Mapigano, J: A
The applicants are aggrieved by the decision of the first respondent, the Commissioner of Income Tax, contained in the two letters annexed to their statement, to impose withholding tax on them under the provision of s 34(2B) of the Income Tax Act, 1973 in respect of the auction sales of their coffee beans conducted by the second respondent, B the Tanzania Coffee Board, and to require the latter to deduct or collect the amounts and remit the same to him. They have come to this court to seek the prerogative orders of certiorari, mandamus and prohibition.
The third respondent, the Attorney-General who is joined in the proceeding by virtue of C the provision of the law has raised an objection, which is that the matter goes beyond the cognizance of this court. The point is urged upon the principle that the High Court will not entertain such application if an adequate remedy is otherwise available. On behalf of D the Attorney-General Mr Songoro, State Attorney has pointed out that there is a mechanism provided by the Income Tax Act, vide ss 91 and 93 for addressing and determining such disputes. Mr Songoro has accordingly submitted that the remedy provided by that Act is the proper remedy which ought to be resorted to by the applicant, and that therefore, leave to seek the prerogative orders should be refused. E
Dr Kapinga, counsel for the applicants sees things differently. His proposition is that the principle that the jurisdiction of the High Court would be fettered by the availability of an alternative remedy does not apply here, as in this case, a party has come to the court F with a contention that the imposition of the tax is wholly without the authority of the law and/or where, like in the instant case, the special or alternative remedy is of an onerous and burdensome character. Dr Kapinga has drawn on two authorities to bolster up his opinion, ie R v Paddington Valuation Officer Hammatlas Harilal Mehts v State of Nadhya G Predesh and Others (2). Counsel has also referred this court to the provision of s 93(5) of the Income Tax Act which makes the lodging of an appeal against the decision of the Commissioner conditional to the assessee's depositing half of the whole amount of tax assessed together with any interest due under s 101. H
Section 34(2B) of the Income Tax Act provides as follows:
`Every person shall upon payment of any amount to any person in respect of any fee, charge or like I consideration for goods supplied or services rendered, which is chargeable to tax, deduct from that amount ax at a rate of two per cent of the gross amount payable.'
It is elucidated under ss (2C) that the requirement prescribed above only applies to A payments made by the Government agency, local government authority, parastatal organisation and companies.
The point urged by the applicants is essentially that the section was misconstrued and misapplied by the Commissioner, because no payments have been made by the B second respondent in respect of the subject matters of the impeached intended deductions. This is a troublesome and momentous point, and that probably explains why the Annexures seem to evince a state of uncertainty on the part of the Commissioner demonstrated by his approbation and disapprobation. I am satisfied that the applicants C have a good arguable case against the decision and directive of the Commissioner which deserves serious consideration, and it is relevant to observe that the Attorney-General appears to hold the same view.
The decisions cited by Dr Kapinga strongly support the proposition that where the whole D basis of a decision or action of a public body or official is impugned, and where the alternative remedy provided by a statute is not convenient, beneficial and effectual as the prerogative remedies, the High Court can entertain an application to review the impugned decision or action and upon the merits of the particular case make or refuse E to make the prerogative orders. The two decisions are highly persuasive authorities, and no one can deny that they are entitled to the highest respect, considering the ranks of the courts which pronounced them, ie the Court of Appeal of England and the Supreme Court of India. I respectfully adopt the views expressed therein as correct. F
Dr Kapinga would have me find that the present case comes four square within the principle restated in those two cases. But Mr Songoro thinks otherwise, and the question I have to decide is whether there is really a machinery given by the Income Tax Act for G questioning the decision and directive of the Commissioner impugned in this application. As shown, Mr Songoro has relied on the provisions of ss 91 and 93 of the Act.
Those provisions relate to objections to assessment of income tax made by the commissioner in terms of part XIV of the Act, and to the rights of appeal to the Appeals H Board and Tribunal in that connection. The vital question is whether there has been any such assessment here. In fine, the applicants contend, by para 16 of their statement which appears at p 12 but which should be renumbered para 17, that a deduction made under s 34(2B) is not an assessment of income tax, and that there is nothing in the Act I which provides for any remedy against an erroneous deduction of tax made under the section.
That is an attractive point, and it is interesting, gratifying and significant that in one of the A annexures, ie the letter dated 6 February 1996, the Commissioner has more or less expressed the same view. This is what he states in para 7:
`Let me mention in passing that withholding tax from payments in respect of goods or services is B merely a mechanism of payment of advance tax which is ultimately set off from he final income tax liability chargeable on the assessee in the respective year of income. In case any such assessee ... is aggrieved on the tax assessed when served with a final notice of assessment, the assessee is at C liberty to dispute the assessment pursuant to s 91 and 93 of the Income Tax Act, 1973.'
I understand this to imply that it is premature for the applicants to seek the remedy given by ss 91 and 93. If that is the case, then in my judgment it underscores the idea that a D deduction made pursuant to s 34(2B) is not predicated upon an assessment of income tax by the Commissioner, and is thus not the kind of assessment which is envisaged by ss 91 and 93.
I accept the idea that the applicants' complaints are not amenable to the provisions of the Income Tax Act. E
I hold, therefore, that the intended application is perfectly justifiable in this court. Leave is accordingly granted.
A