[2024] KETAT 1732 (KLR)

Bitutech Limited v Commissioner of Customs & Border Control (Tax Appeal E1224 of 2024) [2024] KETAT 1732 (KLR) (11 December 2024) (Ruling)

Neutral citation: [2024] KETAT 1732 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E1224 of 2024

CA Muga, Chair, EN Njeru, E Ng'ang'a & SS Ololchike, Members

December 11, 2024

Between

Bitutech Limited

Applicant

and

Commissioner of Customs & Border Control

Respondent

Ruling

1. The Applicant moved this Tribunal vide a Notice of Motion dated 25th October 2024 and filed on even date seeking the following Orders:i.That this Tribunal be pleased to extend time within which the Applicant is to lodge its Appeal against the review decision of the Respondent dated 6th December 2023. ii.That this Tribunal be pleased to extend the time within which the Applicant is to lodge its Notice of Appeal against the review decision of the Respondent dated 6th December 2023. iii.That the draft Memorandum of Appeal, Statements of Facts and supporting documents attached hereto be deemed as duly lodged and served.iv.That the Notice of Appeal attached hereto be deemed duly lodged and served.

2. The Application is supported by an Affidavit sworn by the Applicant’s Director, Mr. Dimosthenis Lalagiannis, on 22nd October 2024 based on the following grounds:i.The Respondent issued its objection decision on 6th December 2023. ii.The Appellant’s sole director was ill at the time when the decision was issued and went on sick leave.iii.That upon recovery, the Respondent’s principal officer instructed the Appellant’s tax agents to lodge an appeal to this Tribunal.iv.That the Applicant has approached this Tribunal without inordinate delay.v.That the Applicant stands to suffer substantial harm if this application is not allowed.vi.That it is in the interest of justice and fair hearing that this application be allowed.vii.That Respondent will not suffer any harm if the timeline for lodging the appeal or notice of appeal is enlarged.viii.That the Respondent will not suffer any tax loss if this application is allowed as the Ruling pertaining to this Application will not.

3. The Respondent upon being served with the instant application did not file any response and the Application is therefore deemed to be unopposed.

Analysis And Findings 4. This Application for determination before the Tribunal is seeking leave to appeal out of time. Section 13(3) of the Tax Appeals Tribunal Act, CAP 469A of the Laws of Kenya (hereinafter “TATA”) donates the power to enlarge time for filing an appeal. It provides as follows:“The Tribunal may, upon application in writing, extend the time for filing the Notice of Appeal and for submitting the documents referred to in subsection (2)”.

5. Section 13(4) of TATA is key to this Application and provides as follows:‘‘An extension under subsection (3) may be granted owing to absence from Kenya, or sickness, or other reasonable cause that may have prevented the applicant from filing the notice of appeal or submitting the documents within the specified period.’’

6. Rule 10 of the Tax Appeals Tribunal (Procedure) Rules, 2015 provides as follows:3. The Tribunal may grant the extension of time if it is satisfied that the Applicant was unable to submit the documents in time for the following reasons –a.Absence from Kenya;b.Sickness; orc.Any other reasonable cause.”

7. The Supreme Court in Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] eKLR set out general considerations to guide courts in exercising discretion in cases of this nature. The Apex Court guided as follows:i.Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party at the discretion of the court;ii.A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the court;iii.Whether the court should exercise the discretion to extend time, is a consideration to be made on a case-to-case basis;iv.Whether there is a reasonable reason for the delay. The delay should be explained to the satisfaction of the court;v.Whether there will be any prejudice suffered by the respondents if the extension is granted;vi.Whether the application has been brought without undue delay; andvii.Whether in certain cases, like election petitions, public interest should be a consideration for extending time."

8. In the case of Leo Sila Mutiso vs Rose Hellen Wangari Mwangi, Civil Application No. 251 of 1997 it was held as follows in relation to Applications for enlargement of time:“It is now settled that the decision whether to extend the time for appealing is essentially discretionary. It is also well stated 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.”

9. Further, the Court in Wasike v Swala [1984] KLR 591 provided the hierarchy of the factors to consider when considering applications for enlargement of time for filing an appeal. The Court stated as follows:“An applicant must now show, in descending scale of importance, the following factors: -a.That there is merit in his appeal.b.That the extension of time to institute and/or file the appeal will not cause undue prejudice to the respondent; andc.That the delay has not been inordinate.”

10. In determining this application, the Tribunal analyses the provisions of Section 13 (4) of TATA, principles as set in Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] e KLR, Leo Sila Mutiso v Rose Hellen Wangari Mwangi, Civil Application No. 251 of 1997 and Wasike v Swala [1984] KLR 591. The principles are analyzed in light of the Applicant’s application as outlined below:a.Whether there is a reasonable cause for the delay

11. While dealing with the reasonable cause, the Court in National Union of Mineworkers v Council for Mineral Technology [1998] ZALAC 22, the court at paragraph 10 stated as follows:‘‘…There is a further principle which is applied and that is that without a reasonable and acceptable explanation for the delay, the prospects of success are immaterial, and without prospects of success, no matter how good the explanation for the delay, an application for condonation should be refused.”

