IPTL, PAP want TRA chief jailed over contempt

THE Pan Africa Power Solutions Tanzania Limited (PAP) and Independent Power Tanzania Limited (IPTL) Company petitioned the Tax Revenue Appeals Board to arrest and commit to prison the Commissioner General of the Tanzania Revenue Authority (TRA) for contempt of court.

According to an application for contempt proceedings lodged before the board yesterday, the TRA boss is alleged to have withdrawn Capital Gain Certificates issued in favour of the two companies for transfer of shares in IPTL Company, contrary to the order dated November 26, 2014.

The Secretary to the Board, Mr Respicius Mwijage, had ordered that “it is apparent that immediate intervention of this Board is required. Therefore, the status quo should be maintained. The intended withdrawal of the Capital Gain Certificate issued by (TRA) as per letter dated November 19, 2014, addressed to the Registrar of Companies be stayed.” 

Lodged under the certificate of urgency by Advocate Joseph Sungwa from Bulwark Associates Advocates, for PAP and IPTL, the applicants; the application comes up for hearing today. The respondents in the matter are TRA Commissioner General and Registrar of Companies. 

TRA Commissioner General is alleged to have withdrawn the two certificates; numbers 0049656 and 0049657 on November 27, this year just a day after the board issued the interim decision pending hearing and determination of an application to challenge the move. 

“This board is pleased to issue an arrest warrant against the Commissioner General for being in contempt of the orders issued on November 26, 2014, for maintaining the status quo -- that is to say ordering (him) to stay the withdrawal of Capital Gain Certificates,” reads one prayer in the application. 

Following such arrest, the applicants also request the board to commit the Commissioner General to prison for contempt of the lawful order. The two certificates were issued for sale of shares between Mechmar Corporation (Malaysia) Berhard and Piper Links Investment Limited and between Piper Link and PAP. 

In addition, the two applicants request the board to lift and rescind the Commissioner General’s letter for the withdrawal of the certificates in question, pending hearing and determination of the application for injunctive orders and that he should be bound to comply with the order of the board. 

Director of Operations with IPTL, Parthiban Chandrasakaran, has filed an affidavit to support the application for contempt proceedings, stating that they had obtained from the TRA Commissioner General the two certificates on December 23, last year. 

Surprisingly, he stated, on November 19, this year, TRA issued a six-day notice to the Registrar of Companies, showing his intention to withdraw the certificates. 

The reason behind the withdrawal of the two certificates based on alleged false contract share sale agreement between Mechmar for seven share capital gain which is 70 per cent holding in IPTL to Piper Link and sale of share agreement between Piper Link to relinquish its 70 per cent holding in IPTL to PAP. 

Such move pushed the applicants to file an appeal before the board against TRA and applied for temporary injunctive orders restraining the Commissioner General from taking any action, pending determination of the appeal. He stated that the board issued the order on November 26. 

Despite the board’s orders, the TRA Commissioner General wrote to the Registrar of Companies, withdrawing the two certificates. Mr Chandrasakaran states that being a citizen, the commissioner was not only amenable to the jurisdiction by also being obliged to obey and observe the laws of the country. 

“Unless this board issues the orders being canvassed in the application, there will be perpetuation of impunity and lawlessness, which is abusive of Good Governance and the Constitution upon which rests the tenets of democratic taxation the (Commissioner) is supposed to inculcate and uphold in the country,” he stated.

Source: Daily News