[2024] KETAT 610 (KLR)

Baylem Limited v Commissioner of Domestic Taxes (Appeal 921 of 2022) [2024] KETAT 610 (KLR) (22 March 2024) (Ruling)

Neutral citation: [2024] KETAT 610 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Appeal 921 of 2022

E.N Wafula, Chair, EN Njeru, M Makau, E Ng'ang'a & AK Kiprotich, Members

March 22, 2024

Between

Baylem Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

Background 1. The Appellant moved this Tribunal vide a Notice of Motion dated 17th August 2023 and filed under a certificate of urgency on 26th September 2023 accompanied with a Supporting Affidavit sworn by Grace Maina, an Advocate for the Appellant, sworn on the 17th day of august, 2023, seeking the following Orders:-a.Spent.b.That the Honorable Tribunal be pleased to vary, review and set aside entirely the orders issued pursuant to its Ruling dated 9th June 2023 granting the Respondent leave to file additional documents and deeming its further Statement of Facts as being duly filed and served.c.That costs of the application be provided for in the main appeal.

2. The application is based on the following grounds:i.That on 28th November 2022 the Appellant’s counsel Messrs Rachier & Amollo LLP filed a Notice of Change of Advocate in place of CPA Ndoinyo Shadrack an in house Accountant of the Appellant. The said Notice was duly received by the Tribunal on equal date.ii.That the Respondent filed an application seeking leave to file additional documents, which was opposed by the Appellant through its Grounds of Opposition dated 8th February 2023. iii.That thereafter, the Appellant filed submissions in opposition to the Respondent’s application. The same were dated 13th March 2023 and duly served on the Tribunal and opposing counsel on 22nd March 2023. iv.That on 14th June 2023 counsel for the Appellant on attending a mention on the matter was informed that the Tribunal had issued a Ruling and subsequently wrote to the Tribunal requesting for a copy of the said Ruling.v.That despite its request, the Appellant’s counsel was not served with the Ruling and therefore, unable to comply with the directions thereon as it was in the dark on the Tribunal’s finding.vi.That on 26th June 2023 the Appellant’s counsel Messrs Rachier & Amollo LLP further wrote to the Chairman of Tribunal noting that it was constantly not served with court process which resulted in them being unaware of the proceedings in the matter and providing an address for service of court process which request was not responded to.vii.That it is only well afterwards that the Appellant’s counsel secured a copy of the Ruling only to learn that on Paragraph 16, the Tribunal made an adverse finding that the Appellant did not file submissions.viii.That the foregoing finding is gravely prejudicial to the Appellant who filed and served its submissions as stated hereinabove. If considered, the Appellant holds the considered view that the Tribunal would arrive at a different conclusion.ix.That this Tribunal has jurisdiction to review its orders from which no appeal has been preferred pursuant to Section 29A of the Tax Appeals Tribunal Act and the Respondent will suffer no prejudice whatsoever if this application is dispensed with.x.The Appellant therefore, humbly prays that the instant application is certified urgent and the orders sought granted pending the hearing and determination of the main appeal.

3. The Appellant lodged written submissions dated 18th day of October 2023 wherein the Appellant submitted that noting the practice of the Tribunal and the efficiency of sending pleadings through the Tribunal’s email, it is very unfair for the Respondent to now seemingly misguide that it is standard practice to file physical copies of documents. The Appellant relied on Section 32A of the Tax Appeals Tribunal Act which provides as follows:“Any notice, application, decision or other document that is to be made in writing under this Part may be submitted in hard copy or by electronic means.”

4. The Appellant submitted that the said Section 32A uses the operative word ‘or’ where a party may present a hard copy or by electronic means. The Appellant argued that it is therefore not mandatory to use one method over the other. Therefore, the Appellant submitted that it is not only lawful but standard practice to file and serve documents via email, the same is in line with the Chief Justice’s Practise Directions.

5. The Appellant submitted that its application satisfies the requirements of Section 29A of the Tax Appeals Tribunal Act.

6. The Appellant submitted that the Tribunal made a mistake in finding that submissions were not filed.

7. The Appellant relied on the Court of Appeal decision in National Bank of Kenya Ltd vs Ndungu Nijau as cited with approval in the case of Zablon Mokua v Solomon M. Choti & 3 others [2016] eKLR Miscellaneous Application 57 of 2016 where the court stated as follows:“A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established.”

