https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6951

Commissioner of Domestic Taxes v Safaricom PLC (Miscellaneous Application E863 of 2025) [2026] KEHC 6951 (KLR) (Commercial and Tax) (14 May 2026) (Ruling) Neutral citation: [2026] KEHC 6951 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Application E863 of 2025 MA Otieno, J May 14, 2026 Between Commissioner of Domestic Taxes Applicant and Safaricom PLC Respondent Ruling Introduction 1.This Ruling determines the Notice of Motion application dated 25th August 2025 brought by the Commissioner of Domestic Taxes (the Applicant). The Applicant seeks leave to file an appeal out of time against the judgment of the Tax Appeals Tribunal (the Tribunal) delivered on 17th December 2024. 2.In the alternative, the Applicant prays that the appeal documents already on record be deemed as properly filed. 3.The application is supported by the affidavit of Hellen Wairimu Njoroge, sworn on the same date, and is premised on the grounds that the delay in filing the Notice of Appeal was minimal, being only four (4) days. 4.The Respondent, Safaricom PLC, opposes the application through Grounds of Opposition dated 11th September 2025. The Respondent’s primary contention is that the matter is res judicata and that the Court is functus officio, following a ruling delivered by this Court (Andayi, J.) on 21st August 2025, which struck out the Applicant’s previous appeal (HCITA No. E029 of 2025). 5.The Application was canvassed by way of written submissions. The Applicant filed its submissions dated 25th August 2025, whilst the Respondent’s submissions are dated 24th November 2025. Analysis and Determination 6.Having considered the pleadings and the rival submissions on record, the Court finds the following issues as emerging for determination:i.Whether the application is barred by the doctrine of res judicata.ii.Whether the Applicant has met the threshold for the grant of leave to file an appeal out of time. 7.Before delving into the issues, the Court finds it necessary to first set out the background of this dispute. 8.The genesis of this matter is a Judgment of the Tax Appeals Tribunal (hereinafter "the Tribunal") delivered on 17th December 2024 in TAT Appeal No. E826 of 2023: Safaricom PLC v Commissioner of Domestic Taxes. In that dispute, the Tribunal rendered a decision in favor of the Respondent, prompting the Appellant/Applicant (hereinafter "the Commissioner") to seek appellate review before this Court. 9.Aggrieved by the Tribunal’s decision, the Commissioner initiated the appellate process by filing a Notice of Appeal on 4th February 2025, which was subsequently followed by the filing of a Memorandum of Appeal in HCITA No. E029 of 2025. 10.Upon being served with the appeal, the Respondent raised a Preliminary Objection dated 5th March 2025. The core of the objection was that the appeal was procedurally incompetent, having been filed outside the 30-day statutory period prescribed under Section 13(2) of the Tax Appeals Tribunal Act. It was the Respondent’s contention that the deadline for filing the appeal was 31st January 2025, and as the Notice of Appeal was filed on 4th February 2025, the appeal was four (4) days late and lacked the prerequisite leave of the Court. 11.The Preliminary Objection was heard by this Court (Andayi, J.), who, in a Ruling delivered on 21st August 2025, upheld the Respondent's objection. The Court found that the appeal was indeed filed out of time without leave. Consequently, the Court struck out the appeal for being improperly before the Court, observing that the mandatory statutory timelines for tax appeals must be strictly adhered to unless an extension is sought and granted. 12.Following the striking out of the initial appeal, the Commissioner filed the present appeal, seeking leave to file the appeal out of time, or in the alternative, that the documents already on record be deemed as properly filed, an application opposed by the Respondent, on the grounds that the matter is res judicata, and that no sufficient cause has been shown by the Applicant to warrant the extension leave sought. Whether the Application is Res Judicata 13.The Respondent has raised a preliminary objection that the present application is res judicata on account of this Court (Andayi J) having already determined, in the ruling delivered on 21 August 2025, which struck out HCITA No. E029 of 2025, for being filed out of time without leave. 14.Reliance was placed on, among others, the decision in Independent Electoral & Boundaries Commission v Maina Kiai & 5 Others [2017] eKLR, and Section 7 of the Civil Procedure Act, which espouses finality in litigation. The Respondent maintained that the Applicant cannot now purport, as it does in the present application, to seek that same leave since the question of admissibility and competence of the appeal had been finally and conclusively determined. 