S (On Application Of Mkandawire) v Minister and Others (Judicial Review case 01 of 2026) [2026] MWHCRev 3 (16 September 2026)

THE STATE (ON THE APPLICATION OF UPSON MKANDAWIRE) v MINISTER AND OTHERS IN THE HIGH COURT OF MALAWI REVENUE DIVISION PRINCIPAL REGISTRY Judicial Review case 01 of 2026 BETWEEN THE STATE (ON THE APPLICATION OF UPSON MKANDAWIRE) CLAIMANT AND MINISTER OF FINANCE 15T DEFENDANT THE COMMISSIONER GENERAL OF THE MALAWI REVENUE AUTHORITY 2N0 DEFENDANT ATTORNEY GENERAL 3RD DEFENDANT CORAM JUSTICE MATAPA KACHECHE Mwafulirwa for the Claimant W Chirwa for the second defendant Chimang’ganga (Ms) court clerk Note: Hon F Mbeta AG did not appear but filed Submissions on directions of the Court after he filed an application for rehearing. ORDER AND DIRECTIONS The Application 1. This is the order of this Court on the claimant’s application under Order 19 rule 20 of the Courts (High Court) (Civil Procedure) Rules, 2017 (CPR) for permission to apply for judicial review of the first defendant’s decision to promulgate subsidiary legislation known as Value Added Tax (Electronic Invoicing System) Regulations, 2026 (regulations) made under the Value Added Tax Act and the decision of the second defendant to roll out the use of the Electronic Invoicing System (EIS) as mandated by the regulations. In the event that permission is granted the claimant is also applying for an order of interlocutory injunction restraining the second defendant, his agents, servants or whosoever acting on his behalf from implementing the Regulations from the 1% day of May, 2026 until the determination of the judicial review proceedings or another order of the Court. 2. If permission is granted, the applicant will be seeking the following reliefs in the main application: THE STATE (ON THE APPLICATION OF UPSON MKANDAWIRE) v MINISTER AND OTHERS a. A declaration that the defendant’s decision is unconstitutional, and therefore illegal, as it violates the claimant’s rights to participate in public affairs under section 40(1)(c) of the Constitution and international law, the right to privacy and data protection under section 21 of the Constitution (as read with the Data Protection Act of 2024) and is an overreach to the Parent Act and therefore non- compliant with section 58 of the Constitution. b. A declaration that the Defendant’s decision is illegal, unlawful and procedurally improper and unfair as it was made without proper justification and without affording the Claimant and all those whose rights, freedoms and legitimate expectations or interests are affected an opportunity to be heard and participate in the formulation of the tax legal framework and the Regulations. ¢. A declaration that the defendants’ decision is unreasonable in Wednesbury’s sense as it fails to take into account the practicability of implementation and compliance within the short time. 3. The grounds upon which the reliefs are being sought are as follows: a. That the process leading to the promulgation of the Regulations was undertaken without adequate consultation with key stakeholders, including the claimant, business associations, data protection experts, and civil society. This omission violates the constitutional principles of participatory governance and procedural fairness. b. The Regulations are ultra vires the Value Added Tax Act, Cap 42:01 of the Laws of Malawi in that they introduce obligations and mechanisms not contemplated or authorised by the parent statute. The regulations purport to create substantive obligations and penalties that go beyond the scope of the enabling provisions of the Act. c. The Regulations envisage the collection, processing and transmission of sensitive personal and commercial data through the EIS. While there were attempts to align these Regulations with the Data Protection Act, 2024, several key provisions of the Act — particularly those relating to data minimization, consent and cross-border data transfer — have not been adequately considered. This raises serious questions of legality, proportionality and compliance with statutory data protection obligations. THE STATE (ON THE APPLICATION OF UPSON MKANDAWIRE) v MINISTER AND OTHERS d. 2 defendant’s decision to enforce the use of EIS which, as already pointed out, above is marred by illegality, within a short period space of time and without any regard to the views and concerns of the business community, including those of the Claimant herein, is unreasonable. 4. Pursuant to Order 19 Rule 20(3) the application was made without notice. However, upon perusing through the application and supporting documents, I directed that the application be made with notice under sub rule (4). Issues for Determination 5. There are two main issues for the Court to decide: 5.1.Whether permission to apply for judicial review can be granted. 5.2.Whether an injunction should issue restraining the second defendant from enforcing the Regulations pending the resolution of the Judicial Review proceedings. Background . The facts are straight forward. The first defendant has very wide powers under Section 63(1) of the Act to make regulations as he or she considers necessary for the carrying out of the purposes of the Act. In 2014, using the section 63 powers the first defendant promulgated the Value Added Tax (Electronic Fiscal Devices) Regulations which authorised the second defendant to establish a system for transmission, receipt, storage and monitoring of fiscal information relating to sales transactions by users of Electronic Fiscal Devices (EFDs). The second defendant did establish the system and required eligible suppliers to purchase EFDs and connect them the to the MRA’s system. The MRA was thus able to monitor sales made by the system’s users for the purpose of enforcing the VAT Act. The system has been in use for the past 12 Years. . Come 2024, Parliament amended the VAT Act with a view to phasing out of the use of EFDs and adopting a new system of electronic invoicing known as the Electronic Invoicing System (EIS). Section 11D of the Act was entirely replaced with a new section 11D authorising the second defendant to establish an electronic tax invoicing system and the first defendant to make rules for the operation of the same. [t is in view of this provision that the first defendant promulgated the Value THE STATE (ON THE APPLICATION OF UPSON MKANDA WIRE) v MINISTER AND OTHERS 10. 