Zimbabwe Sugar Sales (Private) Limited v Zimbabwe Revenue Authority

### Preamble
Judgment No. SC 1
100/22
Civil Appeal No. SC 470/21
NOT REPORTABLE/DISTRIBUTABLE
ZIMBABWE SUGAR SALES (PRIVATE) LIMITED
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NOT REPORTABLE/DISTRIBUTABLE

ZIMBABWE SUGAR SALES (PRIVATE) LIMITED
V
ZIMBABWE REVENUE AUTHORITY

SUPREME COURT OF ZIMBABWE
MAVANGIRA JA, BHUNU JA & MAKONI JA
HARARE: 21 MARCH 2022 & 20 SEPTEMBER 2022

T. Mpofu, for the appellant

T. Magwaliba, for the respondent

MAVANGIRA JA:

1. This is an appeal against the whole judgment of the Special Court of Income Tax Appeals which upheld the dismissal of objections raised by the appellant against certain assessments for income tax made by the respondent.

2. At the commencement of proceedings Mr Magwaliba, for the respondent, indicated that he was abandoning the points in limine that he had raised. He submitted that the parties had agreed to address the merits of the appeal. For that reason, the said points in limine will not detain the court and will therefore not be adverted to at all.

FACTUAL BACKGROUND

3. Before I give a detailed factual background, it is pertinent to state at this early stage, that in the court a quo, the parties filed a statement of agreed facts. The said statement reads in relevant part as follows:


“9. The parties agreed that the appellant has never charged for nor has it ever received a commission from the Mills. It however issues invoices in its own name and is invoiced by its suppliers in its own name …

10. The respondent contends that, having considered the tax position of the appellant, (it) concluded that the agreement between the appellant and the Mills, its parent companies, was abnormal in that parties dealing at arm’s length in marketing agents arrangements would not have entered into the arrangement where the agent was not paid a commission or any other remuneration by the principals.”

4. The appellant is a private company duly incorporated in Zimbabwe and carries on the business of the sale and distribution of sugar produced by Hippo Valley Estates Limited and Triangle Limited (the mills) to both local and export markets. The mills are registered tax entities for income tax purposes and they jointly own the appellant in equal shares. The appellant is a special purpose vehicle incorporated in 1963 through a Memorandum of Decisions, with a specific mandate to provide for the central marketing and distribution of sugar produced by the mills.

5. The respondent is a regulatory body responsible for collecting revenue in terms of the Revenue Authority Act, [Chapter 23:11].

6. In 2018, the appellant was subjected to investigation by the respondent’s Commissioner of taxes, for the period commencing 1 February 2009 to 31 March 2015. The investigation revealed that the appellant was not declaring any income for tax purposes. The appellant’s explanation or stance was that it was not declaring any income for tax purposes because the purported income earned from sugar sales was merely notional income that did not come into existence for the mills, in terms of the 1963 Memorandum.


7. The Commissioner made a finding to the effect that the appellant was a separate legal entity which ought to declare its own income and not submit nil returns as it was doing. The respondent thus invoked s 98 of the Income Tax Act [Chapter 23:06], (the Act). The section provides for circumstances under which the Commissioner may determine the liability for any tax and the amount thereof. He/she may do so in circumstances where a transaction, operation or scheme has the effect of:

   (a) avoiding or postponing liability for any tax, or

   (b) reducing the amount of such liability and he/she is of the opinion that:

   (i) the avoidance or postponement of such liability, or

   (ii) the reduction of the amount of such liability was the sole purpose or one of the main purposes of the transaction, operation or scheme.

8. On 5 April 2018, the respondent, through the Commissioner, invoked s 45 (1) of the Act and issued estimated amended assessments in terms of which the total taxable income was US$7,465,153 for the tax year ending 31 March 2010; US$11,534,130.40 for the tax year ending 31 March 2011; US$6,044,609.03 for the tax year ending 31 March 2012; US$7,903,403.57 for the tax year ending 31 March 2013; US$6,042,911.87 for tax year ending 31 March 2014 and US$5,774,756.89 for the tax year ending 31 March 2015 respectively together with a 60 per cent penalty for tax avoidance. The appellant’s outstanding tax was estimated to amount to US$45,316,077.33. The income was estimated at 5 per cent of the sales made by the appellant on behalf of the mills.


9. On 24 April 2018, following the issuance of the assessments, the appellant raised a number of objections in terms of s 62 of the Act.

