Kampala — The High Court has delivered a scathing judgment against the Tax Appeals Tribunal for what it termed as a blatant disregard of procedural law in the handling of a temporary injunction application filed by Kalungi Estates Ltd.
In a ruling issued on May 13, 2025, Hon. Lady Justice Patricia Mutesi overturned the Tribunal’s decision and reprimanded it for pre-judging the main dispute before trial.
The case stemmed from a March 4, 2025, decision in which the Tribunal, presided over by Chairperson Crystal Kabajwara and members Stella Nyapendi and Rosemary Najjemba, granted Kalungi Estates Ltd a temporary injunction to stop the Uganda Revenue Authority (URA) from auctioning its impounded equipment.
However, the same ruling went further to order Kalungi to pay the full tax amount under contest, UGX 1,101,929,563, effectively deciding the merits of the case prematurely.
Kalungi had sought only interim relief to halt enforcement while challenging what it deemed an inflated and unlawful assessment. Yet, instead of preserving the status quo, as is customary in injunctive proceedings, the Tribunal issued directives that undermined the protective purpose of the application.
Justice Mutesi faulted the Tribunal’s conduct, stating: “It is trite law that an injunction application is intended to preserve, and not to upset, the status quo of the subject matter… It is unusual for a court or tribunal to make orders on how the status quo can be altered before the main case is decided.”
In her analysis, the Judge found that the Tribunal had overstepped its jurisdiction by delving into the substantive issues of the dispute, rather than confining itself to the narrow question of whether temporary injunctive relief was warranted.
Among the key grounds for the High Court’s decision were that the Tribunal had:
- Ruled on the merits of the main application during an interlocutory stage;
- Wrongly affirmed URA’s audit findings without a trial;
- Refused to release the applicant’s property despite the dispute being unresolved;
- Confused tax deposit figures, UGX 440 million and UGX 480 million, then demanded full payment in contravention of Section 15(1) of the Tax Appeals Tribunals Act, which caps pre-hearing deposits at 30%.
Justice Mutesi described the Tribunal’s conduct as “harsh, punitive, and arbitrary.” The most striking criticism came when she compared the ruling to a law student’s exam error: “If this ruling came from a student, you’d mark it with red ink. But this came from professionals,” she noted.
The High Court’s final orders:
- Set aside the Tribunal’s unlawful directives and prejudicial comments;
- Maintained the injunction in full without preconditions;
- Directed the Tribunal to properly reconsider Kalungi’s preliminary objection in line with the law;
- Awarded 75% of the legal costs to Kalungi Estates Ltd.
The ruling has been hailed by legal practitioners as a reaffirmation of procedural discipline and the proper limits of quasi-judicial authority.
One Kampala-based tax lawyer noted the case would likely become a reference point in instructing tribunals on the proper handling of interlocutory applications.
The Tribunal has not issued a public response to the judgment.
