Civil Reference No. 7 of 2004
Access Bank Limited (the applicant) was served with tax assessment and additional assessment notices for the year of income 2009. It objected, citing disallowed losses on borrowing costs, officer tax provisions, impairment losses on loans, insurance expenses, provisions for bad debts, and losses brought forward from 2008. The Commissioner General (the respondent) considered the objection and issued a notice of amended assessment. Dissatisfied, the applicant appealed to the Tax Revenue Appeals Board, which dismissed the appeal, upholding the respondent's disallowance of the claimed losses. The applicant then appealed to the Tax Revenue Appeals Tribunal, which likewise dismissed the appeal on 29.6.2015 (dated in the ruling as 29.6.2017). The applicant lodged a notice of appeal to the Court of Appeal and, pending that intended appeal, filed the present application under Rule 11(2)(b),(c),(d)(i)-(iii) of the Tanzania Court of Appeal Rules, 2009, seeking a stay of execution of the Tribunal's decree.
Whether the applicant satisfied the conditions under Rule 11(2)(d)(i)-(iii) of the Tanzania Court of Appeal Rules, 2009, entitling it to an order staying execution of the Tribunal's decree pending determination of the intended appeal.
The applicant argued three grounds for stay: (1) it would suffer substantial and irreparable financial loss if execution were not stayed; (2) the intended appeal had overwhelming chances of success, raising issues on the treatment of impairment provisions versus bad debts for a financial institution and the Tribunal's alleged misinterpretation of sections 18, 39(d) and 25(5)(a) and (b) of the Income Tax Act, 2004; and (3) since the disputed items were losses disallowed by the respondent, even an unfavourable outcome would leave the applicant in a non-tax-paying position for 2009, meaning no risk of revenue loss to the respondent. The respondent initially filed 'Arguments in reply' but did not file an affidavit in reply. At the hearing, the respondent's counsel abandoned the arguments in reply and stated he was not resisting the application, only urging that costs be in the cause. The applicant's counsel welcomed this position and agreed that costs be in the cause.
The Court of Appeal held that the power to grant a stay of execution under Rule 11(2) of the Rules (pre-2017 Amendment) is discretionary, contingent on satisfaction of the conditions in paragraph (d)(i)-(iii). Having considered the notice of motion, the supporting affidavit, and the applicant's written submissions, the Court found that all conditions were satisfied: the application was filed without unreasonable delay, the applicant demonstrated it would suffer substantial and irreparable financial loss absent a stay, and it undertook to provide security for performance of any decree ultimately binding on it. Given these findings and the respondent's non-opposition, the Court held that good cause was shown and granted the stay of execution, conditioned on the applicant depositing a bank guarantee equal to the decretal amount within fourteen days of the ruling. Costs were ordered to be in the cause.
The ruling reaffirms that the grant of a stay of execution under Rule 11(2) of the Tanzania Court of Appeal Rules, 2009 (pre-2017 Amendment) is a discretionary remedy contingent on the applicant satisfying the three cumulative conditions in paragraph (d)(i)-(iii): absence of unreasonable delay, demonstration of substantial and irreparable loss, and provision of security for due performance of the decree. It illustrates the Court's practical approach of assessing these statutory conditions on the record before it, and shows that a respondent's non-opposition to an application, while relevant, does not substitute for the Court's own satisfaction that the statutory conditions have been met before exercising its discretion to grant a stay.
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