Online Reporter
Martin Kadzere, Zimpapers Business Hub
Delta Corporation has suffered a significant setback in its protracted legal battle with the Zimbabwe Revenue Authority (Zimra), after the Constitutional Court dismissed its application challenging earlier adverse court rulings regarding disputed tax assessments totalling about US$74 million.
Delta, the country’s largest beverages company, is contesting tax assessments issued by Zimra for amounts the company argues should have been payable exclusively in foreign currency.
The company contends that Zimra’s assessments failed to account for local currency payments made at the time, which have since been severely eroded by inflation and currency depreciation.
The additional tax assessments were issued in November 2024, compounding those from 2022.
This brought the total disputed amount to a substantial US$74 million, encompassing principal tax, penalties, and interest related to value-added tax (VAT) and income tax for the periods between 2019 and 2022.
Despite the series of adverse rulings by the High and Supreme courts, Delta has been pursuing appeals and legal proceedings at various levels, including the Constitutional Court and Zimra’s internal appeal processes.
By December 31, 2024, the company had already paid about US$9,2 million under the “pay now, argue later” principle and existing payment plans.
Journey through the courts
The company first went to the High Court to have the additional assessments declared invalid.
The High Court dismissed the company’s case, confirming the tax authority’s position and the validity of the assessments.
The High Court specifically addressed key issues, including the validity of the assessments, the obligation to accept taxes in Zimbabwean dollars, and the ability to levy penalties in forex.
It ruled in favour of Zimra on all these points, stating certain exemptions allowed for foreign currency tax payments.
Delta appealed the High Court’s decision to the Supreme Court, which dismissed the appeal entirely, agreeing with the High Court’s findings and reasoning.
The Supreme Court found that the High Court had adequately dealt with the issues raised.
Now, Delta was asking the Constitutional Court for “direct access” (permission to bring a case directly before it).
The company went on to challenge the Supreme Court’s judgment, arguing that their constitutional rights were violated, specifically right to equal protection of the law.
The company feels it was not treated equally to other litigants because the Supreme Court allegedly failed to address all the significant issues it raised, contrary to established legal precedent.
The company claims both the High Court and the Supreme Court failed or refused to hear arguments on six crucial issues that, if decided in its favour, would have led to a different outcome.
Delta argued the Supreme Court’s judgment, by not addressing all material issues, breached the Constitution, making the judgment invalid and not final.
The company argues that this case has wide-ranging effects for all taxpayers and that the significant tax liability threatens their business.
Zimra contends that the application was not genuinely about constitutional issues but is a “disguised appeal” to re-litigate the same tax dispute after losing in the High Court and Supreme Court.
It pointed to the company seeking to nullify the Supreme Court’s judgment and have the case sent back to the High Court.
Zimra asserted that the Supreme Court thoroughly analysed the High Court’s judgment and found that all issues were dealt with, meaning there are no new constitutional questions to be decided.
The national tax collector also highlighted that the company has other appeals pending in specialised tax courts concerning the same assessments, which the company allegedly did not fully disclose.
These are the courts specifically designed to handle disputes about tax assessments after a taxpayer objects to Zimra’s decision.
Delta claimed these other appeals were no longer valid. It said they had agreed with Zimra to remove them from the court roll (meaning to pause or stop them) so they could focus on the case that went to the High Court and then the Supreme Court.
It is believed that both parties had agreed to accept the outcome of that main case.
The company also argued that a legal principle called “estoppel” would prevent them from restarting those appeals anyway, as the High Court had already made a ruling on similar issues in another case.
The Constitutional Court was not convinced by the company’s argument that it had no other legal options.
The court pointed out that Section 13 of the Fiscal Appeals Court Act allows people to appeal Zimra’s decisions to these specialised tax courts.
These courts have the power to confirm, change, or throw out Zimra’s decision. Whether the “estoppel” argument would prevent the company from pursuing those appeals is up to those specific tax courts to decide, not the Constitutional Court.
Crucially, the court noted that when the company first went to the High Court, the same issues it wanted the High Court to decide were already pending before the Commissioner (Zimra’s internal appeals process) and then the two special tax appeal courts.
The Constitutional Court noted the High Court should not have taken on the case when the same issues were already being handled by other legal bodies (Zimra’s internal process and the specialised tax courts).
The Constitutional Court felt that the High Court’s decision to hear the case under these circumstances was irregular.
Because of this and the lack of a clear fundamental procedural irregularity or violation of rights by the Supreme Court, the Constitutional Court dismissed the company’s application.
This means the company did not get permission for direct access to the Constitutional Court it was seeking.