8. Finally, the Appellant submitted that first it would not be possible for the Appellant to make the application for review within 7 days as it was never notified of the Tribunal’s decision when it was issued.

Response to the Application 9. In response to the application, the Respondent filed a Replying Affidavit sworn on 6th October 2023 by Victor Andambi Chabala, an advocate of the Respondent, stating as follows:i.That the Honourable Tribunal delivered a Ruling on the 9 June 2023 where the following orders were issued:-a.The Respondent's application for leave to file additional documents was allowedb.The Respondent’s further statement of facts was deemed filed and served.c.The Appellant was granted corresponding leave to file and serve any of its Supplementary statement of facts and/or additional documents which were to be filed fifteen (15) days of the date of the Ruling.ii.That in the Ruling, the Tribunal noted that Appellant did not file its submissions and the Tribunal relied on the Appellant’s Grounds of Opposition dated 8th February 2023. iii.That the email of 22nd March 2023 does not have a record of any mail from the Appellant and that the Respondent's registry does not have a record of any email from the Appellant dated 22nd March 2023. iv.That in light of the foregoing a physical copy duly signed and acknowledged would go a long way in demonstrating that indeed the submissions were filed and served.v.That this begs the question why the Respondent and the Honourable Tribunal coincidentally did not receive any email from the Appellant therefore, the Appellant is not being sincere to the Honourable Tribunal.vi.That in the Ruling, the Tribunal was kind enough to issue an order that the Appellant was granted corresponding leave to file and serve any of its Supplementary statement of facts and/or additional documents which were to be filed within fifteen (15) days of the date of the Ruling but the Appellant did not utilize the granted leave to file any document whatsoever.vii.That the instant application by the Appellant is an afterthought and has been filed in bad faith.viii.That at paragraph 26 of the Ruling, the Honourable Tribunal stated that the Appellant was not prejudiced as it was afforded an opportunity to traverse and make adequate response to the arguments fronted.ix.That upon perusal of the submissions allegedly filed by the Appellant , the Respondent stated that it should have utilized the opportunity of fifteen days issued by the Tribunal to bring its case and/or issues out which it failed to do so.x.That the Appellant in its application stated that it did not receive the Tribunal’s Ruling and came to know of it on 14th June 2023 when it attended a Mention before the Tribunal. The Respondent stated that the fifteen days granted by the Tribunal had not lapsed and the Appellant should not use this as an excuse since it still had about ten days to file any supplementary statement of facts and/or additional documents.x.In opposition to Appellant’s allegation that there was no response from the Tribunal on the copy of the Ruling, the Respondent stated that the Appellant should have visited the Tribunal physically to seek for assistance if it really had an issue with the Ruling being in favour of the Respondent.xi.That the Appellant at paragraph 9 of Grace Maina’s Affidavit, she does not state the exact date she secured the copy of the Ruling to inform the Respondent on whether it was way beyond the date of Ruling.xii.That the issues in the submissions allegedly filed by the Appellant are only an expounded version of its Grounds of Opposition, which the Honourable Tribunal took into consideration in issuing its Ruling.xiii.That the Appellant has come to seek equity but not with cleans hands.xiv.That the Tribunal should not vary, review nor set aside the orders issued pursuant to its Ruling dated 9th June 2023

10. The Respondent lodged its written submissions filed and dated 10th October 2023 whose content is similar to the content of its Replying Affidavit.

11. On whether the Honourable Tribunal in its ruling dated 9th June 2023 made an adverse finding holding that the Appellant did not file its submissions, the Respondent submitted that the Tribunal in the ruling noted that Appellant did not file its submissions and the Tribunal relied on the Appellant’s Grounds of Opposition dated 8th February 2023.

12. The Respondent submitted that the Appellant was not prejudiced as it was afforded an opportunity to traverse and make adequate response to the arguments fronted.

13. The Respondent cited the case of Mohamed Shally Sese (Shah Sese) vs Fulson Company Ltd & another [2006] eKLR to submit that the Appellant did not seek equity with clean hands. The court state that:“It is apparent that the Appellant has not been candid with this court. The orders the Appellant seeks are discretionary in nature and equitable. Equity calls to those seeking aid to come before it with clean hands and also do equity.”

Analysis and Findings 14. The application for determination before the Tribunal is seeking the Honorable Tribunal to vary, review and set aside entirely the orders issued pursuant to its Ruling dated 9th June 2023 granting the Respondent leave to file additional documents.

