High Court of Uganda ruled that the Commissioner General of Uganda Revenue Authority legally exercised discretionary powers when he issued a General Notice requiring all VAT registered taxpayers to start issuing e-invoices or e-receipts or employ electronic devices connected to the URA centralized invoicing or receipting systems .
This decision comes after Capital shoppers Ltd, Quality supermarket,Kenjoy Supermarket, Jazz Supermarket and Mega Standard Supermarket challenged the said General notice for being illegal and ambiguous.
The Honorable Judge ruled in favor of URA and dismissed the Application for the following reasons;
1.The procedure adopted by the applicant’s counsel for Court to quash the Tax Procedures Code (E-Invoicing and E-Receipting) Regulations, 2020 for being enacted without stakeholder participation is very irregular and this court would not grant such leave to make an amendment during submissions.
2.The applicants’ case is within the timeline of 3 months for judicial review.
3.The applicants through their lawyers-Ortus Advocates made an “Objection to Selective Implementation as pilot Candidates for the Pilot exercise in the Implementation of the Electronic Fiscal Receipting & Invoicing Solutions” and the same was communicated to URA on 25th May 2020.
4.The applicants submitted to this jurisdiction when they lodged an objection and to this extent they ought to have conclusively and exhaustively waited to explore the remedies available. The applicants indeed had an alternative remedy of resolving their dispute arising out of the decision of the respondent to selectively try to implement the EFRIS on them only.
5.The applicants were wrong to pursue the two remedies concurrently and without trying to exhaust the one pursued first. The action of the applicants of pursuing both available remedies is an abuse of court process and should be discouraged.
6.To the extent that this application also intended to challenge General Notice No. 595 of 2020 gazetting all VAT registered tax payers to issue e- receipts and e-invoices as being inconsistent with section 73A of the Tax Procedures Code (Amendment) Act, 2018 there is a valid cause of action which is not directly related to exhaustion of available remedies since there is no such decision that has been made by the Commissioner General.
7.The orders sought by the applicants are overtaken by events and therefore moot since no good would be achieved if the orders are granted. The applicants’ main grievance was about being selectively chosen as pilot candidates for the pilot exercise for the implementation of the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS). The said pilot scheme was abandoned by the respondent and the same has been overtaken by gazetting the law which now applies to all VAT registered taxpayers.
8.The function of a Court of law is to decide an actual case, and to right actual wrongs, and not to exercise the mind by indulging in unrewarding academic casuistry or in pursuing the useless aim of jousting with windmills. Further, the court should not grant a relief or pass order or direction which is incapable of implementation.
9.The Tax Procedures Code (E-Invoicing and E-Receipting) Regulations 2020 were enacted by the Minister of Finance, Planning and Economic Development and passed by the Parliament of Uganda which is vested with powers to make laws. The propriety of the said Regulations cannot be brought into question without the author.
10.URA did not make the said regulations and her role under the Uganda Revenue Authority Act is to administer and give effect to tax laws. Therefore, the Attorney General was the proper party to represent the Minister and not the implementing agency.
11.Any attempt by this court to entertain this application without the proper party-Attorney General would amount to condemning them unheard which is against the cardinal principal of our constitutional order.
12.The respondent Commissioner General properly exercised the power given by Parliament and the applicants’ argument of ambiguity of parent law (section 73A(1) and 73A(2) is completely flawed and a misapplication and appreciation of the Tax Procedure Code (Amendment) Act, 2018.
13.The Commissioner General is given power to promote the policy and purposes of the Act. This was supposed to be made specifying the taxpayers eligible to issuance of e-invoices and e-receipts. The nature of powers given to the commissioner is subjective and is strictly within the purview of the respondent.
14.The gazetting all VAT registered taxpayers to be liable to E-Invoicing and E-Receipting is not illegal or irrational as contended by the applicants. The same is within the ‘four corners’ of the Tax Procedure Code Act.
15.The courts should be mindful and quite liberal in upholding delegation of power to decide “matters of detail” concerning the working of the tax law in question.
16.The Commissioner has been delegated power to bring into effect the e-invoicing and e-receipting and is best suited to make rational decisions to achieve the intended purpose of the legislation of avoiding self-assessment system/model which some fraudulent taxpayers abuse. Hence, in the very nature of things these details have got to be left to the Commissioner.