10. One of the objections raised was premised on the fact that the appellant was a special purpose vehicle which was never intended to operate as a stand-alone profit making company and that its annual accounts were fully incorporated into those of the mills, both of which are registered tax entities. It was contended that the primary objective of the appellant was purely to provide a conduit through which all sugar produced by the mills could be pooled and sold. The net income would then be equitably distributed pro-rata according to their respective production contribution. It therefore argued that there was no income earned for the purposes of tax. The appellant also objected to the 5 per cent income tax rate imposed by the respondent on the basis that the respondent did not show how it arrived at that rate or how much commission was allegedly earned or accrued during the period of the assessments.

11. The second objection raised by the appellant was that there was no basis for the respondent to have invoked s 45 (1) of the Act. The section empowers the Commissioner to make an assessment in which a taxpayer’s taxable income or assessed loss is estimated either in whole or in part in every case in which a taxpayer defaults in furnishing any return or information or in which the tax payer is not satisfied with the return or information furnished. The basis of the objection was that the appellant had not defaulted in furnishing any return or information which is required in terms of the Act and neither was there cause to believe that any information or return it was required to give was unsatisfactory. It was contended that there was no omission envisaged by s 45 (1) of the Act and that the Commissioner was therefore not justified in invoking the provision and making an assessment in which the appellant’s taxable income was estimated.

12. The appellant also raised an objection to the penalty that was imposed as being unjustified. The appellant’s stance was that it was not required to account for income tax as it did not earn any income. It had thus not acted with any corporate moral dishonesty to justify the imposition of the penalty by the respondent.

13. In response to the first objection stated earlier herein, the respondent found that the 1963 Memorandum of Decisions was an official document which guides the appellant’s operations and therefore any deviation from the stipulated guidelines ought to have been done by way of an addendum. The services offered by the appellant attracted income tax that ought to have been accounted for. As such, the rate for commission had to be estimated at 5 per cent on the basis that the appellant was not prepared to accept the estimation route as it argued that its operations were purely on a cost recovery basis.

**THE RESPONDENT’S DETERMINATION OF OBJECTIONS RAISED**

14. The respondent thus disallowed the appellant’s objections except for that relating to the penalty; it waived the penalty.

**THE APPEAL TO THE COURT A QUO**

15. Dissatisfied with the respondent’s decision, the respondent appealed to the court *a quo* challenging the respondent’s basis for invoking s 98 of the Act to determine its tax liability. It also challenged the respondent’s findings on the ground that it erred in estimating the appellant’s income at 5 per cent especially in circumstances where there was no default. The appellant further challenged the respondent’s finding that the appellant’s income comprised commission plus expenses.

THE COURT A QUO’S DETERMINATION

16. The court a quo was faced with three issues for determination. The first issue was whether or not, as a matter of law, it was open to the respondent to invoke the provisions of s 98 of the Act. In determining this issue, the court a quo found that the appellant had entered into the arrangement in terms of which it operated, through the 1963 Memorandum of Decisions, for the purposes of avoiding or postponing liability. It found that this position was evidenced by, and in accordance with, the 1963 Memorandum in terms of which the appellant was entitled to earn commission from the mills and not to merely conduct its operations on a cost recovery basis.

17. The court further found that clause 4 of the Memorandum gave a clear distinction of the two accounts that were to be opened by the appellant for the differentiated amounts to be received by the appellant. In addition, clause 3 of the Memorandum stated that commission was to be deposited into the Crop Disposal Account. With regard to the rate of commission to be paid by the mills to the appellant, the Memorandum provided that this was to be agreed upon in terms of the Memorandum. It is on that account that the court a quo came to the conclusion that the appellant did not operate on a cost recovery basis only but also on commission paid to it by the two mills. The appellant was therefore the receiver of an income called commission.

18. It was also the court a quo’s finding that the appellant had no other documents besides the 1963 Memorandum of Decisions which was still extant and binding, together with the guidelines that it was still using in the execution of its functions. The court relied on s 8 (1) of the Income Tax Act to come to the conclusion that the appellant was not a division of either of the two mills but was a registered company doing business in its own right and was not automatically exempted from paying income tax. It also noted that it was common cause that the appellant was registered for value added tax. The court concluded that it was appropriate, in the circumstances, for the respondent to invoke the provisions of s 98 of the Act.

