Zambia Revenue Authority v Supa Oil Zambia Ltd (SCZ Appeal 63 of 1998) [1999] ZMSC 84 (22 June 1999)

IN THE SUPREME COURT OF ZAMBIA 907 APPEAL NO. 42 OF 1997 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: ZAMBIA REVENUE AUTHORITY APPELLANT AND SUPA OIL ZAMBIA LIMITED RESPONDENT Cor ata: Sakaia, Chaila, Chirva, JJS 30th October, 1997 and 22nd June, 1999 For the Appellant : Mr. M. Chibiya, Deputy Legal Counsel For the Respondent : Mr. L. P. Mwanawasa, SC. JUDGMENT Chaila, JS, delivered the jtrdr^ent of the court. This is an appeal by the appellant against the decision of the High Court on the interpretation of Statutory Instrument No. 103 of 1995. The delay in delivering this judgment is regretted but it was due to circumstances beyond our control. briefly, the facts of the case were that the Minister of Finance, acting under Section 15 of the Value Added Tax Act, Chapter 331 of the Laws of Zambia, issued Statutory Instrument No. 103 of 1995. Under that Statutory Instrument, the Minister of Finance ordered that tax be paid on cotton seed. The respondent company was not happy with the provisions of that Statutory Instrument and challenged the Statutory Instrusent. The High Court ruled in favour of the respondent company. The High Court - J2 - (Chitenge, J) ruled that the cotton seed which the respondent company had bought for tne purpose of manufacturing of cooking oil did not attract VAI'. The appellant being dissatisfied with the High Court ruling or decision, filed an appeal. The respondent company also filed cross-appeal which was later abandoned. The sam issue in this appeal as can be seen from the arguments centres cm the interpretation of the Statutory Instrueent. Mr. Chibiya, counsel for the appellant has submitted that the Minister acted within his jurisdiction. The Statutory Instrument was not issued in bad faith. They argued that cotton seed was not an edible seed and the Minister acted lawfully. He referred us to the relevant Statutory Instrument No. 103 of 1995 and argued that the cotton seed does not fall within the category. Mr. Mwanawasa, counsel for the respondent company supported the interpretation placed on the Statutory Instrument by the learned trial Judge. He argued that the idea of affording exemption to the cotton seed was to bring the prices of the seed down. Nr. Mwanawasa argued that if the cooking oil manufactured from cotton seed attracted VAT, the its oil product would be expensive. He referred us to the case of Cookies vs Jorison 1898 2QB at pages 91 and 99. We have considered the submissions of the learned counsel and the authorities they have referred us to. Me would like to refer to the provisions of the Statutory Instrument. The Regulation reads: •2. The First Schedule to the Act is amended - (a) by the deletion of item one of sub-item 5 ad the substitution therefor of the following item: (5) Agricultural products - fresh edible plant material including vegetables, fungi, fruits, nuts and the bulbs, seeds and plants thereof; maize, wheat and other cereals; meal and flour; stockfeed; bread; sugar; edible and cooking oils and facts; sunflower seeds; except when any of the above product is: (a) supplied by a restaurant, cafeteria, canteed or like establishment; or - J3 - (b) supplied by or on behalf of a taxable supplier for export froe Zaabia, where such evidence of exportation is produced as the Commissioner General teay, by administrative rule, require. The contention by the appellant’s counsel is that seeds and plants thereof included the cotton seed as an exempted item. The Regulations speak of agricultural products, then the Regulations attempt to give examples of the products. It cannot be argued that cotton is not an agricultural product. It is a coupon cause that cotton produces seed and it is difficult to understand how it can be interpreted that cotton seed cannot be included in this definition of agricultural products. The learned trial Judge was on a fire ground when he concluded that cotton seed was among the exempted items, we agree with his interpretation. The appeal is therefore dismissed with costs. E. U. SAKALA SUPREME COURT JUDGE M. S. CHAILA SUPREME COURT JUDGE D. K. CHIRWA SUPREME COURT JUDGE