The High Court’s Commercial Division in Blantyre has thrown out an application for an injunction by Siku Transport to stop the Malawi Revenue Authority (MRA) from enforcing payment of K856 million in withholding tax and value added tax (VAT) arrears.
The court, presided over by Judge Chifundo Kachale, on Saturday further discharged an order it issued earlier which allowed a judicial review of the matter, arguing the order was erroneously obtained.
The court observed that Siku Transport, instead of filing an appeal with the court of a resident magistrate against MRA commissioner general’s decision as per VAT Act, the taxpayer wanted to invoke the judicial review process and the attendant injunctive relief to resolve a persisting dispute.
Ruled Kachale:“In this context, the VAT Act has created ample remedies for a disgruntled taxpayer; good sense and legal policy enjoin my court to defer to that process. I accordingly dismiss the application for an injunction and further discharge the leave for judicial review…”
Siku Transport, which is being represented by lawyers Kingsley Mapemba and Madalitso M’meta, may have to go to a magistrate’s court if they want to challenge the MRA commissioner general’s decision on the tax assessment.
On Monday last week, MRA served Siku Transport with a distress order and proceeded to seize 97 motor vehicles from the company to enforce payment of the disputed K856 million in taxes.
MRA corporate affairs manager Wilma Chalulu said last week after the seizure of the vehicles that the law allows the public tax collector to sell the seized property if not redeemed within 14 working days.
Siku Transport remains with seven working days from today to redeem the vehicles, which include a fleet of vehicles the company hires out and personal vehicles of the managing director.
Before the Saturday ruling, Siku Transport had, through its lawyers, argued that the garnishee orders MRA issued on the company’s accounts to enforce payment and other actions were hampering its business operations and had affected business relations with its suppliers as well as financiers.
But MRA, represented by lawyers Felix Tambulasi, Christopher Likomwa and Chiwala Chipeta, argued that Siku Transport might be abusing the court process since they were seeking the same remedies in respect of the same matter in the High Court, Blantyre Registry.
The lawyers argued that the proposal for the judicial review was premature because under Section 44 of the VAT Act, Siku Transport has a right to appeal against the commissioner general’s decision to a court of a resident magistrate.