Trek loses $45m Supreme Court garnishee appeal

HARARE - Trek Petroleum (Private) Limited — one of the country’s leading fuel retailers — faces an uncertain future after the Supreme Court threw out its urgent application to stop the Zimbabwe Revenue Authority (Zimra) from garnishing its bank accounts over a $45 million tax debt.

Supreme Court judge Susan Mavangira, who heard Trek’s urgent application in her chambers, ruled that the company — which started operations about seven years ago — failed to establish a strong case for the immediate lifting of the garnishee.

Zimra swooped on its accounts after discovering a discrepancy in the transfer of assets to it by a company known as Chaparrel Trading in 2014.

At the time, the tax liability was valued at $44 million before it was reviewed upwards to $45 million.

Trek started its operations in 2010.

As of 2015, it had 24 service stations, employing over 600 workers.

These figures are now much higher considering that Trek made considerable investments in the intervening period.

In making its application before the superior court, Trek claimed that its business had ground to a halt on account of the garnishee as it was unable to purchase any stock and its business could not otherwise be conducted.

If further claimed that if the garnishee was not lifted immediately, it would be forced to lay off its employees to the prejudice of some 300 families.

Trek also argued that there was no basis for it to suffer all this harm as it was fully paid up and had no tax liability.

Furthermore, its predecessor — Chaparrel Trading — also owed no obligation to Zimra, according to Trek, contending that there was need for what it called a patent illegality and incidence of abuse of statutory authority to be arrested.

But Mavangira ruled that the garnishee was properly imposed as the two parties, Zimra and Trek, had engaged each other for more than a year, but during that time, the petroleum firm had failed to convince the tax authorities that the figures obtained from its own documents and computers could not be relied on for tax assessment purposes.

“Until the applicant establishes, as it contends, that on the facts of this matter there had in fact been no valid or legitimate assessment, the presumption can only be that the respondent (Zimra) conducted itself in accordance with the terms of the law as set out in the (Income tax) Act,” argued the Supreme Court judge.

“The Act allows for the applicant to engage the respondent for relief, as discussed earlier, but the applicant did not make use of the possible avenues open to it,” added Mavangira in dismissing Trek’s appeal.

Mavangira said Trek’s argument that the assessment done by the Zimra was not done in terms of the law was premised on the contention that the tax authority “thumb-sucked figures and ended up with unattainable if not bizarre results in terms of trade or sales achieved by the applicant’s sister company and predecessor”.

She said this contestation was met with Zimra’s contention that its assessment was based on Trek’s own figures that were obtained from its documents and computers and that this was in accordance with the law of which the tax system is based on self-assessment by the taxpayer.

“It is also met with the allegation that the applicant failed, over a period of over a year, to give a satisfactory explanation as to why it was denying its own figures,” reads part of the court documents.

Trek first appealed against the garnishee at the High Court, but failed to get the relief sought after Justice Joseph Musakwa dismissed its appeal last month.

It then took the matter up to the Supreme Court, where it again lost the appeal.

In garnishing the company’s accounts, the tax collector relied on documents obtained from Trek and a computer seized from the firm.

Zimra’s investigations apparently revealed that Trek was maintaining two sets of financial statements, one of which reflected higher scales of income than those submitted to the tax authority.

Trek and Chaparrel have common shareholding, directorship and management.

Comments (2)

Sounds a very dodgy company this TREK - who are the Directors then Mr reporter ?

ace mukadota - 21 October 2017

I have been searching for ways to pump up my income and I'm happy to say thattrading is the one I have been looking for all these time. I am a newbietrader but I can say that I am really profiting from it. SuperiorTradingSystem is a great help in achieving my success. 100% legit! iF you are interested in learning how totrade Google SuperiorTradingSystem.

dannahaustria - 24 October 2017

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.