Kampala – Uganda tax collecting body, Uganda Revenue Authority [URA] has won a milestone legal case against Rock Petroleum [U] Limited.
In 2009, the Rock Petroleum [U] Ltd sued URA in the High Court – the suit was to recover exercise duty collected in excess by the tax body.
Through their legal representation of Mwema and Mugerwa Company Advocates, the plaintiff won the case, with Court ordering URA to refund about shillings 48 billion and other dealers in petroleum products [about 56 in number].
Subsequently, the lawyers who represented Rock Petroleum [U] Ltd attempted to attach 16% of the refund amounts, in the hands of URA, before the companies/beneficiaries could receive.
This, however, was successfully challenged by the beneficiaries, up to the Supreme Court.
By then, (Muwema and Mugerwa Advocates) had already taken about shillings 4.7 billion from the URA bank account.
The Supreme Court ordered URA to still pay the companies, and recover from the lawyers.
Period in-between, the law firm went back to the High Court to tax the costs of a successful representation of the excise duty refund case against URA. High Court awarded them shillings 5.8 billion in costs (instruction fees).
The defendant [URA] appealed and the Court of Appeal reduced it to shillings 3 million.
However, in a unanimous judgment given on 6, November 2018, and the archetype in Uganda, the Supreme Court dismissed the appeal and upheld the Court of Appeal decision.
In addition, the Court of Appeal ordered that the amount that had earlier been taken by the advocates (16%) off the URA bank accounts (shillings 4.7 billion) be refunded.
URA victory statement
Ian Rumanyika – URA manager for public and corporate affairs says the taxpayers are now saved from paying shillings 5.8 billion in costs to the private advocates.
“URA is entitled to a refund of approximately Uganda shillings 4.7 billion illegally taken by the said advocates, purported as 16% of the excise duty refund due to the beneficiaries, but which the lawyers had attached as professional legal fees due from the beneficiaries (Supreme Court had earlier held that those beneficiaries were not liable to pay the advocates),” he added.
According to URA, the case will foster discipline among legal practitioners who wish to use illegal means to earn excessive professional fees, adding: “The case is a big contribution by the URA team to the growth and development of jurisprudence in the country and the region at large.”
The tax body applauded the formidable URA legal team and the entire leadership whose immense support earned URA this historical victory.