By Ben Musanje
The High Court of Uganda’s Commercial Division has clarified the legal principles governing applications for extensions of time in tax disputes, ruling that taxpayers who blame their lawyers for missed deadlines must provide credible evidence to support their claims.
In a judgment delivered by Justice Susan Odongo in Civil Appeal No. 80 of 2025, involving Chefette Catering Ltd and the Uganda Revenue Authority (URA), the court examined whether the Tax Appeals Tribunal had correctly dismissed the company’s application to extend time for challenging a tax decision.
The dispute arose after URA upheld Chefette Catering Ltd’s income tax liability of Shs 314.2 million and Value Added Tax (VAT) liability of Shs 98 million, based on alleged undeclared sales.
The company sought further administrative review through URA’s Alternative Dispute Resolution Division. After receiving the objection decision on March 21, 2024, it said it instructed its former lawyers to file an application before the Tax Appeals Tribunal.
However, the application was not filed within the statutory 30-day period. The company said it later discovered the omission on January 30, 2025, after URA issued a third-party agency notice to Standard Chartered Bank seeking to collect Shs 124 million.
Chefette subsequently hired new lawyers and applied to the Tribunal for an extension of time on February 14, 2025. The Tribunal dismissed the application on April 24, 2025, prompting the company to appeal to the High Court.
Court demands proof of lawyers’ negligence
In its arguments, Chefette maintained that it had acted promptly by instructing its lawyers and should not be penalised for their alleged failure to file the application. It argued that the Tribunal had applied the wrong legal principles by requiring the company to continuously monitor its lawyers’ actions.
URA opposed the appeal, arguing that statutory deadlines in tax disputes must be respected and that the company had failed to provide sufficient evidence explaining the lengthy delay.
In examining the first ground of appeal, Justice Odongo found that the company had not presented adequate evidence to establish that its former lawyers had received instructions and subsequently failed to act on them.
The court noted the absence of written instructions, correspondence, a sworn affidavit from the former advocates admitting the alleged mistake, or evidence of a formal professional misconduct complaint.
The judge emphasised that allegations of negligence by legal counsel cannot, on their own, justify an extension of time.
The judgment stated that an applicant seeking an extension must provide direct and corroborative evidence, including an affidavit from the former advocate admitting the error or verifiable documentary proof of timely instructions accompanied by a formal complaint to the Law Council Disciplinary Committee.
The court consequently found no merit in the first ground of appeal, holding that the Tribunal had correctly assessed the evidence presented.
Clients are entitled to trust their lawyers
On the second ground of appeal, the High Court agreed with Chefette on an important legal principle: clients who engage advocates are entitled to rely on their professional competence and should not automatically be expected to supervise court filings themselves.
The judge found that the Tribunal had misdirected itself to the extent that it imposed an affirmative legal duty on the company to personally monitor registry filings or continuously supervise its lawyers.
However, the court stressed that reliance on legal representation does not automatically excuse missed deadlines.
A taxpayer must demonstrate that clear instructions were given within the prescribed period, that the advocate accepted them, and that the failure to file was directly attributable to the advocate’s mistake rather than the client’s own inaction.
The court underscored that statutory time limits remain essential to certainty in tax administration and that extensions must be granted only where sufficient cause is established.
Implications for taxpayers
The judgment highlights the importance of maintaining proper records when engaging legal representatives in tax disputes. Written instructions, acknowledgements, correspondence and other documentary evidence may prove critical when a taxpayer seeks relief after a missed deadline.
It also reinforces the distinction between a client’s right to trust an advocate and the obligation to establish, with credible evidence, that the advocate’s conduct caused the delay.
For businesses contesting tax assessments, the decision serves as a reminder that allegations of professional negligence must be substantiated before courts can consider extending statutory deadlines.(For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
