On 13th May, 2025, in a detailed and well-reasoned judgment, High Court Judge, Hon. Lady Justice Patricia Mutesi, schooled the Tax Appeals Tribunal (tribunal) on the dos and don`ts of determining Temporary Injunction Applications.
The judgment arose from an appeal filed by Kalungi Estates Ltd. On 4th March 2025, the tribunal comprising of Crystal Kabajwara (Chairperson), Stella Nyapendi (Member) and Rosemary Najjemba (Member) issued an order granting a temporary injunction to Kalungi Estates Ltd. However, in the same ruling, the tribunal went ahead to determine the main application, by ordering the Applicant to pay the entire assessed amount.
The application before the tribunal was narrow and straightforward:
“Whether the Applicant is entitled to the grant of a temporary injunction.”
Kalungi Estates Ltd had sought relief to halt the Uganda Revenue Authority (URA) from auctioning or disposing of its impounded equipment while it contested a tax assessment of UGX 1,101,929,563—a liability it believed to be both inflated and legally flawed.
And yet, instead of maintaining the status quo, as the law governing injunctions demands, the tribunal delivered what amounted to final judgment on matters not yet tried.
From the outset, Hon. Justice Patricia Mutesi emphasized the purpose of an injunction:
“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 a tribunal to make orders on how the status quo… can be altered before the main case is decided.”
The Hon. Lady Justice concluded that the Tribunal had:
- Pre-judged the core dispute.
- Overstepped its jurisdiction.
- Abused the legal framework governing temporary relief.
- Ground 1: The Tribunal ruled on the merits of the main application during the injunction hearing.
“All those observations were uncalled for and superfluous,” said the Judge.
- Grounds 2–5: The Tribunal wrongly affirmed audit findings, enforced recovery of disputed taxes, and refused to release property—despite those issues being reserved for trial.
- Grounds 6 & 7: The Tribunal confused tax deposits of UGX 440M and 480M, then ordered 100% payment—in blatant violation of Section 15(1) of the Tax Appeals Tribunals Act, which caps pre-hearing payments at 30%.
“Harsh, punitive and arbitrary,” declared Justice Mutesi.
- Grounds 8 & 9: Conditioning asset release on full payment contradicted the injunction’s protective intent, and failing to try or reserve factual deposit issues further clouded the Tribunal’s competence.
“If this ruling came from a student, you’d mark it with red ink. But this came from professionals,” lamented one Kampala practitioner.
The Final Verdict
Hon. Lady Justice Mutesi:
- Set aside the Tribunal’s unlawful orders and prejudicial observations.
- Maintained the temporary injunction without preconditions.
- Directed the Tribunal to properly reconsider the preliminary objection.
- Awarded Kalungi Estates Ltd 75% of the costs.
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