Sapna Electronics Limited v Commissioner General Tanzania Revenue Authority

Facts:
TRA issued adjusted VAT assessments against Sapna Electronics for 2009–2016, based on discrepancies obtained from Vodacom Tanzania. TRA demanded supporting records. Sapna argued that records for 2009–2013 had already been destroyed after the statutory five-year retention period under section 25(2) of the VAT Act, 1997. The Board and Tribunal upheld the assessments, prompting the appeal.

Issues:

1. Whether TRA could demand records beyond the five-year retention period under section 25(2) of the VAT Act.

2. Whether the taxpayer still bore the burden of proving an assessment excessive or incorrect under section 18(2) of the Tax Revenue Appeals Act.

3. Whether section 43(1), giving TRA assessment powers, could be used independently of section 25(2).

Holding:
The Court partly allowed the appeal. It held that TRA could not demand records for 2009–2013, because Sapna was no longer legally obliged to retain them and TRA had not required their retention for a longer period in writing. Section 43 had to be read consistently with section 25; tax statutes must be interpreted as a whole, not piecemeal.

However, the protection did not extend to 2014–2016. Those records were still within the statutory retention period, and Sapna failed to prove that the assessments were excessive or erroneous. The Court therefore upheld the additional assessment for the relevant period, including TZS 154,944,942 for 2014.

Legal significance:
The case establishes that TRA's assessment and investigative powers are broad but not unlimited. TRA cannot use section 43 to circumvent the statutory record-retention regime in section 25(2). At the same time, a taxpayer remains responsible for disproving an assessment while it is still legally required to maintain the relevant records.

Key principle: A tax authority cannot demand what the law no longer requires a taxpayer to retain; but expiry of the retention period does not, by itself, invalidate assessments where the taxpayer was still under a duty to keep the records.