judgment of Sir George Jesser in
Printing and Numerical Registering Co. V Samson (1875) CR 19 ER 462.
I have perused the pleadings, the evidence and the submissions of both counsel on this matter. It is evident from the evidence that
this is a long and drawn out matter basically arising in my view from the failure by the parties to reconcile the first plaintiff’s
tax account. At the heart of this dispute is what documentation should be regarded as sufficient to prove that the said tax was paid.
The defendant makes the case that the plaintiffs should produce all its receipts and corresponding BPAFs which at the end of the day
should correspond with the defendant’s Cash Books and Till Sheets. The plaintiffs should also make available their clearing
agent.
The plaintiff on the other hand argues that the various receipts, BPAFs and indeed a third document known as discharge vouchers are
all evidence that it paid the taxes reflected therein.
What are these documents that the parties are contesting over.
The first is known as a BPAF (Bank Payment Advice Form). This is a document issued in quadruplicate as follows;
1-
An original copy for the bank.
2-
Duplicate to Uganda Revenue Authority
3-
Triplicate to the tax payer
4-
Quadruplicate retained in the book.
The BPAF is headed
“Uganda Revenue Authority
Internal Revenue Department
Bank Payment Advice Form &
Pay In Slip”
Looking at the BPAFs (Exh. P.9 for example), it is exactly what its heading states. The first part is a Bank Payment Advice Form while
the second part is structured as a pay in slip.
The payments all have to be made through the Uganda Commercial Bank which is a collection agent of the defendant. This is a document
of the defendant and has to be signed off by an assessing officer of the defendant authority. It is stamped by agents of both the
defendant and the bank.
The second document is called an “original receipt” (the copies made are not indicated). It has a serial number that has the prefix “BXC”. It shows the amount of tax paid,
the name of the tax payer and the BPAF number it relates to on the line “UCB P-I-S No.”. It is signed by a cashier of
the defendant authority and stamped. It is headed with the words “Uganda Revenue Authority” and is clearly a document
of the defendant. The receipt is given after payment is made under a BPAF and I am fortified in my analysis by a letter from the
defendant to the plaintiff in Exh. D.10, outlining the tax payment procedure.
The other document is a discharge notice (see P.10(a) as an example) in the form of a letter on the defendant’s letter head.
The general template of the notice is structured as follows
“This is to notify you that M/S…………has/have completed payment of taxes on the motor vehicle(s)/goods relating
to entry………which they requested and were authorized to pay in installments as per undertaking reference………and
subsequent release order dated……………”
It is signed off and stamped by the Principal Revenue Officer (Technical). It does not contain any amount of money paid but acts as
some form of release. This is therefore some form of secondary document evidencing payment of taxes. This too in any event is a document
of the defendant.
Both counsel seem to agree that in the case of the payment of taxes, the law is that the onus lies with the tax payer. What they disagree
on is what it takes to discharge that onus.
In the case of Bhabilia Habib (supra) Justice James Ogoola held that the burden of proof of over payment was successfully discharged by the plaintiff in that case
“…on a balance of probability by producing original copies of receipts for payment of tax in dispute…”
In that case the plaintiff produced the second category of documents (i.e. receipts). I have reviewed the above which have the prefix “D X C”.
I see no reason to depart from this weighting that the learned Judge articulated. I think it is too much to ask of a tax payer to
produce in one bundle a BPAF, receipt and even a clearing agent in order to establish his case. This is simply an ideal but not a
legal position. When taxes are paid the tax payer is given very many forms of documents as evidence of payment. I think that the
tax payer has to produce primarily the receipt as evidence of payment of the tax (other documents too can be used as secondary evidence
i.e. releases) which the defendant should then use to be able to trace other documents through its own records since these are all
its own documents (with cross references to other documents within them) in any case. The clearing agent is licenced and regulated
by the defendant authority and in my view the defendant authority therefore has direct access to the said clearing agent.
In this regard I follow the holding of the case Bhabilia Habib (supra) with approval.
I further agree with the authority that learned counsel for the plaintiff referred to me as to the shifting burden of proof when evidence
is led in court in the case of
J. K. Patel V Spear Motors Ltd SCCA No.4/1991 (not reported).
In that case it was made clear that the burden of proof rests before evidence is given on the party asserting the affirmative. It then however shifts and rests after evidence is given on the party against whom judgment would be given if no further evidence is adduced i.e. the defendant in this case. Actually the
evidence before this court shows that the defendant carried out investigations on the basis of the documents submitted by the plaintiff.
This shows that on the ground the evidential burden of proof had already shifted to the defendant (see Exh. D.10 and D.11) as far
back as 28th February 2000. Not satisfied with the results of the investigation the parties entered into a memorandum of understanding on the
29
.RTF of original document