15. Section 29A of the Tax Appeals Tribunal Act provides as follows with regards to review of decree or orders:“(1)A person who is aggrieved by a decree or an order from which no appeal has been preferred from the Tribunal to the High Court, may apply for review of the decree or the order within seven days from the date the decree or order was made by the Tribunal.2. Applications for review of decree or orders under subsection (1) may be made –a.Upon the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within the knowledge of the Appellant or could not be produced by the Appellant at the time when the decree was passed or the order was made;b)On account of some mistake or error apparent on the face of the record; orc.For any other sufficient reason.3. Upon receipt of an application for review under subsection (1), the Tribunal may, set aside, vary or affirm the decree or the order, stating reasons for review as it deems fit within fourteen days after receipt of an application.”

16. The Court of Appeal in Civil Appeal No. 2111 of 1996, National Bank of Kenya Vs Ndungu Njau, held as follows:“A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evidence and should not require an elaborate argument to be established. It will not be sufficient ground for review that another Judge could have taken a different view of the matter nor can it be a ground for review that the court proceed on an incorrect expansion of the law”.

17. Apart from the Kenyan jurisdiction, the Supreme Court of India in the case of Ajit Kumar Rath vs State of Orisa & Others, 9 Supreme Court Cases 596 at Page 608 had the following to say about review:“The power can be exercised on the application of a person on the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the order was made. The power can also be exercised on account of some mistake or error apparent on the face of the record or for any other sufficient reason. A review cannot be claimed or asked merely for a fresh hearing or arguments or correction of an erroneous view taken earlier, that is to say, the power of review can be exercised only for correction of a patent error of law or fact which stares in the face without any elaborate argument being needed for stabling it. It may be pointed out that the expression “any other sufficient reason” means a reason sufficiently analogous to those specified in the rule.”

18. The Appellant filed the application for review on grounds that in Ruling dated 9th June 2023 the Tribunal erroneously stated that the Appellant had not filed written submissions when the submissions had been filed.

19. Whereas the Appellant argued that the Tribunal erred in finding that the Appellant had not filed submissions, the Tribunal is of the view that the Appellant wants the Tribunal to consider Appellant’s submissions to change the ruling. We do not think that this a good ground for review. This is why the Court of Appeal Civil Appeal No. 2111 of 1996, National Bank of Kenya Vs Ndungu Njau (supra) held that:-“the error or omission must be self-evidence and should not require an elaborate argument to be established.”

20. Even though the Appellant argues that the Tribunal did not consider its submissions, the Tribunal has considered the Appellant’s submissions dated 13th March 2023 and notes that the Tribunal would not have arrived at a different ruling.

21. The Tribunal in the Ruling dated 9th June 2023 stated as follows at paragraph 16 of the Ruling:-“Seeing that the Appellant did not file its submissions, the Tribunal relies on Grounds of Opposition to make out its case.’’ At paragraph 26, the Tribunal stated that: ‘‘the Tribunal finds that the Appellant will not be prejudiced as it will be afforded an opportunity to traverse and make adequate response to the augment fronted.”The Tribunal maintains that the Appellant was not prejudiced.

22. The reason advanced by the Appellant for failing to apply for review within 7 days as required under Section 29A of the Tax Appeals Tribunal Act is that the Appellant did not receive the Ruling on time. The Tribunal has examined an extract of email dated 14th June 2023 wherein the Appellant herein requested for a Ruling. The Appellant is not honest because the Appellant does not state when it finally got the Ruling. The Tribunal says so because the Notice of Motion was filed on 26th September 2023 over 3 months from the date of the impugned Ruling. The Notice of Motion was filed out of time and is available for dismissal.

23. It is therefore the Tribunal’s finding that the Appellant’s Notice of Motion filed on 26th September 2023 is an abuse of the processes of this Tribunal.

Disposition 24. In the circumstances, the Tribunal proceeds to make the following Orders:-i.That the Notice of motion dated 17th August 2023 and filed on 26th September 2023 lacks merit and is hereby dismissed.ii.No orders as to costs.

25. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 22ND DAY OF MARCH, 2024ERIC NYONGESA WAFULACHAIRMANELISHAH N. NJERUMEMBERMUTISO MAKAUMEMBEREUNICE N. NG’ANG’AMEMBERABRAHAM K. KIPTROTICHMEMBER