The High Court in Kampala has dismissed with costs an application by Nile Breweries Limited (NBL) seeking an interim order to stay the execution of the Tax Appeals Tribunal (TAT) orders against it until its appeal in the High Court is heard.
Earlier this week, the TAT slapped fines amounting to Shs50m on both NBL and two commercial banks Stanbic Bank and Standard Chartered Bank.
NBL was ordered to pay Shs20m and the banks Shs30m for failure to comply with the Tribunals’ directives.
Earlier, NBL filed an application in TAT objecting to URAs’ additional assessment of Local Excise Duty of Ugx Shs8.09Bn and Value Added Tax of Shs6.09Bn. The tribunal granted temporary injunction order restraining URA from collecting the taxes in dispute from NBL.
Read also: Nile Breweries Fined Alongside Standard Chartered and Stanbic Banks for Refusing to Pay Taxes
As a requirement for the TAT order, NBL was directed to pay 30% of the tax in dispute translating to Shs4.25Bn, which the company defiantly refused to pay.
This prompted the authority to issue third-party agency notices on NBLs bankers; Standard Chartered Bank (SCB) and Stanbic Bank (SB) requiring them to remit 30% of the tax on behalf of their client. However, the banks ignored the agency notices.
NBL ran to the High Court challenging the enforcement of the ruling against it by TAT on 6th May 2022 which held the brewery in contempt of the Tribunal.
On May 11, the High Court presided over by the Deputy Registrar Her Worship Juliet Harty Hatanga dismissed the NBLs application with costs to URA.
The High Court noted that by NBLs refusal to obey the TAT Order directing it to pay 30% of the tax in dispute, the company was still in contempt and had to first purge itself of the contemptuous act before the High Court can give its audience.
George Okello, the URA Assistant Commissioner of Litigation and URA’s lead counsel said that this ruling means the orders of the TAT must be fully complied with by NBL and the Bankers.
Okello added that his team will soon file their costs against NBL and the Banks will recover the costs awarded both by the Tribunal and the High Court which are estimated to be in Hundreds of Millions of shillings.
Okello represented URA with Counsel Tonny Kalungi. NBL on the other hand was represented by Meritas Advocates and Kampala Associated Advocates while Standard Chartered Bank and Stanbic bank were represented by Sebalu and Lule Advocates and AF Mpanga Advocates, respectively.
