Motor magnate, Satar Dada, of the famous Toyota brand on Friday won an appeal against the taxman for inclusion of taxi owing to a transaction with a third party-Lobtrans (Pty) despite making huge losses. The Court of Appeal (CoA) upheld the appeal lodged by Motor Centre Botswana against Botswana Unified Revenue Service (BURS) after the motor dealership said it sustained a loss amounting to P53 million in the income tax year 2009. Motor Centre, a company which deals with the supply and repair of Toyota motor vehicles and owned by Satar Dada, had alleged that the loss was sustained in the ordinary course of business and in the production of income; it sought to deduct that amount from its assessable income. Though the initial assessment is said to have allowed the deduction, pursuant to an audit carried out by the tax agency, it was found that the loss was sustained when a loan to an unrelated company, Lobtrans (Pty) Ltd, became irrecoverable and that the loss was accordingly of a capital nature and not deductible. Dada and his company the appealed unsuccessfully to the Board of Adjudicators and thereafter unsuccessfully to the High Court. The CoA on Firday ruled that both the board and the High Court erred as the former resolved to adhere to the agreement rather than to have regard to what was satisfactorily proved to have been happening on the ground and it accordingly misdirected itself. The High Court, in the CoA’s view, succumbed to the same error, holdings that the facts were set out in the agreement and not as presented by Motor Centre. The court went on to hold that Motor Centre could not introduce evidence to contradict the terms of the agreement. The CoA bench has concluded that the loss was shown to have been sustained in the ordinary course of Motor Centre’s business in the production of income and therefore upheld the appeal. The CoA bench has in addition set aside the additional assessment on the appellant in respect of the 2009 tax year.
PSP unfairly dismissed Ruth Seipone
Former Deputy Secretary in the Ministry of Investment, Trade and Industry (MITI, Ruth Seipone has won her appeal against government for unfair dismissal from that position, allegedly due to inefficiency in performing her duties. The circumstance leading to her appeal is that, Seipone who had held high office in the public service for a number of years but retired with effect from 30th June 2013. She was then immediately employed as a Deputy Secretary in the ministry of trade on a 24 month contract. Seipone was accused in a letter addressed to her from the Permanent Secretary to the President (PSP) for being unpunctual, arriving late at a number of key government meetings and failing to set an example is a high ranking public officer. In a letter from the PSP that was written to her on the 23rd August 2013, the PSP drew Seipone’s attention to a number of meetings in which she pitched up late, including the minister’s meeting for Special Cabinet. Her contract was ultimately terminated on the 30th October 2013. The CoA has ruled that Seipone’s dismissal was procedurally unfair on account that the Permanent Secretary having acted in violation of section 41 (2) (b). The CoA ruling says it is clear from the aforegoing that the statutory requirement of the appellant having to be given an opportunity to improve was not complied with. The court noted that this being a statutory requirement, it was incumbent upon the PS to act in strict compliance therewith and not done so, the court says this casts a shadow on the procedural fairness of the dismissal.
Bid rigging appeal allowed
The Court of Appeal has allowed the appeal in which Rabbit Group was appealing against a decision by the Competition Authority (CA) in a case in which the company is facing bid rigging accusations. The appeal emanates from a case in which Rabbit and Creative were believed to have colluded in a contract for the supply of infant formula to the Ministry of Health which it was feared, if it occurred would have been in contravention of section 25 of the Competition Act. Upon receiving a notification from an undisclosed source suggesting that there might have been anti-competitive practice between Rabbit and Creative with respect to the aforementioned tender, the Competition Authority is said to have instigated investigation into the practice, and if the investigation justified it, to refer the matter to the Competition Commission. On the 18th of August 2015, the Commission is reported to have heard argument from parties and resolved that the applicant being the CA had no jurisdiction to file an application with it, which was filed on August 2014 as the one year period allowed to carry out investigations had elapsed. The commission further argued that therefore there has been non-referral, and all these actions of the commission made the CA to approach the High Court to appeal the findings. The matter was argued before Justice Singh Walia who ordered the matter back to the commission for hearing on the merits of the complaint. It was after the order of Justice Walia that Rabbit made an appeal to the Court of Appeal and according to the judgement of Lord Hamilton of the CoA, no agreement was made between the Authority and any complainant to extend the period of investigations. However, Hamilton says an application to extend that period was made by the Authority to the Commission and was made as a matter of urgency on August 27, 2014.
The application is said to have been accompanied by an affidavit by its then Acting CEO who noted that the CA had on the 26th August 2014 opened an investigation and that the one year period will lapse on the 27th August 2014 and by then the investigative process would not yet be complete.
On the last day of the lapse of the period of investigations, the Commission is said to have made an order granting the Authority a six month extension to conclude its investigations on the two entities accused of bid-rigging. In February 2015, a notice of motion was filed with commission and the Authority referred a complaint to the Commission against Creative and Rabbit in relation to alleged bid-rigging. According to the judgement, the notice was duly served on each of Creative and Rabbit and both gave notice of opposition to the complaint. Rabbit opposed the complaint on grounds that proceedings were a nullity as they were founded on an invalid time-extension granted following the expiration of 12 month period laid down for the carrying out of the investigations. They also argued that the time-extension period was invalid because the last day on which an extension could be lawfully granted was 25 August 2014 if one has regard to the fact that on the Authority’s version an investigation was opened on 26 August 2013. Rabbit also submitted that the time extension granted was also void by reason of the fact that it breached the rules of natural justice which are implicitly entrenched by the Competition Act in respect to person under investigations. The CoA upheld the Rabbit Group appeal and ordered that findings by the Commission which were made on 18 August 2015 be set aside. Some of those are in which Commission said the applicant being the CA, had no jurisdiction to file an application with it, which was filed on August 2014 as the one year period allowed to carry out investigations had elapsed. Both the appellant, Rabbit Group and Respondent, CA, were ordered to bear their own costs.