19. The second issue was whether or not a 5 per cent gross turnover was an appropriate figure in the circumstances. The court found that the Memorandum of Decisions confirmed that there was a commission to be received by the appellant and that it was therefore prudent on the part of the respondent, to come up with a reasonable percentage of the envisaged commission. It also found that the appellant was in its explanation of the unusual business arrangement between it and the mills, unable to satisfy the respondent. The conduct of the appellant thus forced the respondent to proceed as it did in terms of the power given to the Commissioner by s 45 (1) of the Act. The court a quo thus concluded that the respondent acted fairly and reasonably in the circumstances.

20. The third issue that the court a quo had to determine was whether or not the appellant’s income should comprise commission plus expenses. The court found that this question had been answered in the affirmative by the findings on the second issue above. It concluded that the estimated commission includes the cost recoveries that were realised by the appellant. In the result, once deemed a stand-alone tax payer, the appellant automatically fell under the provisions of the Act and its activities or operations were income generating for tax purposes.

THIS APPEAL

21. Aggrieved by the decision of the court *a quo*, the appellant lodged this appeal on the following grounds:

“1. The learned Judge in the court *a quo* misdirected himself on the facts in finding in the absence of evidence that the appellant had received income in the form of a commission.

2. The learned Judge in the court *a quo* erred in giving undue weight to a Memorandum of Decisions made in 1963 (“the Memorandum”), which document was not only irrelevant but also not binding upon the appellant.

3. The learned Judge in the court *a quo* erred in concluding that the percentage payable as commission was not specified in a deliberate attempt to “disguise the income”, and failed to place sufficient weight on the fact that both Triangle Limited and Hippo Valley Estates Limited accounted fully for the net proceeds received from sales in their annual accounts.

4. The learned Judge in the court *a quo* erred in finding in the circumstances of the matter that there was in existence a scheme entered into with the intention of reducing or postponing the payment of tax.

5. The learned Judge in the court *a quo* erred in finding that the sole or main purpose of the arrangement that exists between the appellant and its principals was to reduce or postpone the payment of fees.

6. The learned Judge in the court *a quo* erred in finding that it was open to the respondent in the circumstances to invoke the provisions of s 45 of the Income Tax Act in making an assessment.

7. The learned Judge in the court *a quo* erred in finding that the assessment was fair and reasonable and erred further in not finding that income tax had been assessed on gross turnover and not on gross income.

8. The learned Judge in the court *a quo* erred in finding that the provisions of s 3 of the Administrative Justice Act [Chapter 10:28] and the provisions of s 68 (1) of the Constitution of Zimbabwe had been fulfilled.


RELIEF SOUGHT

1. That the appeal be and is hereby allowed with costs.
2. In the result the judgment of the court a quo is set aside and the following is substituted:
   2.1 The assessments made by the respondent and dated 5 April 2018 are hereby set aside. Respondents shall pay the costs of the appeal.”

22. In motivating the appeal, Mr Mpofu, for the appellant, submitted that there are three fundamental principles of tax law relevant to the determination of the appeal. Firstly, that income tax is based on income and where an entity does not make income, there is no tax liability that ought to be imposed. Secondly, that it is lawful for a subject to manage its affairs in such a manner that ensures it earns no income. Thirdly, that a subject has a right to run its business in a manner that it wants and it is not the Commissioner’s duty to direct a taxpayer on how to run its business.

23. Counsel argued that the agreed position between the parties was that the appellant had never charged for nor received a commission from its parent companies. The appellant having not received an income, there was, by extension, no income tax liability. He also submitted that the provisions of s 45 of the Act relate to entities that make an income as contemplated by the Act.

24. It was counsel’s further submission that the judgment of the court a quo leads to double taxation as well as to taxation of a party that has no income. He argued that the invocation of s 98 of the Act was improper as the arrangement between the appellant and its parent companies was such that the appellant was a marketing desk and there was thus no tax avoidance. Furthermore, that there was no basis for imposing or estimating 5 per cent as the gross turnover for the appellant.

25. Mr Mpofu submitted that s 98 cannot be reconciled with s 45 and that the two sections cannot be used at the same time.

26. Per contra, Mr Magwaliba, for the respondent, agreed, in his submissions that the general rule is that where no income has been made, no tax can be levied by the respondent. He however submitted that s 98 is a statutory exception to that general principle.

27. Counsel contended that the cited section is intended to apply where a party forfeits the earning of an income for purposes of avoiding tax liability in circumstances where tax would otherwise have been due upon the earning of an income. He submitted that in casu, a transaction was concluded in terms of which the appellant abandoned or forfeited the earning of a commission and that this amounted to an abnormal arrangement as contemplated by s 98 of the Act.