15.According to the Respondent, the Applicant’s only lawful recourse following the ruling of 21st August 2025 was to appeal against that ruling and not to institute what amounts to a fresh attempt to revive a struck-out appeal. 16.The Applicant, in response to the preliminary objection, argued that the present application is not barred by the doctrine of res judicata because the earlier ruling merely struck out the appeal on procedural grounds and did not determine either the merits of the substantive tax dispute or the merits of an application for extension of time. 17.Citing the decision in Enock Kirao Muhanji v Hamid Abdalla Mbarak [2013] eKLR, the Applicant asserted that where a matter is struck out on procedural grounds without determination on merits, a subsequent proceeding is not barred by res judicata. 18.The doctrine of res judicata is codified under Section 7 of the Civil Procedure Act, which provides that:“No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of the claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.” 19.The elements of the res judicata doctrine in civil cases have been authoritatively laid down by the Supreme Court in several cases, including John Florence Maritime Services Ltd & another v Cabinet Secretary Transport & Infrastructure & 3 others [2021] KESC 39 (KLR), where the Court was clear that for res judicata to be invoked in a civil matter, the following elements must be demonstrated:a.There is a former judgment or order which was final;b.The judgment or order was on merit;c.The judgment or order was rendered by a court having jurisdiction over the subject matter and the parties; andd.There must be between the first and the second action identical parties, subject matter and cause of action. 20.More recently, in Dina Management Ltd v County Government of Mombasa & 5 others [2023] KESC 30 (KLR), the Supreme Court emphasized that res judicata serves the public interest in ensuring finality in litigation and preventing abuse of the court process. The Court was clear that:“The doctrine of res judicata is founded on public policy and is aimed at achieving two objectives namely, that there must be finality to litigation and that the individual should not be harassed twice with the same account of litigation.” 21.It therefore follows that for a party to successfully plead res judicata, it must demonstrate the identity of issues, parties, title, final determination, and competence of the earlier court. 22.In the present case, there is no dispute that the parties herein are the same parties that were before the Court in HCITA No. E029 of 2025. There is equally no dispute that this Court had jurisdiction to determine the Preliminary Objection that culminated in the ruling delivered on 21st August 2025. 23.The critical question, however, is whether the issue presently before the Court was heard and finally determined in the previous proceedings. 24.From the material on record, this Court notes that the ruling of 21st August 2025 determined that the Notice of Appeal had been filed out of time and without leave, rendering the appeal incompetent. The Court consequently struck out the appeal. 25.The Court further notes that the ruling of 21st August 2025 did not determine the merits of an application for extension of time because no such application had been placed before it for determination. It expressly identified that no such application had been filed. 26.It is a well-settled principle of law that striking out a suit or an appeal for being procedurally incompetent, such as for lack of leave, does not constitute a determination on the merits. The striking out of an appeal for want of leave places the parties back in the position they were in before the incompetent document was filed. 27.In Enock Kirao Muhanji v Hamid Abdalla Mbarak [2013] eKLR, the Court held that where a suit is disposed of on procedural grounds without substantive determination of the issues in controversy, a subsequent proceeding may not necessarily be barred by res judicata. 28.Similarly, in the present case, the Court merely determined the competency of the already filed appeal. It did not consider whether sufficient cause existed for extension of time to file an appeal out of time. 29.Consequently, I am not persuaded that the present application is barred by the doctrine of res judicata. Whether the Applicant has met the threshold for the grant of leave 30.The principles governing extension of time are well settled. In Nicholas Kiptoo Arap Korir Salat v IEBC & 7 Others [2014] eKLR, the Supreme Court held that extension of time is an equitable remedy to be granted at the discretion of the Court upon consideration of factors such as the length of delay, reason for delay, prejudice to the respondent and the overall interests of justice. 