[2023] KETAT 244 (KLR)

Doshi & Co (Hardware) Limited v Commissioner of Customs & Border Control (Tax Appeal 169 of 2019) [2023] KETAT 244 (KLR) (31 March 2023) (Ruling)

Neutral citation: [2023] KETAT 244 (KLR)

Republic of Kenya

In the Tax Appeals Tribunal

Tax Appeal 169 of 2019

E.N Wafula, Chair, Cynthia B. Mayaka & A.K Kiprotich, Members

March 31, 2023

Between

Doshi & Co (Hardware) Limited

Appellant

and

Commissioner of Customs & Border Control

Respondent

Ruling

1. The Applicant vide a Notice of Motion application dated the 22nd day of September, 2022 and filed under a certificate of urgency on the same date sought for the following Orders:-a.Spentb.That leave be granted by this Honourable Tribunal to file this application for reinstatement out of time.c.That this Honourable Tribunal be pleased to set aside the order issued on March 16, 2021 dismissing the Applicant/Appellant’s Appeal.d.That the Applicant’s Appeal No 169 of 2019 Doshi & Co (Hardware) Limited v Commissioner Customs & Border Control filed before this Honourable Tribunal be reinstated.

2. The application which is supported by an Affidavit sworn by Milan Doshi, a Director of the Applicant, on the 21st day of September, 2022 is premised on the following grounds:-a.That the Applicant deals in the business of importation, manufacturing, trading and distribution of building and construction materials.b.That the Applicant and the Respondent were embroiled in a tax dispute regarding the reclassification of its imported steel by the Respondent which attracted extra custom duties and taxes totaling Kshs.3,265,571. 00 which the Applicant paid under protest.c.The Respondent vide a letter dated 1February 5, 2019 informed the Appellant that the declared tariff 7216. 31. 90 was incorrect and that the correct code was 7216. 69. 00 which attracted a duty rate of 25%.d.That the Applicant appealed the decision to this Honourable Tribunal and filed the appeal documents on April 25, 2019 through its Director, Nilesh Doshi.e.That being the director of the Applicant, the said Nilesh Doshi was conversant with the facts and duly competent to institute the Appeal on behalf of the Applicant.f.That the Respondent put in their response to the Appeal on the 24th of May, 2019, the Applicant then subsequently filed its written submissions on July 3, 2019 with the intention of having its matter litigated to conclusion.g.That before the matter was finalized, Nilesh Doshi, the Applicant’s Director through whom the Appeal was filed unfortunately passed away on January 6, 2021. That understandably, the company’s activities grinded to a halt to mourn the untimely demise of the director.h.That in the months leading up to his death, the director’s health was pretty touch and go as he was ailing. That consequently, the director turned his focus on his health and strive for recovery. That unfortunately this did not pan out as he planned.i.That it should similarly be noted that his death occurred in the height of the Covid-19 pandemic. That understandably, owing to the travel restrictions in place, the company had all but shut its offices. That this coupled with the death of the director in question, the company was left in a state of disarray.j.That it was due to this fact that the Applicant missed a couple of its mentions before this Honourable Tribunal resulting in the matter being dismissed for want of prosecution.k.That upon resumption of normal operations, the company began to work on a succession structure and handing over of all matter handled by the deceased. It was upon discovery of the dismissal of the matter that the Applicant engaged the services of a tax agent.l.That the Applicant does indeed have an arguable case with a high chance of success.m.That it is therefore crucial for the ends of justice to be met that the Applicant’s Appeal No 169 of 2019 be reinstated to enable the proper and formal conclusion of the matter by this Honourable Tribunal.n.That this is especially so bearing in mind that the Applicant had already made payments of the demanded tax under protest. That consequently, the refund of the aforementioned amount is dependant of the decision in Appeal No. 169 of 2019 further reinforcing the need for reinstating of the Appeal.o.That the Applicant therefore stands at risk of suffering insurmountable losses should be orders sought for not be granted.p.That the Respondent in turn, will not suffer ay prejudice should the application herein be allowed.

