Zimcor Trustees (Private) Limited v Zimbabwe Revenue Authority

The applicant, Zimcor Trustees (Private) Limited, was the registered owner of stand number 35 Vainona Township, Harare, which it had purchased from Tonderai Tarima. Tarima had previously attempted to reverse the sale and transfer through litigation in case HC 4827/10, but his action was dismissed by Patel J in judgment HH 163-11. The applicant subsequently sold the property to a third party. The capital gains tax was assessed and paid by the applicant to the respondent (Zimbabwe Revenue Authority), but the respondent refused to issue the required capital gains tax certificate necessary for transfer of the property. The respondent's refusal was based on apprehension about potential litigation, as Tarima had lodged an application for condonation of late filing of an appeal against Patel J's judgment in the Supreme Court, though this application had not been granted and no appeal had been lodged.

• Whether the Zimbabwe Revenue Authority was obliged to issue a capital gains tax certificate once the assessed tax had been paid
• Whether the respondent could lawfully withhold the tax certificate on the basis of apprehension about potential litigation by a third party
• Whether the existence of a pending application for condonation (not yet granted) justified the respondent's refusal to issue the certificate

The court granted the provisional order in terms of the amended draft order filed of record, ordering the respondent to issue the capital gains tax certificate to the applicant.

Where capital gains tax has been assessed and paid to the revenue authority, the authority is obliged by law to issue the requisite tax certificate. A revenue authority cannot lawfully withhold a tax certificate on the basis of apprehension about potential litigation by third parties. The existence of a pending application for condonation of late filing of an appeal, which has not been granted, does not justify refusal to issue a tax certificate, as the original judgment remains operational until successfully appealed.

The court observed that if Tarima (the third party) had a meritorious case, there was nothing stopping him from seeking an interdict against registration of transfer through proper legal channels. This suggests that the proper remedy for a party wishing to prevent property transfer is to seek an interdict, rather than the revenue authority acting as a gatekeeper based on speculative concerns about potential litigation.

This case establishes an important principle in Zimbabwean tax and administrative law that a revenue authority cannot withhold a tax certificate on the basis of potential or speculative litigation by third parties once the assessed tax has been paid. It reinforces the principle that administrative authorities must fulfill their statutory obligations and cannot use apprehension of future litigation as a basis for refusing to perform mandatory duties. The case also clarifies that until an application for condonation is granted and an appeal properly lodged, lower court judgments remain operative and binding.