Q&A – 6 January 2014
Evidence on appeal
We lost our case at the High Court in Dar es Salaam and have filed an appeal to the Court of Appeal. We have also changed attorneys in the case and realized that some key piece of evidence was not adduced during the trial. Can we bring this new piece of evidence before the Court of Appeal? What kind of a decision can the Court of Appeal deliver?
TO, Dar
Rule 36 of the Court of Appeal Rules states that (1) On any appeal from a decision of the High Court or Tribunal acting in the exercise of its original jurisdiction, the Court may—
(a) re-appraise the evidence and draw inferences of fact; and (b) in its discretion, for sufficient reason, take additional evidence or direct that additional evidence be taken by the trial court or by a commissioner. (2) When additional evidence is taken by the Court, it may be oral or by affidavit and the Court may allow the cross examination of any deponent.
We are unsure what you mean by what kind of decision the Court of Appeal may give but rule 38 states that the Court may, in dealing with any appeal so far as its jurisdiction permits, confirm, reverse or vary the decision of the High Court or Tribunal or remit the proceedings to the High Court or Tribunal with such directions as may be appropriate, or to order a new trial, and to make any necessary incidental or consequential orders including orders as to costs.
Hence your Judgment from the High Court may be confirmed, reversed, varied or remitted back to the High Court with appropriate directions. Your lawyers can guide you further.
Reducing share capital
Our company was involved in some mining contracts which have now come to an end. We intend to reduce our share capital as we are scaling down our operations. Does Tanzanian law allow this and how do we proceed?
GB, Dar
The Companies Act has a special section for this. Section 69 provides that (I) A company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles and as provided herein, by special resolution reduce its share capital in any way, and in particular, may – extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or (a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or (b) either with or without extinguishing or reducing liability on any of its shares, cancel any paid up share capital which is lost or unrepresented by available assets; or (c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid up share capital which is in excess of the requirements of the company, and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly. (2) The notice given of the intention to propose the special resolution to reduce the company’s share capital shall be accompanied by a directors’ certificate of solvency given in accordance with section 70 and, where appropriate, the auditors’ report thereon prepared in accordance with section 70. (3) Subject to section 71, a special resolution passed reducing the share capital of a company shall not take effect until after the resolution has been filed with the registrar and the resolution shall not, in any event, be filed with the Registrar until thirty five days from the date that it was passed. (4) A special resolution reducing the share capital of a company shall be advertised in the Gazette and, in the case of a public company, one national newspaper, in each case within five working days of the resolution having been passed. If the company
fails to comply with this subsection, the directors shall be liable to a fine.
Please note that the advertisement for such reduction of share capital is mandatory. Your lawyers can guide you further.
VAT evasion and search
Can TRA officers demand to see the quantity and quality of goods in my godown. They seem to think I have evaded payment of VAT? Is that not an infringement of my rights to doing business in Tanzania?
WJ, Mwanza
We are unsure how your rights to do business would be infringed by TRA demanding to verify the quantity and quality of your goods. The VAT Act has clearly provided for this in section 39 in that (1) For the purpose of exercising any power conferred on him by or under this Act, an authorised officer may, at any reasonable time, enter any premises which he has reason to believe are used for or in connection with the carrying on of a business, including any premises used only for the storage of goods or documents, and shall have full and free access in it to open any packaging, take stock of any goods and do all such things as are reasonably necessary for the performance of his duties.
Section 36 of the VAT Act also allows TRA to take samples and states (1) Where an authorised officer has reason to believe that it is necessary to do so for the protection of the revenue, he may take, from goods in the possession of any person who supplies goods or services such samples as may be reasonably be necessary to determine how the goods or the materials from which they are made ought to be or to have been dealt with for taxation purposes.
If such samples are taken, TRA must issue a receipt that such goods have been taken and if the goods are not returned within a reasonable time, TRA is liable to compensate you.