[2009] KEHC 1127 (KLR)
The court found that while it is necessary to protect the respondent's interest and the public revenue by requiring security for stay, the initial sum of Ksh.100 million was disproportionate given that the entire tax assessment was under challenge and the applicant had demonstrated no intention to delay proceedings....
Source-derived case information.
- Citation
- [2009] KEHC 1127 (KLR)
- Parties
- Applicant: Equators Bottlers Limited; Respondent: The Commissioner General, Kenya Revenue Authority
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Miscellaneous Application 779 of 2009
- Procedural Posture
- Miscellaneous Application / Ruling on Application to Review Security for Stay
- Outcome
- Application for review of security condition allowed in part.
- Judges
- FI Koome
- Legal Topics
- Security for Stay, Tax Assessment Dispute, Judicial Review, Public Interest in Taxation
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Equators Bottlers Limited
Applicant
The Commissioner General, Kenya Revenue Authority
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Application to Review Security for Stay
Legal Issues
- 1 Whether the condition requiring the applicant to deposit Ksh.100 million as security for stay was disproportionate.
- 2 Whether the court should review and vary the security condition in light of the pending constitutional review and the applicant's conduct.
Ratio Decidendi
The court found that while it is necessary to protect the respondent's interest and the public revenue by requiring security for stay, the initial sum of Ksh.100 million was disproportionate given that the entire tax assessment was under challenge and the applicant had demonstrated no intention to delay proceedings. The court exercised its discretion to substitute the cash deposit with an insurance guarantee of Ksh.30 million, to be executed in favor of the Registrar of the High Court within seven days, as adequate security pending determination of the constitutional review application.
Court Disposition
Application for review of security condition allowed in part.
Orders
- The order of 10th September 2009 is reviewed and substituted with a stay of proceedings subject to the applicant depositing an insurance guarantee in the sum of Ksh.30 million.
- The guarantee shall be executed in favor of the Registrar of the High Court within seven days.
Full Case Text
Judgment text and source record
17 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI (MILIMANI COMMERCIAL COURTS)
Miscellaneous Civil Application 779 of 2009
EQUATORS BOTTLERS LIMITED ...................................... APPLICANT
VERSUS
THE COMMISSIONER GENERAL
KENYA REVENUE AUTHORITY ......................................... RESPONDENT
RULING
The applicant filed the Constitutional Review Application seeking for leave to operate as a stay. This court considered the exparte application on 10th September 2009 and in my exercise of discretion granted leave on condition that the applicant will deposit a sum of Ksh.100 million. The applicant has now applied for the review of the condition that they should deposit a sum of Ksh.100 million on two grounds. Firstly it was submitted the amount is disproportionate because the entire imposition of the taxes is challenged.
Secondly, the matter is fixed for hearing before the Constitutional Court on 11th November 2009, and the applicant does not intend to delay the matter.
This application is opposed; I have considered the arguments by counsel for the respondent. The reasons why the court in its own discretion imposed the condition was to ensure the applicant does not enjoy the order of stay indefinitely while also considering the matter involves a colossal sum of money demanded by the respondent as taxes and the fact that taxation is a matter of utmost public interest for the proper functioning of the Government.
I have taken into account that the suit is now scheduled for hearing on 11th November 2009 before the Constitutional Court, the applicant has also shown they do not wish to employ delaying tactics, accordingly, I hereby exercise my discretion and review the order of 10th September 2009 and substitute it with a stay of proceedings subject to the applicant depositing an insurance guarantee in the sum of Kenya shillings Thirty million (30 million). That guarantee should be executed in favor of the Registrar of the High Court within seven (7) days. The sum shall remain as security until the determination of the Constitutional review application.
Costs of this application shall be in the cause. This file be returned to the Constitutional Judicial Review Division.
RULING READ AND SIGNED ON 27TH OCTOBER 2009 AT NAIROBI.
M.K. KOOME
JUDGE