[2023] KETAT 627 (KLR)

Arm Current PLC (In Liquidation) v Commissioner of Domestic Taxes (Tax Appeal 606 of 2022) [2023] KETAT 627 (KLR) (3 November 2023) (Ruling)

Neutral citation: [2023] KETAT 627 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal 606 of 2022

E.N Wafula, Chair, AK Kiprotich, EN Njeru, Cynthia B. Mayaka & RO Oluoch, Members

November 3, 2023

Between

Arm Current PLC (In Liquidation)

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The appellant vide a Notice of Motion application dated the 14th day of February, 2023 and filed under a Certificate of Urgency on the February 15, 2023 sought for the following orders: -a.Spentb.That the tribunal be pleased to allow the appellant to file a further bundle of documents and/or that the further bundle of documents attached hereto be deemed to be duly on recordc.That the Tribunal be pleased to allow the applicant to file an amended Memorandum of Appeal and Supplementary Statement of Facts to corroborate the evidence submitted in the earlier filed Statement of Factsd.Costs of this application to be in the intended appeal.

2. The application which is supported by an Affidavit sworn by George Weru, a Director at Pricewater house Coopers Kenya Limited, on the 14th day of February, 2023 is premised on the following grounds: -a.That while preparing for the hearing of the Appeal the appellant realized that there are some documents that ought to form part of the appellant’s Record of Appeal that were not included in the record.b.That if the matter proceeds to hearing in the absence of the documents in issue there is immediate and imminent danger that the appellant’s evidence may not be admitted by the Tribunal to the prejudice of the appellant’s case.c.That in the absence of production of documents the tribunal will not have had full visibility of the appellant’s case as supported by the documents sought to be filed.d.That as a consequence of the need to produce and place documents on records, the appellant is desirous of amending its prayers to enable the tribunal to grant reliefs that would conclusively determine the matter on its merits.e.That the applicant stands to suffer irreparable loss if the appeal is not considered in totality.

3. The respondent in response to the application filed a Replying Affidavit sworn by Charles Webo Atwete, an officer of the respondent, on the 17th day of February, 2023 and filed on the even date in which it raised the following grounds in opposition: -a.That the application was filed on the February 15, 2023 when the appeal was scheduled for full hearing and without an explanation for doing so.b.That the appellant by design failed to attach to the application the documents it intends to introduce and that inspite of its having been directed by the Tribunal to effect service of the documents upon the respondent the appellant failed to do so.c.That the respondent is unable to appropriately and effectively respond to the application in the absence of the documents sought to be produced by the appellant.d.That the impugned decision before the tribunal is not an objection decision on merit but rather a notice of invalidation of the appellant’s objection for lack of relevant supporting documents.e.That the documents sought to be produced were the documents the respondent requested to be produced to enable it issue on objection decision.f.That allowing the appellant to introduce documents not supplied to the respondent during the objection proceedings is calling upon the tribunal to assume the statutory roles and functions of the respondent.g.That the documents sought to be introduced cannot aid the tribunal to determine in the appeal the issue of the validity or otherwise of the appellant’s objection.h.That the appellant has not indicated that the documents sought to be introduced had been supplied to the respondent during the objection proceedings.i.That allowing the application is basically re-opening the filing of pleadings in the appeal.j.That the application lacks merits and right to be dismissed.

Analysis & Findings 4. The parties in compliance with the directions of the tribunal to the effect that the application was to be canvassed by way of Written Submissions duly filed their respective submission that have been considered by the tribunal in arriving at the findings hereinafter.

5. The appellant in urging the application for the production of additional documents has relied on the principles set out by the Supreme Court in the case of Mohamed Mohamed & 3 others (2018) eKLR identified the following principles: -a.The additional evidence must be directly relevant to the matter before the court and be in the interests of justice;b.It is shown that it could not have been obtained with reasonable diligence for use at the trial was not within the knowledge of, or could not have been produced at the time of the suit or petition by the party seeking to introduced the additional evidence;c.Whether a party would reasonably have been aware of and procured the further evidence in the course of the trial is an essential consideration to ensure fairness and due process;d.The court must be satisfied that the additional evidence is not utilised for the purpose of removing lacunae and filling gaps in evidence. The court must find the further evidence needful;e.A party who has been unsuccessful at the trial must not seek to adduce additional evidence to make a fresh case in appeal, fill up omissions or patch up the weak points in his case

6. The respondent has opposed the application on the alleged factual basis that the documents being sought to be introduced by the appellant were never at any material time during the determination of the objection proceedings supplied to the respondent for consideration. That inspite of the respondent having requested for the documents to be supplied for its consideration while determining the merits of the notice of objection that the appellant failed to do so, thereby prompting the respondent to invalidate the objection for want of supply of documents in support of the objection.

7. The respondent further intimated that the documents sought to be produced remain completely undisclosed and that no service of the bundle of the documents was effected upon the respondent.

8. The material facts raised by the respondent in the Replying Affidavit remain uncontroverted by the appellant. The respondent did not file any Affidavit to attempt to disclose the nature of the documents sought to be introduced through the orders as prayed in the application and to offer any explanation for the possible cause for the failure to produce the documents during the determination of the objection proceedings and at the instance of filing the Appeal.

9. It is trite knowledge that the tribunal’s exercise of its discretion in allowing the filing of additional documents on the part of tax payer is fettered by the provision of section 56 of the Tax Procedures Act that an unequivocally suggest that the documents to be produced shall be limited to the documents made available to the Commissioner during the determination of the objection proceedings.

10. The Tribunal notes that the appellant did not annex any bundle of documents, as suggested in its prayers in the application, to the Affidavit in support of the application. The nature of the documents sought to be introduced completely remain undisclosed and it equally remain unclear to the tribunal if at all such documents were made available to the respondent for consideration during the determination of the objection proceedings. In the event for any good cause the documents were not made available to the respondent during the determination of objection proceedings no attempt at proffering such an explanation has been made on the part of the appellant.

11. In the light of the foregoing the appellant has been unable to justify the exercises of the tribunal’s discretion in allowing the application forproduction of the additional documents and for the consequential amendment.

Disposition 12. On the basis of the foregoing analysis the application lacks merit and the orders that accordingly recommend themselves to the tribunal are as follows: -a.The application be and is hereby dismissed with costs.b.No order as to costs.

DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF NOVEMBER, 2023. ERIC NYONGESA WAFULACHAIRMANABRAHAM KIPROTICHMEMBERELISHAH NJERUMEMBERCYNTHIA MAYAKAMEMBERDR. RODNEY OLUOCHMEMBER