31.In tax matters, Section 32(1) of the Tax Appeals Tribunal Act, as read together with Rule 3 of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015 (“the Rules”), provides that an appellant shall, within thirty days, after the date of service of a notice of appeal under section 32(1). 32.Rule 4 of the Tax Appeal – Appeals to the High Court Rules (supra) provides for the extension of time specified under Rule 3, where the Court, on application, is satisfied that “owing to absence from Kenya, sickness, or other reasonable cause, the appellant was unable to file the memorandum of appeal within that period and that there has been no unreasonable delay on the part of the appellant.” 33.In Commissioner of Investigations & Enforcement v Ahmed [2021] KEHC 10 (KLR), Majanja J, while allowing the Commissioner’s application for extension of time under Rule 4, stated that:“Under Rule 4 of the Rules, the court must be satisfied that there is reasonable cause to grant the extension of time. In this case, the Commissioner filed the Notice of Appeal within time. It has explained that that reason it filed the Memorandum and Record of Appeal late was because of the illness by its counsel and that it mistook the date on the ground that date affixed on the receipt stamp was 16th June 2021. This is supported by the evidence and is a reasonable explanation for the delay of 3 days in filing the appeal. While the Commissioner did not produce evidence of it counsel’s illness, I am willing to give it the benefit of doubt given that every effort was made to file the appeal and when the misstate was realised, the application for condonation was filed in short order. Lastly, I do not think that the Commissioner should be punished the mistake or inadvertence of its counsel on record.This is case where the Commissioner should be allowed to exercise its statutory right of appeal hence any prejudice that would be occasioned on the Respondent would be assuaged by an order for costs. The Record of Appeal which contains the Memorandum of Appeal has now been filed and served.” 34.In First American Bank of Kenya Ltd v Gulab P Shah & 2 Others [2002] 1 EA 65, the court emphasized that the discretion to extend time is intended to avoid injustice or hardship resulting from accident, inadvertence, or excusable error, but not to assist a party who has deliberately sought to obstruct or delay the course of justice. 35.Regarding the delay, the Court notes that the judgment was delivered on 17th December 2024. The Notice of Appeal was filed on 4th February 2025, while the deadline (30 days) was 31st January 2025. This is a delay of four (4) days. 36.The explanation tendered by the Applicant is that counsel genuinely believed that the Christmas recess and public holidays stood excluded in the computation of time pursuant to Order 50 Rule 4 of the Civil Procedure Rules. 37.While ignorance or misapprehension of the law is generally not a sufficient excuse, the Court considers a delay of four (4) days not inordinate. Further, it is not disputed that the Applicant moved the Court promptly after delivery of the ruling striking out the appeal. 38.On the likely prejudice, the Respondent has not demonstrated any specific prejudice that cannot be compensated by costs. The argument by the Respondent that it is “entitled to enjoy the fruits of the judgment delivered in its favour, and any further delay in the finality of the matter would undermine the principle of certainty in litigation,” though sound, cannot outweigh the need to have disputes, particularly tax disputes, to be determined on their merits. 39.In Achievo Limited v Commissioner, Legal Services & Board Coordination (KRA) [2026] KEHC 5319 (KLR), this Court, in granting leave for an appeal outside the statutory timelines, in a substantially similar application, previously stated as follows:“Finally, public interest militates in favour of granting the extension. The dispute involves the interpretation of Section 13(5) of the Value Added Tax Act, and therefore, transcends the immediate interests of the parties and raises broader questions regarding the administration of VAT, particularly the treatment of reimbursements under the statute…..In such circumstances, the Court is enjoined to lean towards sustaining, rather than extinguishing a litigant’s right to be heard on appeal.” 