Basajjabalaba’s Petition Against Tax Bill Dismissed by Court

  • by Rodney Mponye
  • October 7, 2020

A panel of five Constitutional Court Justices have dismissed a petition in which businessman Hassan Basajjabalaba’s company, Haba Group Uganda Limited had challenged tax imposition on its 169 billion shillings compensation. The money had been awarded to the company by the government following the cancellation of its contract to manage and develop city markets including Shauriyako, Nakivubo, Owino, Nakawa and the Constitutional square.

On Tuesday, the Constitutional Court Justices led by Egonda Ntende dismissed the nine-year-old petition after one of Basajjabalaba’s lawyers Joseph Kyazze tendered in court a letter withdrawing the case on grounds that it was overtaken by events.

The letter dated September 21 2020 signed by three law firms indicates that neither the Attorney General nor Uganda Revenue Authority who were listed as respondents in this matter had filed a response to the petition.

Kyazze thus asked court to endorse the withdraw of the petition citing that each party should bear its own costs since the respondents had not filed a response. The Attorney General’s representative Brian Musota also did not have objections to the petition.

Accordingly, the Judges were left with no option but to dismiss the petition.

In 2009, Basajjabalaba’s company Haba Group Uganda Limited was awarded 169 billion shillings as compensation for the loss of contracts to manage and develop four city markets and the Constitutional Square.

As a result, the compensation was assessed by the then Attorney General Professor Khiddu Makubuya following President Museveni’s June and November 2009 directives with a consideration that the businessman was not going to pay tax.

However, according to the court record, on June 22, 2011, Uganda Revenue Authority issued third party notices freezing the bank accounts of Haba Group Uganda Limited in Orient, UBA and Tropical Banks where the authority suspected that the compensation had been channeled.

Aggrieved with URA’s decision, Basajjabalaba through his lawyers petitioned the Constitutional Court in 2011 where he sued the tax body and government.

In his petition, Basajjabalaba argued that the actions of the tax body and government were unconstitutional because he had been deprived of property (money) without even being accorded a right to fair hearing.

Court further heard that the actions of freezing his company’s bank accounts were unconstitutional because they were frozen when there was no tax owed to URA.

However, in March 2020, another panel of Constitutional Court Justices led by Justice Kenneth Kakuru ordered Basajjabalaba to refund to government all the money that was illegally paid to him as compensation for losing the tender to manage city markets and the Constitutional Square.

The Judges noted that the compensation money was paid to Basajjabalaba and his companies illegally following a contract that he had entered into with the defunct Kampala City Council without the advice of the Attorney General.

This March decision followed a successful petition by Legal Brains Trust through their lawyer Isaac Ssemakadde who had asked court to direct Basajjabalaba, his companies and all the government officials implicated in this compensation saga to refund it as it had reportedly been obtained fraudulently.

Basajjabalaba was in 2015 charged before the Anti Corruption Magistrates Court for evading tax of 20 billion shillings. But he petitioned the superior courts seeking to block the trial in vain. In July 2020, a panel of seven Supreme Court Justices led by Dr Esther Kisaakye gave him an order which blocked his trial until his petition seeking to quash the charges against him is concluded.