The dispute arose from Consolidated Tax Appeal Nos. 117, 328, 329, 330, 331, 332, 333 and 334 of 2020, in which the Tax Revenue Appeals Board delivered judgment in favour of Lea Associates South Asia Pvt on 11 February 2022.
The Board held that the appellant was entitled to certain tax exemptions under section 10(3)(b)(i) of the Income Tax Act, Cap. 332, in relation to the Iringa–Dodoma Fufu Road Project.
The Commissioner General of TRA, dissatisfied with the decision, lodged a notice of appeal on 18 February 2022. He subsequently received the relevant documents on 8 June 2022 and was required, under section 16(4) of the Tax Revenue Appeals Act, Cap. 408, to file a statement of appeal within 30 days.
However, TRA failed to file the statement of appeal within the prescribed period and waited approximately 30 months before applying for an extension of time on 10 December 2024.
TRA did not provide a satisfactory explanation for the delay. Instead, it argued that the Board's decision was illegal because the claimed tax exemptions had not been granted by the Minister responsible for Finance through an order published in the Government Gazette, as required under section 10 of the Income Tax Act.
The Tribunal accepted the argument and granted TRA 14 days to file its statement of appeal.
Aggrieved by this decision, Lea Associates appealed to the Court of Appeal.
The principal issue was:
Whether the Tribunal properly exercised its discretion in granting an extension of time to TRA despite its failure to account for an approximately 30-month delay.
This raised a further legal question:
Whether an allegation of illegality in the decision sought to be challenged constitutes sufficient reason for extending time, notwithstanding an applicant's failure to explain the delay.
The Court of Appeal dismissed the appeal with costs, upholding the Tribunal's decision to grant TRA an extension of time.
The Court reaffirmed that an important legal question concerning the illegality of a decision may constitute sufficient reason for granting an extension of time, even where the applicant has failed to account for the period of delay.
In reaching this conclusion, the Court examined the development of the illegality principle through several previous decisions:
(a) Principal Secretary, Ministry of Defence and National Service v. Devram Valambhia [1992] T.L.R. 185
Established that an important question concerning the legality of a decision may constitute sufficient reason for extending time, since an illegal decision should not be permitted to stand merely because of procedural delay.
(b) Lyamuya Construction Co. Ltd v. Board of Registered Trustees of Young Women's Christian Association of Tanzania [2011] TZCA 4
Clarified that the alleged illegality must be both significant and apparent on the face of the record. Not every ordinary legal argument automatically justifies an extension of time.
(c) Charles Richard Kombe v. Kinondoni Municipal Council [2023] TZCA 137
Explained illegality as an act not authorised by law and identified serious defects such as lack of jurisdiction, denial of the right to be heard and proceedings being time-barred.
(d) Nathanael Mwakipiti Kigwila v. Magreth Andulile Bukuku [2025] TZCA 849
Emphasised that the alleged illegality must demonstrate a grievous and substantial breach of law or procedure affecting the validity and outcome of the decision.
Applying these principles, the Court found that the Board's decision was arguably illegal because it recognised tax exemptions despite the absence of a ministerial order published in the Gazette.
The Court therefore considered the alleged illegality sufficiently significant to justify an extension of time.
Importantly, the Court acknowledged TRA's inexplicable failure to file its statement of appeal within the prescribed period but held that the importance of the legal question took precedence over its procedural shortcomings.
1. Reinforcement of the illegality principle in applications for extension of time
The decision reinforces the established principle that an apparent and substantial illegality in a decision may independently constitute sufficient cause for extending time, even where the applicant has failed to account for the delay.
2. Clarification that delay is not always decisive
The judgment demonstrates that the length of delay, even where it is substantial and unexplained, does not automatically defeat an application for extension of time where a significant question of illegality is apparent on the record.
3. Importance of statutory compliance in granting tax exemptions
The decision underscores the statutory requirement under section 10 of the Income Tax Act that tax exemptions must be granted by the Minister responsible for Finance through an order published in the Gazette. An administrative or judicial determination cannot simply substitute for the statutory procedure required to establish an exemption.
4. Protection of the rule of law over procedural technicalities
The Court emphasised that the judicial system should not allow a potentially illegal decision to remain operative merely because a party failed to comply with procedural timelines. The principle serves to protect the legality of judicial and quasi-judicial decisions.
5. The illegality exception is not unlimited
The judgment is equally important because it reiterates that not every allegation of legal error qualifies as illegality. The alleged breach must be substantial, significant and apparent on the face of the record, rather than requiring prolonged arguments to establish.
Key legal principle
An apparent and substantial illegality in a challenged decision may constitute sufficient reason for granting an extension of time, notwithstanding an applicant's failure to account for an inordinate delay.
The Court prioritised the correction of a potentially illegal decision over TRA's unexplained procedural default.
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