11. 12. Added Tax (Electronic Invoicing System) Regulations, 2026 (hereinafier, the Regulations). The Regulations set 1% February, 2026 as the date of commencement of EIS and enforcement of the compliance with the Regulations. The business community raised concerns with “the lack of consultations” prior to the enactment of the VAT (amendment) Act and also the promulgation of the 2026 Regulations. According to the claimant, several issues were raised and there was an agreement between the first and second defendant’s delegates to defer the enforcement of the Regulations until “all consultations are thoroughly done”. The second defendant subsequently issued a notice that it will roll out the EIS and phase out the use of EFDs by the 1% day of May, 2026. The claimant claims that he, through a business association of which he is a member, further engaged the first and second defendant to defer the rolling out of the EIS until legal issues are sorted out. The Last meeting was on 26" April, 2026 where the defendants acknowledged the problems with the system but the second defendant insisted that he will implement the EIS as his hands were tied as he is not the policy maker but merely an implementer of the law. It is in view of this stand, taken by the second defendant, that the claimant decided to commence judicial review proceedings. Defendants response All defendants oppose the application. The first and the third defendants were not present on the day set down for the application. However, the third defendant, on his own behalf and on behalf of the first defendant made a without notice application for a rehearing of the application. In my determination, to avoid delay, 1 directed that the third defendant do file submissions and serve the same on the other parties. My decision has taken into account both the present parties submissions and the Honourable Attorney General’s submissions. In his opposition to the application, the second defendant relies on a statement sworn by one George Chalira. Much of it gives the background to the Regulations which, in my view is not relevant to the application. However, substantially, the THE STATE (ON THE APPLICATION OF UPSON MKANDAWIRE) v MINISTER AND OTHERS 13. 14. 15. 16. second defendant denies that the rules are ultra vires the parent Act. He states that the stock management function, which requires the collection of a lot of data from the users, was already available on Msonkho online the difference being that it was being done manually and the claimant cannot now claim that users will be affected as he and the others have been submitting the same kind of data. The problem with the form in which the data is currently submitted, according to the defendant, is that the returns cannot be verified by the authority. Further, the data required under the EIS is that which the authority is already sanctioned by law to collect. In summary, the authority will be able to monitor transactions that the user has engaged themselves in. This information is already in possession of the authority. This data will only be used for computation of tax. The second defendant also states that the EIS was supposed to roll out on 2" August 2025 and the Authority gave a transition period of three months for the tax payers to migrate from EFDs to EIS. Apparently tax payers raised issues and the roll out was shifted to 1 February, 2026. It was later shifted further to 1% May, 2026. In the meantime, the Authority has been engaging taxpayers and giving them training on how the system will operate. The first and the third defendant rely on the same sworn statement of George Chalira. Additionally, the first and third defendant oppose the application on the grounds of the claimant’s lack of sufficient interest, failure to exhaust alternative remedies and whether he has established an arguable case fit for judicial review on any of the grounds he has advanced. The Law Order 19 rule 20 governs the procedure on Judicial Review. The rule provides as follows: (1) Judicial Review shall cover the review of- (a) A law, an action or decision of the Government or a public officer for conformity with the Constitution; or THE STATE (ON THE APPLICATION OF UPSON MKANDA WIRE) v MINISTER AND OTHERS (b) A decision, action or failure to act in relation to the exercise of a public function in order to determine- (i) Its lawfulness (ii) Its procedural fairness (iii) Its justification of the reasons provided, if any; or (iv) Bad faith, if any, where a right, freedom, interests or legitimate expectation of the applicant is affected or threatened. (2) a person making an application for judicial review shall have sufficient interest in the matter to which the application relates. 17.1t is clear therefore that for an applicant to be allowed an application for judicial review, there must be a decision action or inaction in relation to a public function. Usually these decisions, actions or inactions are made by public officers but there are certain times when the decisions are made by quasi-public bodies. The most important element though is that they should relate to a public function. It is incumbent on the applicant to demonstrate that a decision, action or inaction meets this requirement. 18. Further, the law is clear on the requirement that a claimant in a judicial review claim must have sufficient interest to commence a matter. For this to be satisfied it must be shown that the claimant possesses a legal or substantial right which is over and above that which the general public may possess in the matter. That is, he must prove that he or she has been directly affected by the action, conduct or law being complained of — see the recent case of Limbani Phiri and others v The president of the Republic of Malawi CC no. 37 of 2026. 