[2023] KEHC 25033 (KLR)

Barkat Developers Limited v Commissioner of Domestic Taxes (Income Tax Appeal E165 of 2021) [2023] KEHC 25033 (KLR) (Commercial and Tax) (10 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25033 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Income Tax Appeal E165 of 2021

A Mabeya, J

November 10, 2023

Between

Barkat Developers Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. This is a ruling on the appellants’ application dated 10/9/2021. The same was brought, inter alia, under section 53 of the Tax Procedures Act (“TPA”) and section 32 (1) of the Tax Appeals Tribunal Act. The Motion sought, inter alia, leave and extension to file a Notice, Memorandum and Record of Appeal against the judgment of the Tax Appeals Tribunal made on 16/7/2021.

2. The application was supported by the affidavit of Alex Chirchir sworn on 10/9/2021. The grounds were basically that the decision of the Tribunal was communicated vide email on 16/7/2021 without any notification, knowledge or concurrence of the applicant. That the applicant learnt of the judgment on 18/8/2021 after making enquiries at the Tribunal. That the respondent had commenced enforcement measures by issuing agency notices against the appellant.

3. The Motion was opposed vide a replying affidavit of Victor Chabala sworn on 12/10/2021. It was contended that the Tribunal dismissed the appellants appeal against a tax demand of Kshs. 169,056,762/=. That no good or sufficient reason had been advanced to grant a stay of execution. That no security had been provided.

4. The Court has considered the rival affidavits and the submissions of the parties dated 12/5/2022 and 29/10/2023, respectively.

5. This is an application for extension of time for filing the Notice and Memorandum of Appeal out of time. There exists jurisdiction for the grant of the orders sought vide the sections of the law cited by the appellant

6. In Leo Sila Mutiso v Rose Hellen Wangari Mwangi, CA No. Nai 251 of 1997 (UR), the Court of Appeal held: -“It is now settled that the decision whether to extend time for appealing is essentially discretionary. It is well settled that in general the matters which this court takes into account in deciding whether to grant an extension of time are, first the length of the delay, secondly, the reasons for the delay, thirdly, (possibly) the chances of the appeal succeeding if the application is granted and fourthly the degree of prejudice to the respondent if the application is granted.”

7. It was submitted for the applicant that the respondent will not suffer any prejudice. That if the applicant paid the demanded taxes of Kshs. 4,639,423/=, it will close shop. That the failure to file the documents in time was caused by the administrative failure on the part of the Tribunal.

8. On behalf of the Commissioner, it was submitted that the judgment was now two years old and no sufficient reason had been advanced as to why the Notice and Memorandum were not filed on time.

9. The granting of an application such as the present one is discretionary. But like in all discretions, the Court has to act judiciously and not capriciously. The Court has to consider the length of the delay, the reasons for the delay, the probable prejudice to be suffered by the opposite party and possibly the chances of the appeal succeeding.

10. On the length of the delay, the impugned judgment was delivered on 16/7/2021. The present application was made on 10/9/2021. That was a delay of approximately 8 weeks. That delay was inordinate.

11. The reason for delay was that the judgment of the Tribunal was delivered by email. That discovery was made on 19/8/2021 upon inquiry.

12. I have considered that at the material time, there was the Covid 19 pandemic Courts and Tribunals had to seek ways of delivering justice without risking the lives of those concerned. Therefore, delivery of the judgment by email was perfectly okay. It was not suggested that the email used by the Tribunal was a wrong address. It must have been due to indolence either on the part of the applicant or its legal advisers, that they did not discover the judgment in time.

13. Further, it was not suggested that the 16/7/2021 was not the date of delivery or that the judgment was to be delivered on notice. If the judgment was delivered on the date it had been set for delivery, it is incredible for the applicant to have waited until after the lapse of 30 days to purport to inquire on the judgment. Had the applicant made inquiries immediately, it would have known the outcome and taken steps to appeal.

14. In any event, even after discovering the Judgment on 19/8/2021, the applicant took its sweet time until 10/9/2021 to lodge the present application. That in my view was an excessively long time considering the time lines given in the tax laws for appealing or taking necessary actions.

15. In view of the foregoing, the delay has not been properly explained.

16. On prejudice, delayed justice is justice denied. The judgment having not been appealed against on time, the respondent acquired a legal right to execute the same. He has been kept out of the fruits of his judgment for two years now. He has a legitimate expectation that he would realize the fruits of the judgment.

17. Accordingly, the Court is of the view that the application is without merit and the same is dismissed with costs.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 10TH DAY OF NOVEMBER, 2023. A. MABEYA, FCI ArbJUDGE