12. The Applicant stated that at the point when the decision was issued by the Respondent, its Director fell ill, went on sick leave and was therefore unable to revert due to his ill health. The Tribunal upon perusal of the documents provided therein sighted a medical report dated 16th October 2024 from Ngara Comprehensive Health in support of the Applicant’s claim of its Director’s illness. The report indicated that the its Director had been receiving treatment since 6th January 2024 from a traumatic back injury and was to be on complete bed rest.

13. The Tribunal having reviewed the report finds that the reason advanced by the Applicant comply with those provided for under the law and the period of delay being accounted for is therefore reasonable to warrant the intervention by the Tribunal and Consequently, there was a reasonable cause for delay.b.Whether the delay was inordinate.

14. The Tribunal notes that it has been held in multiple case laws that leave to file appeal out of time may be granted even when the delay is inordinate provided that the delay is explained to the satisfaction of the Tribunal. In Joseph Odide Walome v David Mbadi Akello [2022] eKLR the Court held as follows:“Where a party is aggrieved and wishes to pursue an appeal, it would be fair to exercise discretion in his favour and especially where the delay in filing the appeal is not inordinate or even if the delay is inordinate, it is explained to the satisfaction of the court and the adverse party will not be prejudiced in any way.”

15. The Tribunal finds that there was inordinate delay in filing of the Appeal but that however, the delay was occasioned by the illness of the Applicant’s sole director. In view of the fact that there was no other person authorized to make the decision to file an Appeal in his absence. Section 13 (4) of the TATA recognizes illness as a ground on which A filing timeline can be extended. The Tribunal finds that there was inordinate delay but that explanation by the Applicant on the cause of the inordinate delay was satisfactory.c.Whether there is merit in this appeal

16. In the case of Wasike v Swala [1984] KLR 591 (supra) the Court stated that it is important to find out whether the intended appeal has merit. Further, In Samuel Mwaura Muthumbi v Josephine Wanjiru Ngungi & Another (2018) eKLR the court stated as follows:“Looking at the draft Memorandum of Appeal filed, I am unable to say that the intended Appeal is in arguable. Of course, all the Applicants have to show at this stage is arguability- not high probability of success. At this point the Applicant is not required to persuade the Appellate court that the intended or filed appeal has a high probability of success. All one is required to demonstrate is the arguability of the Appeal, a demonstration that the Applicant has plausible grounds of either facts or law to overturn the original verdict. The Applicants have easily met that standard. I believe that the Applicant has discharged this burden.”

17. Further, in the case of Stanley Kangethe Kinyanjui v Tony Keter and others (2013) eKLR, the Court held as follows about the arguability of an Appeal:“On whether the appeal is arguable, it is sufficient if a single bonafide ground of appeal is raised, an arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court: one which is not frivolous.”

18. The Tribunal notes that the six grounds raised by the Applicant in the Memorandum of Appeal raise pertinent issues that form a basis of an appeal.Accordingly, it is the Tribunal’s finding that the Applicant has an arguable case.d.Whether the Respondent will be prejudiced if time is enlarged.

19. The Tribunal will not proceed to evaluate whether the Respondent would be prejudiced if the Application is allowed. The Supreme Court in Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] eKLR (supra). Further, in Edith Gichungu Koine v Stephen Njagi Thoithi [2014] eKLR the court held that, “…the degree of prejudice to Respondent if the application is granted should be considered.”

20. The Tribunal finds that the only just recourse available to the Applicant lies in an appeal to the Tribunal and that the Applicant would be greatly prejudiced if its prayers are not granted.

21. Consequently, the Tribunal finds in favour of the Applicant.

Disposition 22. In the circumstances, the Application is merited and the Tribunal proceeds to make the following Orders:a.The Applicant be and is hereby granted leave to file its Appeal out of time.b.Applicant’s Notice of Appeal, Memorandum of Appeal and Statement of Facts dated 25th October 2024 and filed on even date and documents attached thereto be and are hereby deemed as properly filed and served.c.The Respondent be at liberty to file and serve its response to the Appeal within thirty (30) days of the delivery of this Ruling.d.Each party to bear its own costs.

23. It is so Ordered.

DATED AND DELIVERED AT NAIROBI THIS 11TH DAY OF DECEMBER, 2024. ………………………………….CHRISTINE A. MUGACHAIRPERSON………………………….. …………….……………..ELISHAH N. NJERU EUNICE N. NG’ANG’AMEMBER MEMBER……………..…………….OLOLCHIKE S. SPENCERMEMBER