40.Article 159(2)(d) of the Constitution of Kenya mandates that justice shall be administered without undue regard to procedural technicalities. This is particularly germane in tax disputes involving substantial revenue and complex points of law, where the public interest is best served by a determination on the merits. In Branch International Limited & another v Commissioner of Domestic Taxes & another [2026] KEHC 5381 (KLR), this Court stated that;“In tax litigation, courts should be slow to invalidate decisions on purely technical or procedural grounds, leaving the substance of the dispute unaddressed. This is in line with the command given under Article 159(2)(d) and Article 259 of the Constitution, which applies to all statutes, tax statutes included…” 41.The Court has perused the application and notes that the primary dispute in the present case relates to a tax assessment in excess of Kshs. 400 million, on account of the Respondent’s seconded employees. The Applicant’s intended appeal on the question whether, for tax purposes, there indeed exists an employer-employee relationship between the Respondent and its seconded employees is one which is best determined on merit. 42.A secondary point of opposition raised by the Respondent is that the Applicant’s Notice of Motion is procedurally defective for failing to annex a draft Memorandum of Appeal. The Respondent contends that without the intended grounds of appeal, the Court is unable to assess whether the intended appeal is merited or if it raises triable issues. 43.The Court agrees with the Respondent’s submissions. A draft memorandum of appeal would obviously enable the Court to exercise its discretion informed by the nature and weight of the challenge against the impugned decision. However, in the present case, although no draft memorandum of appeal was annexed, the Applicant has set out, in its supporting affidavit and submissions, the nature of the dispute and the basis upon which it challenges the decision of the Tax Appeals Tribunal. 44.Further, as established in the background, the Commissioner had previously filed a full Memorandum of Appeal in HCITA No. E029 of 2025, which was served upon the Respondent and was the subject of the striking-out orders. The grounds upon which the Commissioner seeks to challenge the Tribunal’s decision are already within the knowledge of the Respondent and form part of the wider record of the dispute between these parties. 45.Further, this Court has already observed that the dispute involves a claim in excess of Kshs. 400 million, a matter that is prima facie weighty and not frivolous. The issues arising therefrom cannot be said to be idle or unarguable merely because a draft memorandum was not exhibited. 46.In Nicholas Kiptoo Arap Salat v IEBC & 7 Others [2014] eKLR, the Supreme Court underscored that extension of time is an equitable remedy to be determined on a case-by-case basis, guided by the interests of justice rather than rigid procedural requirements. The Court did not elevate the annexing of a draft memorandum to a mandatory statutory requirement. 47.The upshot of the foregoing is that the Court is satisfied that the Applicant has laid a sufficient basis for enlargement of time. 48.Finally, the Applicant seeks validation of the Notice of Appeal, Memorandum of Appeal, and Record of Appeal already filed. However, the Supreme Court in Nicholas Salat (supra) cautioned that a party ought not to file an incompetent appeal first and thereafter seek to legalize it through extension of time. The Court was clear that:“Where one intends to file an appeal out of time and seeks extension of time, the much he can do is to annex the draft intended petition of appeal for the court’s perusal when making his application for extension of time; and not to file an appeal and seek to legalize it.” 49.Guided by the above decision, the proper course, therefore, is to grant leave to file the appeal out of time rather than deeming the previously struck-out pleadings as properly filed. 50.In the result, the Notice of Motion dated 25th August 2025 succeeds to the following extent:i.The Applicant is hereby granted leave to file an Appeal out of time against the Judgment of the Tax Appeals Tribunal delivered on 17th December 2024 in TAT Appeal No. E826 of 2023.ii.The Memorandum of Appeal and the Notice of Appeal shall be filed and served within fourteen (14) days from the date of this Ruling.iii.Costs of the application is hereby awarded to the Respondent. 51.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 14TH DAY OF MAY 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURTIn the Presence of:Moses C/ANjoroge…………………for the ApplicantKingori………………………for the Respondent