19. Finally, the remedy of judicial review will not be available to a claimant where there is an alternative remedy via private law claims or where there is a direct right of appeal against the decision of a public officer. Determination 20. On the question as to whether there is a law, an action or a decision of the Government or a public officer in this matter, there is no contest. The first defendant made a decision to promulgate the Regulations herein. The function is public in THE STATE (ON THE APPLICATION OF UPSON MKANDA WIRE} v MINISTER AND OTHERS 21. 22, 23. 24, 25. nature. The claimant challenges the decision on the ground that the Regulations do not align with the parent Act (The VAT Act) and the Data Protection Act and that the process leading to their promulgation was done without adequate consultations. The second defendant comes in simply because of the decision to insist on rolling out the EIS based on the Regulations. Are the decisions amenable to Judicial review? Clearly the decisions herein are amenable to judicial review as the defendants are public officers and the decisions have been made in the exercise of the defendants” public functions. The Attorney General argues that the claimant does not have sufficient interest on the ground that he has failed to demonstrate any direct and substantial interest above and beyond that of any other VAT registered person. According to him, the Regulations will apply uniformly to all VAT registered persons. There is no dispute that the Regulations will apply uniformly to all VAT registered persons. However, the fact that a decision applies uniformly to a large group of individuals, or will have uniform effects, does not mean that individual members of that group do not have sufficient interest to commence judicial review proceedings. What is important is for the claimant to show that the decision or action of the government or public officer will affect him in a personal way. In fact, there is a possibility that each and every member of the public could be personally affected by a decision. The purpose of the requirement of sufficient interest is to restrict access only to those who have a high probability of being personally affected by a decision. In the present case, it is clear that VAT registered business persons will be required to abide by this law in their personal capacity. It will, according to the claimant, actually directly affect their rights under the Data Protection Act. In my view the claimant and any individual VAT registered business person has sufficient interest, On the question of alternative remedy, the Attorney General has argued that the claimant has not exhausted statutory remedies available to him. He has cited remedies under the Tax Administration Act and the Data Protection Act. I am of THE STATE (ON THE. APPLICATION OF UPSON MKANDAWIRE) v MINISTER AND OTHERS 26. 27. 28. 29. 30. the view that the cited remedies are not applicable to a dispute like the present one. The Tax Administration Act deals with disputes related to tax decisions by the Malawi Revenue Authority or the second defendant. The grievance here is against a decision of the Minister and the decision of the second defendant to implement the Regulations promulgated by the Minister. These are not tax decisions under the Tax Administration Act. Similarly, the remedies under the Data Protection Act are not an alternative ina dispute of the type we have here. The grievance in this matter is against the decision of the Minister and not action or inaction of a data controller, officer or processor. This ground of objection also fails. The last objection is based on whether the claimant has an arguable case or not. I observe that there is a great dispute on the facts and the law as presented both by the claimant and the defendants. These are not disputes to be summarily decided upon in this kind of application. I think the level of disputation is such that it merits amore in-depth consideration of the dispute in the substantive hearing of judicial review. I therefore grant permission to proceed to Judicial review. Coming to the issue of whether or not to grant the injunction or stay I have to point out that despite the applied for injunction targeting the date of implementation, being 1° May, 2026, the application itself was filed on 30% April, 2026. T was not able to attend to it unti] 4t May, 2026. At that point I directed that the application must be heard inter partes. This means that by the time I attended to the application the decision had already been implemented. Further, I have considered the undertaking by the claimant to pay damages in the event that the injunction is later found to have been wrongly granted or that the Regulations were after all regularly promulgated. It is my view that this country has hundreds of VAT registered and collecting business persons. It would be very difficult to quantify any losses that would be incurred due to failure by the MRA to collect relevant data from all these for purposes of calculating VAT. On the other hand, if the claimant suffers damages o ’ THE STATE (ON THE. APPLICATION OF UPSON MKANDAWIRE) v MINISTER AND OTHERS due to wrongful collection of his alleged business data jt would be a bit straight forward to assess the same. 31. This, plus the fact that the application was considered after the implementation date had already passed, means the balance of convenience lies in refusing a stay or an injunction. Further Directions 32. In view of this ruling I make the following further directions: a. The claimant should file any desired amendments, swomn statements, skeleton arguments and list of authorities and serve them within the next fourteen days; b. Allthe defendants must file and serve their defences, sworn Statements, skeleton arguments and lists of authorities within fourteen days of service by the claimant of his documents; ¢. Ifthe applicant wishes to make any replies to the defendants® defences he must do so within seven days of the defendants’ service of their documents. d. The hearing of this judicial review shall be expedited and shail be held in Mzuzu where the application was filed. 33. Costs of this application are in the cause, Made in chambers this 16t day of September, 2026 at 11:00 a.m. Justice Chimélzgan.i Matapa Kacheche