3. The Respondent in reply to the application filed a Replying Affidavit sworn by Philip Odhiambo Odhong, an officer of the Respondent, on the 29th day of September, 2022 and filed on the same date and in which the Respondent raised the following grounds in opposition to the application:-a.That the Respondent in response to the Appeal filed its Statement of Facts on May 24, 2019. b.That the Respondent filed a Witness Statement on January 21, 2021. c.That the matter was then fixed for hearing on March 16, 2021d.That under Rule 18 of the Tax Appeals Tribunal (Procedures) Rules, 2015, the Tribunal can dismiss an appeal when the same comes up for hearing if there is no attendance by the Appellant and there is evidence the hearing notice was duly served.e.That the Appeal was dismissed for want of prosecution as there was no reasonable explanation why the Appellant failed to appear.f.That there is no evidence attached to corroborate the fact that the said Nilesh Doshi passed away on the said January 6, 2021 or that he had fallen ill.g.That the Applicant, has been indolent in bringing the application and that there is inordinate delay in bringing the application that has not been reasonably explained.h.That for the Honourable Tribunal to exercise discretion and allow the application as prayed there has to be a reasonable explanation for the reinstatement of the Appeal supported by evidence and that which the Applicant has failed to discharge.i.That in an application seeking reinstatement of appeal, a balance has to be created between the right of the Appellant and that of the Respondent.j.That with no evidence on record to support the application, the balance ought to shift in favour of the Respondent as it will suffer prejudice should the said Appeal be reinstated.k.That the application lacks merit and ought to be dismissed with costs to the Respondent.

Analysis and Findings 4. The Tribunal has noted that the Notice of Appeal and the appeal documents were all drawn and filed on behalf of the Appellant by its director, namely Nilesh Doshi.

5. The Appellant’s aforesaid Director evinced an intention to prosecute the Appeal on behalf of the Appellant by filing written submissions dated and filed on the July 3, 2019.

6. The Appellant’s aforesaid Director equally appeared on behalf of the Appellant before the Tribunal on the September 9, 2020 when the Tribunal confirmed the filing of written submissions on behalf of the Appellant and directed the parties to file any witness statements in the matter.

7. The Tribunal subsequently fixed the matter for hearing on the April 15, 2021 but the hearing date was brought forward to the March 16, 2021. There was an e-mail forwarded to the parties on the March 1, 2021, informing the parties on the change of the hearing date and the reason precipitating in such a change.

8. When the matter came up for hearing on the March 16, 2021 in the presence of the Respondent who had its witness present and ready to proceed the Tribunal caused the matter to be dismissed for want of prosecution in the absence of the Appellant.

9. The Appellant has since offered the reason for the failure to have a representative attend the hearing on its part on the March 16, 2021.

10. It is not in dispute that the Appellant’s director, Nilesh Doshi, was the principal officer for the Respondent that caused the Appeal to be filed and was manifestly behind the prosecution of the Appeal.

11. With the Appellant having filed its written submissions upon intimation to the Tribunal that it wished to prosecute the Appeal by way of written submissions the Tribunal in introspect is of the view that the Appellant had taken an appropriate step in the prosecution of the Appeal and its absence notwithstanding the Tribunal ought to have let the Respondent in the circumstances advance its case in opposition in its own manner and style. The Tribunal would have subsequently determined the Appeal on its merits taking into consideration the written submissions filed by the Appellant and the otherwise viva voche evidence that would have been adduced by the Respondent’s witness and any written submissions that would have been filed on behalf of the Respondent.

12. The Tribunal has infact since adopted the best practice by Tribunals of its ilk in determining appeals on the basis of the materials as placed before the Tribunal by the parties and without any undue demand requiring the parties to attend the proceedings before the Tribunal.

13. The Tribunal finds that the explanation offered by the Applicant for the failure to attend the hearing of the Appeal and for the cause for the delay in the filing of the application for the reinstatement of the Appeal was plausible and reasonable.

Disposition 14. The Tribunal on the basis of the foregoing analysis proceeds to make the following orders:-a.The appeal herein be and is hereby reinstated.b.The matter is hereby fixed for Mention on April 13, 2023 for the purposes of taking any further necessary pre-trial directions and fixing of the matter for hearing.c.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF MARCH, 2023. ................ERIC N. WAFULACHAIRMAN................CYNTHIA B. MAYAKAMEMBER................ABRAHAM K. KIPROTICHMEMBER MEMBER