28. Counsel further submitted that s 45 of the Act was properly invoked because the Commissioner was not satisfied with the appellant’s tax returns, hence triggering the 5 per cent estimation. Whilst conceding that there should be a basis for the estimation made, counsel submitted that in casu, the basis was never sought by the appellant before the Commissioner or before the court a quo and that it cannot now be an issue at this stage.

**ANALYSIS**


29. The appellant’s bone of contention before this Court is that the court *a quo* erred in upholding the decision of the respondent when it found that the appellant entered into or was involved in the establishment of a transaction, operation or scheme with its holding companies which justified the invoking of s 98 of the Act. Its contention is that the appellant has always acted as a non-profit entity that carries out its business on a cost recovery basis only, to meet its expenses.

30. S 98 of the Act provides as follows:

“98 Tax avoidance generally
Where any transaction, operation or scheme (including a transaction, operation or scheme involving the alienation of property) has been entered into or carried out, which has the effect of avoiding or postponing liability for any tax or of reducing the amount of such liability, and which in the opinion of the Commissioner, having regard to the circumstances under which the transaction, operation or scheme was entered into or carried out –

(a) was entered into or carried out by means or in a manner which would not normally be employed in the entering into or carrying out of a transaction, operation or scheme of the nature of the transaction, operation or scheme in question; or

(b) has created rights or obligations which would not normally be created between persons dealing at arm’s length under a transaction, operation or scheme of the nature of the transaction, operation or scheme in question; and the Commissioner is of the opinion that the avoidance or postponement of such liability or the reduction of the amount of such liability was the sole purpose or one of the main purposes of the transaction, operation or scheme, the Commissioner shall determine the liability for any tax and the amount thereof as if the transaction, operation or scheme had not been entered into or carried out, or in such manner as in the circumstances of the case he considers appropriate for the prevention or diminution of such avoidance, postponement or reduction.”

31. In *H Bank Zim Ltd v ZRA* 2015 (1) ZLR 1007, the following was stated at 1022D – G:

“The essential elements of s 98 of the Income Tax Act
The various requisites which must co-exist to justify the Commissioner’s invoking his powers under s 98 were enumerated by SMITH J in *A v Commissioner of Taxes* 1985 (2) ZLR 223 (H) at 232F-233B, by reference to
 Secretary for Inland Revenue v Geutsyn, Forsyth & Joubert 1971 (3) SA 567 (A) at 571 E-H in these terms:

(a) a transaction, operation or scheme entered into or carried out;

(b) which has the effect of avoiding or postponing liability for tax on income or reducing the amount thereof; and which

(c) in the opinion of the Secretary, having regard to the circumstances under which the transaction, operation or scheme was entered into or carried out-

(i) was entered into or carried out by means or in a manner which would not normally be employed in the entering into or carrying out of a transaction, operation or scheme of the nature of the transaction, operation or scheme in question; or

(ii) has created rights or obligations which would not normally be created between persons dealing at arm’s length under a transaction, operation or scheme of the nature of the transaction, operation or scheme in question; and that

(d) the avoidance, postponement or reduction of the amount of such liability was, in the opinion of the Secretary, the sole or one of the main purposes of the transaction, operation or scheme.”

See also *G Bank Zimbabwe Ltd v Zimbabwe Revenue Authority* 2015 (1) ZLR 348 (H) at 364C-D.

32. It is clear from a reading of s 98 that the Legislature intended to give the respondent the discretion to deem certain activities as income generating activities for tax purposes. The section is invoked where the Commissioner takes the view that certain arrangements that are entered into by entities are so entered for the purposes of tax avoidance. It therefore has to be shown, *in casu*, that the activities undertaken by the appellant exhibit the presence of a transaction, operation or scheme which has the effect of avoiding or postponing its liability as a tax payer. The business and activities undertaken by the appellant, being the conduct of sugar sales, clearly satisfy the first requirement in that it shows the presence of a transaction, operation or scheme.

33. The second requirement that must be satisfied before the invocation of s 98 by the respondent is that the Commissioner ought to be satisfied that the arrangement is intended to avoid or postpone or reduce liability of any tax. The Commissioner must formulate an opinion that the avoidance or postponement or reduction of such liability was the sole or one of the main purposes of the transaction, operation or scheme. The arrangement *in casu* was between the appellant and the mills. The appellant was created by the mills as a vehicle for selling sugar on their behalf whilst disguised as a non-income generating entity.

