Uganda Revenue Authority v Iliso Consulting (PTY) Limited & Another (Miscellaneous Application 34 of 2023) [2023] UGTAT 30 (27 April 2023)

THE REPUBLIC OF UGANDA IN THE TAX APPEALS TRIBUNAL OF UGANDA AT KAMPALA MISC. APPLICATION NO. 34 OF 2023 (ARISING FROM APPLICATION NO. 244 OF 2022)

UGANDA REVENUE AUTHORITY ============================APPLICANT

VERSUS

1. ILISO CONSULTING (PTY) LTD

ILISO SOUTH AFRICA ================ =======RESPONDENT

CORAM: MR. SIRAJ ALI, MR. GEORGE MUGERWA, MS. CHRISTINE KATWE

RULING

This ruling is in respect of an application seeking to join the second respondent as a party to the main application on the ground that its presence is necessary for the effective and complete settlement of the questions involved in the main application.

The brief facts of this application are that: The applicant carried out an audit into the affairs of the first respondent. As a result, it issued an Income tax assessment for Shs. 435,398,396 for the period 1^st January 2016 to 31^st December 2016. The basis of the assessment were variances between income tax sales and third-party withholding amounts. The first respondent objected to the assessment on the ground that it had been issued against the wrong party instead of the second respondent who was the right taxpayer. The applicant disallowed the objection, whereupon the respondent filed the main application for a review of the applicant's decision. Before the start of the hearing the applicant filed this application to have the second respondent joined as a party to these proceedings.

The applicant relied on the decision of the tribunal in Umeme & UEDCL v Uganda *Revenue Authority* Application 40 of 2018, where the tribunal held that the UEDCL was entitled to be heard before any decision affecting it is made. Applying the reasoning in the

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above case the applicant submitted that the right to a fair hearing is non-derogable under Article 28 of the Constitution and overrides procedural aspects of assessments and objection decisions as a pre-requisite for one to appear before the tribunal. The applicant submitted further that it had been amply demonstrated in the supplementary affidavit deponed by Donald Bakashaba that the first respondent is incorporated in Uganda with different shareholding from the second respondent and further that the second respondent is incorporated in South Africa and registered in Uganda with an address in Uganda.

The applicant submitted that given the fact that the tax liability is denied by the first respondent and yet the second respondent is a distinct and separate legal entity capable of defending itself in courts of law, it would serve the interests of justice to get to the bottom of the dispute and determine the right party to bear the tax burden. The applicant submitted further that joining the second respondent to these proceedings was also necessary to ensure that the dispute was conclusively resolved so as to avoid a multiplicity of suits in respect of the same dispute.

The first respondent has not filed any submissions, indeed when the application came up before the tribunal on 30^th March 2023, the first respondent indicated that it had no objections to the application.

Having read the affidavits in support of the application and the written submissions of the applicant, the following is the ruling of the tribunal.

S.22 (3) of the Tax Appeals Tribunal Act states that the proceedings of a tribunal shall be conducted in accordance with such rules of practice and procedure as the tribunal may specify, and the tribunal may direct the application of the rules of practice and procedure of any court subject to such modifications as the tribunal may direct.

Rule 30 of the Tax Appeals Tribunals (Procedure) Rules states that in any matter relating to the proceedings of a tribunal for which these Rules do not provide, the rules of practice

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and procedure of the High Court shall apply, subject to such modifications as the tribunal may direct.

Neither the Tax Appeals Tribunals Act nor the Tax Appeals Tribunals (Procedure) Rules provide for the adding of parties to an application. However as set out under S. 22(3) of the Tax Appeals Tribunals Act and Rule 30 of the Tax Appeals Tribunals (Procedure) Rules the Civil Procedure Rules can be applied in these circumstances. Order 1 Rule 10(2) of the Civil Procedure Rules provide for the addition and removal of parties. It states as follows:

"The court may at any stage of the proceedings either upon or without the application of either party, and on such terms as may appear to the court to be just, order the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the suit, be added."

The above provision was considered by the Supreme Court of Uganda in Departed Asians Property Custodian Board v Jaffer Brothers Ltd Civil Appeal No. 9 of 1998. Their Lordships stated as follows:

"This rule is similar to the English R. S. C Order 16 r.11 under which the case of Amon v. Raphael Tuck & Sons Ltd (1956) 1 ALLER p. 273, was considered and decided and in which it was said that a party may be joined in a suit, not because there is a cause of action against it, but because that party's presence is necessary in order to enable the court effectually and completely adjudicate upon and settle all the questions involved in the cause or matter."

Applying the above provisions of the law and the above decision to the facts of our case we find that it is necessary for the second respondent to be joined to these proceedings so as to enable the tribunal to effectually and completely adjudicate upon and settle all questions involved in this application.

The second respondent is accordingly added to the main application as the second respondent. The first applicant shall amend its application to include the second respondent. The second respondent will be served with the first applicant's pleadings and

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will file its own pleadings within 15 days of the receipt by it of the first applicant's pleadings. Both pleadings will be served on the respondent who will file a response within 15 days from the date of the receipt by it of the said pleadings.

It is so ordered.

Dated at Kampala this

day of

$27m$

APh

MR. SIRAJ ALI CHAIRMAN

MR. GEORGE W. MUGERWA MEMBER

Christiekartino

MS. CHRISTINE KATWE MEMBER

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