Civil Reference No. 7 of 2004
The appellant, the Board of Trustees of the National Social Security Fund (NSSF), purchased shares from M/s Quality Group Limited for shs. 47,500,000,000/=. When NSSF submitted the agreement to the Commissioner General of the Tanzania Revenue Authority (TRA) for capital gains tax assessment, TRA instead demanded stamp duty of shs. 2,375,000,000/= and imposed a penalty of shs. 2,375,000,000/= (later corrected in the text to a stated ten-fold, i.e. 1000%, of the principal sum) for underpaid stamp duty. NSSF paid the principal sum but disputed the penalty, prompting negotiations that led TRA to reduce the penalty to 500% of the principal. Still dissatisfied, NSSF invoked section 68 of the Stamp Duty Act, Cap 189 (SDA), requesting the Commissioner to refer the matter as a 'case stated' to the Tax Revenue Appeals Board (the Board), undertaking to pay the prescribed fees. TRA refused, asserting the assessment was correct and that referral was not warranted. NSSF appealed this refusal to the Board, which overruled TRA's preliminary objection (that the dispute was criminal in nature and outside the Board's jurisdiction) and ordered TRA to state a case as requested. TRA then appealed to the Tax Revenue Appeals Tribunal (the Tribunal) on three grounds concerning jurisdiction, statutory interpretation of section 68 SDA, and alleged consideration of extraneous matters. At the Tribunal, the Chairman (Judge Shangwa) sat with two members. The two members gave concurring opinions dismissing TRA's appeal in its entirety. The Chairman, however, dismissed the appeal only on the first ground but allowed it on the second and third grounds—effectively differing from the unanimous view of the two members—without recording their opinions or his reasons for disagreeing, as required by law. NSSF then appealed to the Court of Appeal.
(1) Whether the Tribunal Chairman's judgment was vitiated by his failure, in disagreeing with the unanimous opinions of the two members who sat with him, to record their opinions and his reasons for disagreement, contrary to section 20 of the Tax Revenue Appeals Act, Chapter 408 (the Act). (2) Whether the principle requiring reasoned disagreement with assessors/members in criminal trials (as in Segesela and Bazamiye) applies analogously to Tribunal proceedings under the Act. (3) Consequentially, whether the Tribunal's judgment should be nullified and the appeal reheard.
The appellant, through Mr. Maro, argued that the Chairman's judgment directly conflicted with the members' opinions on the second and third grounds of appeal before the Tribunal, yet the Chairman failed to record the members' dissenting opinions or state reasons for his disagreement, in breach of the mandatory requirement in section 20 of the Act. Counsel drew an analogy to the criminal law principle in Abdallah Bazamiye and Others v Republic [1990] TLR 42, which relied on the Segesela principle requiring a trial judge who disagrees with unanimous assessor opinions to give reasons, so that an appellate court can assess whether the judge was entitled to depart from those views. Mr. Maro contended this principle, though developed in criminal trials, applied equally to the Tribunal's composition and decision-making process, and that the non-compliance vitiated the Tribunal's decision, warranting nullification and a fresh hearing. The respondent, through Mr. Haule, initially resisted but after brief argument conceded that the non-compliance vitiated the Tribunal's judgment and agreed that the appeal should be heard afresh.
The Court of Appeal held that it was beyond question that the Tribunal Chairman failed to assign reasons for his disagreement with the unanimous dissenting opinions of the two members who sat with him, in clear infringement of section 20 of the Tax Revenue Appeals Act, which imperatively requires the Chairman, where he disagrees with a member's opinion, to record that member's opinion and his reasons for disagreement. The Court agreed with counsel that this omission was analogous to a criminal trial judge's failure to give reasons for disagreeing with unanimous assessors' views (as recognized in Segesela and applied in Bazamiye), and that such non-direction goes to the root of the entire judgment. Finding merit in the fourth ground of appeal, the Court allowed the appeal with costs, invoked its revisional jurisdiction under section 4(2) of the Appellate Jurisdiction Act to nullify and set aside the Tribunal's judgment, and ordered that the appeal be heard afresh before a differently constituted Tribunal.
The judgment reinforces the mandatory nature of section 20 of the Tax Revenue Appeals Act, requiring a Tribunal Chairman who disagrees with the unanimous opinion of sitting members to record their opinion and articulate reasons for the disagreement. It extends, by analogy, the criminal law jurisprudence on judges' obligations to give reasons for departing from unanimous assessors' views (the Segesela principle as applied in Bazamiye) to the civil/tax tribunal context, treating non-compliance as a fundamental procedural defect that vitiates the entire decision rather than a mere irregularity. The case illustrates that appellate courts may invoke revisional jurisdiction to nullify decisions suffering from such defects and order a rehearing, underscoring the importance of transparency and accountability in multi-member adjudicative bodies where dissenting views exist.
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