34. This becomes clearer when consideration is given to the fact that the appellant was incorporated in terms of a Memorandum of Decisions dated 1963. Clause 4 of the Memorandum states as follows:

“Sugar Sales will keep two bank accounts:-
(a) Sugar Sales Crop Disposal Account into which all proceeds of sugar will be paid and from which distribution to estates and commission due to Sugar Sales will be paid
(b) Sugar Sales Administration account from which the expenses of the Sugar Sales Company will be paid.” (the underlining is added)

In addition, the Export Sales clause, being clause 3, also provides as follows:

“All charges directly attributable to export sales will be charged in the export section, the necessary ledger accounts being opened accordingly. Examples of such direct expenses are: … commission at agreed rate to Sugar Sales.” (the underlining is added)


35. It is self-evident that clause 4 of the Memorandum provides for a commission to be deposited into the Crop Disposal Account. A commission was thus clearly anticipated, in terms of the Memorandum. It would thus be reasonable for the Commissioner to deduce, as he did, that the appellant did not only operate from a cost recovery basis, but also did, or ought to have received, a commission at a certain rate. Notably, the Commissioner’s deduction would also accord with what would be viewed as a normal relationship.

36. Not to be overlooked and in addition to the above, is the fact that the appellant issues invoices and is also itself invoiced in its own name and that it claims value added tax returns. It therefore enjoys a distinct commercial legal status from the mills by which it was created, and is a running business concern which is registered for value added tax.

37. After giving due consideration to the dictates of the law and how it had been applied in other cases as well as to the facts presented before the court *a quo*, the learned Judge aptly stated at p 6 of the judgment:

> “Given the above requirements of the law, I am persuaded to agree with Mr Magwaliba that the Commissioner was correct in deeming that the appellant had entered this arrangement for the purpose of avoiding or postponing a liability. The arrangement between the appellant and the mills does not normally exist in companies that are distant. That position is evidenced by the Memorandum of Decisions made in 1963 where the appellant was entitled to earn commission from the mills and not only get income on a cost recovery basis. That indeed is how a normal business between a principal and an agent is run. To that end, clause 4 of the Memorandum of Decisions gives a clear distinction of the two accounts to be opened by the appellant for the different amounts to be received by the appellant. The commission mentioned in clause 3 was to be deposited in the Crop Disposal Account. Admittedly, the rate of commission to be paid by the two mills to the appellant was to be agreed upon. In that regard, I am forced to conclude that the appellant did not operate from a cost recovery basis only, but from the commission paid by the two mills as well. Clearly the appellant was the receiver of an income called “commission.”


The buttressing factor on this issue, is that the appellant had no other document besides the Memorandum of Decisions of 1963, which other document would have clearly stated the abandonment of commission. My opinion is that the 1963 Memorandum of Decisions remains binding and indeed is still in existence to date. The guidelines therein are still used by the appellant in the execution of its functions. The appellant does not deny that in its operations it is guided by the Memorandum of Decisions of 1963. This finding brings in the provision of s 8 (1) of the Income Tax Act [Chapter 23:06] which, in part, states:

‘8 Interpretation of terms relating to income tax’

(1) For the purposes of this Part-

‘gross income’ means the total amount received by or accrued to or in favour of a person or deemed to have been received by or to have accrued to or in favour of a person in any year of assessment from a source within or deemed to be within Zimbabwe excluding any amount (not being an amount included in ‘gross income’ by virtue of any of the following paragraphs of this definition) so received or accrued which is proved by the taxpayer to be of a capital nature and, without derogation from the generality of the fore-going, includes ….’

The appellant was not a division of either of the two mills. It was a registered company doing business in its own right and was not automatically exempted from paying income tax. It is common cause that because of its legal status the appellant was, as a running business concern, registered for value added tax. One wonders why, without application, the appellant would then enjoy a special dispensation with respect to income tax.”

38. Despite the absence of tangible evidence that the appellant received a documented commission, the appellant must be presumed, in terms of the provisions stated in the 1963 Memorandum, to have received a certain income from the transactions that it carried out, and still does, on behalf of the mills and had to be treated or dealt with by the respondent accordingly. The opinion formulated by the Commissioner that the nil returns filed by the appellant were filed to avoid tax is, in the circumstances, justifiable.

