THE Court of Appeal yesterday pinned down lawyers for the parties over legality of proceedings in the dispute for payments of 205.8 million US dollars (over 400bn/-) as income tax and stamp duty involving Russian Uranium Mining Company, JSC Atomredmetzoloto (ARMZ)
A panel comprising Chief Justice Ibrahim
Juma and Justices Kipenka Mussa and Stella Mugasha grilled Advocate
Fayaz Bhojani, for ARMZ and Counsel Salvatory Switi, for the Tanzania
Revenue Authority (TRA) Commissioner General on a number of issues,
notably on the competence of proceedings.
The panel had raised suo moto (own
motion) the issue of whether the initial appeals for capital gains tax
of 196 million US dollars and stamp duty of 9.8 million US dollars were
properly lodged by ARMZ at the Tax Revenue Appeals Board, before being
taken to the Tax Revenue Appeals Tribunal for determination.
It was Mr. Bhojani, who became the first
to get it hot when the justices put him to task. He tried to explain
that when the appeal was lodged in December 2011 before the Board, the
law allowed notices issued by TRA at the time to be directly appealed
against under section 14 of the Tax Revenue Appeals Act.
“The law has since been changed via the
Tax Administration Act, and had the notices by TRA demanding these taxes
been raised today, the appellant (ARMZ) would have to go back to the
Commissioner General under objection proceedings,” he submitted.
Mr. Bhojan went an extra mile to
challenge the appeal lodged by TRA in the capital gain tax against the
judgment issued by the Tribunal by Vice Chairman Hussein Mataka and two
other members, who had ruled in favour of the foreign company regarding
the matter.
He told the panel that the appeal was
incompetent because it contained incomplete records as it was not
attached with crucial documents as per Rule 96 of the Court of Appeal
Rules that were annexed to the submissions during hearing of the matter
before the Tribunal.
The advocate further raised a counter
preliminary issue in the stamp duty appeal that the court was not vested
with jurisdiction to entertain the appeal as the TRA had not timely
taken steps to lodge its records and memorandum of appeal.
In the hearing that lasted for two
hours, Mr. Switi responded to the panel’s concern that what ARMZ claimed
were notices of existence of liability were actually not notices, and
that the foreign company had rushed to the Board prematurely, thus, the
lower court’s proceedings were nullity.
As far as the competence of the appeals
are concerned, Mr. Switi told the court that there was no delay in the
submission of the proceedings, thus, the court was properly seized with
the appeal and that none of the documents that were not annexed in the
proceeding have any evidential value.
The justices reserved their ruling on the matter on a date to be announced later after hearing the parties.
It is alleged that sometimes towards the
end of 2010, ARMZ entered into a scheme arrangement to purchase shares
from shareholders of a company known as Mantra Resources Limited,
trading in the Australian Stock Exchange. Mantra Resources Limited has
shares in Mantra Tanzania Limited.
Later on in March 2012, ARMZ sold and
transferred 13.19 per cent of the shares in Mantra Resources Limited to
Uranium One, which is a company incorporated in Canada.
Following these transactions, TRA raised and issued the ARMZ with an income tax liability claiming 196 million US dollars.
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