Civil Reference No. 7 of 2004
The respondent, JSC Atomredmetzolo (ARMZ), a Russian company in the uranium mining industry, purchased all shares of Mantra Resources Limited (an Australian company owning the Mkuju River Uranium project in Tanzania) via a Scheme Implementation Agreement in December 2010. It then transferred those shares to Uranium One Inc. (a Canadian company in which it held a majority stake) under a put/call option agreement at cost. The Commissioner General of Tanzania Revenue Authority (CGTRA) viewed this as a taxable realization of interest in a domestic asset (the Mkuju River project) and, by letter dated 30/11/2011, notified the respondent of tax liability of USD 196,000,000 on investment income and USD 9,800,000 in stamp duty. The respondent lodged appeals to the Tax Revenue Appeals Board (the Board) under section 14(2) of the Tax Revenue Appeals Act (TRAA), which ruled in its favour; the CGTRA's subsequent appeals to the Tax Revenue Appeals Tribunal (the Tribunal) also failed. The CGTRA then appealed to the Court of Appeal (consolidated as Civil Appeals Nos. 78 and 79 of 2018), where the respondent raised preliminary objections challenging the competence of the appeals on procedural grounds, and the Court also required submissions on whether the respondent's original recourse to the Board was proper.
(1) Whether the consolidated appeals were competent, given alleged procedural defects: failure to have the record of appeal endorsed by the Registrar (Rule 18), irregular filing of omitted additional documents in the Mwanza Sub-Registry (Rule 16), delayed service of those documents (Rules 97/99), and a decree inconsistent with the judgment in Civil Appeal No. 79 of 2018 (Rule 96(1)(h)). (2) Whether, regardless of the competence of the appeals, the Court could and should raise suo motu and invoke its revisional jurisdiction under section 4(3) of the Appellate Jurisdiction Act (AJA) to examine the legality of the proceedings before the Board and Tribunal. (3) Whether the respondent's recourse to the Board under section 14(2) of the TRAA to challenge the CGTRA's notice of tax liability was procedurally proper, given the requirements of sections 7A and 12 of the TRAA (for income tax) and section 43 of the Stamp Duty Act (for stamp duty).
The respondent's counsel argued that the appeals were incompetent because: the record of appeal was not endorsed by the Registrar as required by Rule 18(1); the omitted additional documents were filed in the Mwanza Sub-Registry without proper Registrar permission, contrary to Rule 16, and could not be re-authorized under Rule 97(8); those documents were served nearly ten months late, violating Rules 97(1)/99(2); and the decree in Appeal No. 79 of 2018 did not match the judgment, rendering it defective under Rule 96(1)(h). They urged the Court to strike out the appeals and opposed the Court raising the Board's jurisdiction suo motu, arguing the record was no longer before the Tribunal/High Court and that the jurisdictional issue was already a ground of appeal not properly before the Court, citing Abdon Edward Rwegasira. They maintained the respondent's appeal to the Board was properly founded under section 14(2) TRAA and section 6 of the TRA Act. The appellant's counsel contended the procedural objections were baseless: the record bore the Court's stamp and date; Registrar endorsement of every document is not mandatory; proper permission was obtained before filing additional documents in Mwanza; delayed service, though conceded, caused no prejudice; and the decree was consistent with the judgment. On the jurisdictional question, appellant's counsel conceded the CGTRA's letter was a notice of tax liability but argued the respondent's use of an 'appeal' under section 14(2) was improper because section 7A TRAA bars the Board from entertaining appeals arising from a tax assessment unless the objection procedure under section 12 TRAA (lodging an objection with the CGTRA first) is followed; thus the Board acted without jurisdiction, and the Court should invoke revisional powers to nullify the proceedings below.
The Court held that the appeals were substantially incompetent: the record of appeal lacked the mandatory Registrar endorsement required by Rule 18, rendering it defective (though the Registrar also bore some responsibility); the objection to filing of additional documents in Mwanza could not be resolved as a pure point of law since it depended on facts not assumed true (citing Mukisa Biscuit); the delayed service of additional documents, while a breach of the Rules, caused no prejudice and was overlooked; and the decree in Appeal No. 78 (mislabelled as 79 in argument) varied from the judgment, making it defective and the appeal incompetent under Rule 96(1)(h). Despite finding incompetence, the Court declined to strike out the appeals so as to remain seized of the record and invoke its revisional jurisdiction under section 4(3) of the AJA, following precedent (Chama cha Walimu Tanzania v Attorney General; DPP v Elizabeth Michael Kimemeta) that where the record reveals a patent illegality, the Court will not mechanically strike out but will use the opportunity to correct the illegality. On the substantive jurisdictional issue, the Court found that the CGTRA's letter of 30/11/2011 was a 'notice of existence of liability' to pay income tax (an assessment under section 96(1) ITA 2004) and stamp duty. For income tax, section 14(2) TRAA permits only a 'reference' (not an 'appeal') of an objected notice to the Board, and in any event section 7A TRAA bars the Board from entertaining any appeal arising from a tax assessment unless the objection procedure under section 12 TRAA (first lodging an objection with the CGTRA) is complied with. For stamp duty, the Stamp Duty Act requires initial adjudication by a Stamp Duty Officer, appeal to the Commissioner, and only thereafter a reference to the Board. Since the respondent bypassed these mandatory procedures and lodged appeals directly to the Board, the Board lacked jurisdiction and its proceedings, along with the Tribunal's subsequent proceedings, were a nullity. The Court invoked its revisional jurisdiction under section 4(3) of the AJA to nullify the proceedings and judgments of both the Board and the Tribunal, and directed the respondent to comply with the proper statutory procedure (lodging an objection with the CGTRA) if it wished to pursue its tax dispute. No order as to costs was made.
The ruling reinforces that jurisdiction is a threshold issue that can be raised at any stage, including on appeal, and that courts and tribunals must be certain of their jurisdictional competence before adjudicating a matter on its merits; proceedings conducted without jurisdiction are a nullity, as is any subsequent appellate judgment arising from them. It clarifies the tax dispute resolution hierarchy under the TRAA and Stamp Duty Act: a taxpayer aggrieved by a notice of tax assessment must first lodge an objection with the Commissioner-General under section 12 TRAA before seeking recourse to the Tax Revenue Appeals Board, and section 7A TRAA bars the Board from entertaining appeals from tax assessments absent such compliance; similarly, stamp duty disputes must proceed through the Stamp Duty Officer and Commissioner before a reference lies to the Board. The decision also affirms the Court of Appeal's practice, established in prior cases (Chama cha Walimu Tanzania, DPP v Kimemeta), of declining to strike out even a technically incompetent appeal where doing so would perpetuate a patent illegality in the lower proceedings, instead invoking suo motu revisional jurisdiction under section 4(3) of the Appellate Jurisdiction Act to correct such illegalities and remain seized of the record.
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