39. The Commissioner’s opinion cannot be faulted on a holistic view of the facts with particular regard being paid to clauses 3 and 4 of the Memorandum and to paras 9 and
 10 of the statement of agreed facts filed by the parties in the court a quo. A fortiori, the factual findings of the court a quo cannot be faulted.

40. It is settled that an appellate court will not readily interfere with the findings of fact of a lower court. The enunciation was made in *Hama v National Railways of Zimbabwe* 1996 (1) ZLR 664 (S) at 670 in the following words:

“… an appellate court will not interfere with a decision of a trial court based purely on a finding of fact unless it is satisfied that, having regard to the evidence placed before the trial court, the finding complained of is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at such a conclusion.”

It was similarly emphasised in *Friendship v Cargo Carriers Ltd* SC 1/13 at p 7 of the judgment:

“It is now settled that an appellate court will not interfere with the exercise of its discretionary power by a lower court unless it is shown that the lower court committed such irregularity or misdirection or exercised its discretion so unreasonably or improperly as to vitiate its decision.”

See also *Reserve Bank of Zimbabwe v Granger & Anor* SC 34/01 at pp 5 – 6.

41. It is also necessary to consider the provisions of s 45 of the Act. It reads:

“45 Estimated assessments

(1) In every case in which any taxpayer makes default in furnishing any return or information, or in which the Commissioner is not satisfied with the return or information furnished by any taxpayer, or notwithstanding that a taxpayer may not have been called upon to furnish a return of income under this Act, in which case the Commissioner has reason to believe that such taxpayer is about to leave Zimbabwe the Commissioner may make an assessment in which the taxpayer’s taxable income or assessed loss is estimated either in whole or in part and thereupon shall give notice thereof to the taxpayer to be charged, and such taxpayer shall be liable to pay the tax upon the same if any tax is chargeable” (the underlining is added)

42. Pertaining to this provision and other aspects, the learned Judge in the court a quo stated inter alia:

“The above section empowers the Commissioner to estimate income, where it is evident that a taxpayer who has underdeclared income should not escape liability for tax. That power also allows the Commissioner to revoke earlier decisions. In two South African cases Sepataka v CSARS, 72 SATC 279 and Mokoena v CIR 2011 (2) SA 556 the court held that, there was nothing alien about a Commissioner estimating taxes where a taxpayer had defaulted or had not satisfied the Commissioner with the information furnished in order to prove their income.

I am of the firm view that the commission contemplated in the Memorandum of Decisions included the cost recoveries that were realised by the appellant. As I have already stated above, I remain convinced that 5% was a fair and reasonable percentage to estimate as the gross turnover for the appellant. The appellant did not disclose the true nature of its operational finances and therefore left the Commissioner without a choice but to estimate the taxable income. The Commissioner, upon assessing the business arrangements between the appellant and the mills, had correctly questioned the nil returns by the appellant. I therefore hold the view that, in the circumstances 5% was a fair and reasonable percentage. I have in casu ruled that the percentage of the commission was fair and reasonable and accordingly the invocation of the provisions of s 3 of the Administrative Justice Act [Chapter 10:28] and s 68 (1) of the Constitution of Zimbabwe would not be called for.

Further, it appears to me that the appellant does not appreciate the full distinction between gross turnover and gross income. In these circumstances, the terms would mean the same thing. There is therefore nothing amiss in imposing tax on gross turnover.” (the underlining is added).

DISPOSITION

43. It is our view that in casu, the appellant has failed to demonstrate or justify why this Court ought to interfere with the findings of the court a quo in so far as, by the dismissal of the appeal against the respondent’s decision disallowing its objections, they validated the opinion formulated by the Commissioner and the resultant invocation of s 98 of the Act. Furthermore, the reliance on s 45 cannot be said to have been ousted by the provisions of s 98. The Commissioner not having been satisfied with the return of information furnished by the appellant was well within his rights to make an assessment in which the appellant’s taxable income was estimated either in whole or in part and to give notice thereof to the appellant, with the appellant thereupon becoming liable to pay the tax chargeable thereon.

44. There being no basis established on which this Court could find fault with the determination by the court a quo, it follows that the appeal has no merit. We find no reason to disagree with the respondent’s counsel’s submission that each party must bear its own costs.

45. In the result, it is accordingly ordered as follows:

The appeal be and is hereby dismissed with each party bearing its own costs.

**BHUNU JA:** I agree

**MAKONI JA:** I agree

Scanlen & Holderness, appellant’s legal practitioners
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