It prevents a person from denying the truth of a representation made by another. The Tribunal does not think that the concepts of “truth” and “legality” are one and the same thing. Those are different concepts. From the above definitions, it is doubtable whether a party can rely on a representation made by a third party. In this case it was the GOU that purportedly made the representation to the applicants and not the respondent, which are different legal entities.   The respondent has argued that there is no estoppel against a statute. The respondent stands to be corrected.

There has to be a distinction between a legal act, conduct or representation, which is intra vires, and one which is illegal or ultra vires.   Where an act, conduct or representation is legal, estoppel may operate. In Regina v Inland Revenue Commissioners Ex parte M. F. K. Underwriting Agents Ltd 1990 WLR 1545 the court in dismissing the application held that: “it was within the managerial discretion of the Inland Revenue to give assurances as to the taxation treatment which financial securities would receive albeit that might involve the revenue forgoing tax to which they might be entitled, for such assurances to be relied upon or form the basis, in the event of breach, of a successful application for a judicial review, they must have been given in response of full disclosure, by the party seeking them, of the clear terms of a specific transaction.” In Reg. V I.R.C., Ex.p Matrix Securities Ltd [1994] WLR 334 the court stated that: “It is now established that in certain circumstances, it is an abuse of power for the revenue to seek to extract contrary to an advance clearance given by revenue.

In such circumstances, the taxpayers can by way of judicial review apply for an order preventing the revenue from seeking to enforce the tax legislation in a sense contrary to assurance given: Reg. V Inland Revenue Commissioners, Ex parte Preston [1985] A.C. 835. But the courts can only restrain the revenue from carrying out its duties to enforce taxation obligations imposed by legislation where the assurances given by the revenue make it unfair to contend for a different tax consequence, as a result of which unfairness, the exercise of its statutory powers by the revenue would constitute an abuse of power: see per Lord Templeman, at p. 864G. It is further established that if the taxpayer, in seeking advance clearance, has not made a full disclosure of the relevant circumstances, the revenue is not acting unfairly, and therefore is not abusing its powers, if it goes back on an advance clearance which it has only given in ignorance of all the relevant circumstances…” Hence once an assurance is legal, the Tribunal does not see why Uganda Revenue Authority cannot be estopped. It all boils down as to whether the taxpayer is seeking for tax mitigation or tax avoidance as understood under S. 91 of the ITA.

Where a representation or act is illegal, estoppel cannot operate. In Minister of Agriculture and Fisheries v Matthews [1950] 1 KB 148 at 154 Cassels, J held that: “.. an ultra vires act done by a statutory body whose powers is limited by the statute or statutes which brought it into existence and subsequently regulate its action is not an act at all…” In Golden Leaves Hotels and Resorts Limited and Apollo Hotel Corporation v Uganda Revenue Authority Civil Appeal 64 of 2008, the Court of Appeal held that the principle of estoppel can neither be used as a sword nor a shield against a statutory provision. The court cited the case of York Corporation v Henry Leethan & Sons Ltd. [1924] All. E.R. Rep 477 where it was held that: “A body charged with statutory powers for public purposes is not capable of divesting itself of those powers or of fettering itself in their use, and an agreement by which it seeks to do so is ultra vires and void. Such an ultra vires agreement cannot [be] intra vires by reason of estoppel, lapse of time, ratification, acquiescence, or delay…”

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