[2024] KETAT 1492 (KLR)

Hyper Ventures Limited v Commissioner of Domestic Taxes (Tax Appeal E884 of 2024) [2024] KETAT 1492 (KLR) (Commercial and Tax) (31 October 2024) (Ruling)

Neutral citation: [2024] KETAT 1492 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Commercial and Tax

Tax Appeal E884 of 2024

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

October 31, 2024

Between

Hyper Ventures Limited

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Applicant lodged an Notice of Motion Application under section 13 (3) and (4) of the Tax Appeals Tribunal Act, CAP 469A of the Laws of Kenya (hereinafter “TATA”) and Rule 10(4) of the Tax Appeals Tribunal (Procedure) Rules, 2015) dated and filed on 7th August 2024 seeking the following Orders:a.Spent.b.That this Tribunal grants the Applicant leave to file out of time, the Memorandum of Appeal in respect to the Commissioners objection decision dated 25th January 2023. c.That this Tribunal be pleased to issue any such orders as it deems just and expedient.d.That the costs of this application be in the cause.

Grounds for the Application 2. The Application is supported by the grounds set out in the annexed affidavit of Peter Kimani Kamau signed and filed on 7th August 2024 as follows:a.That the statutory timelines within which the Applicant is supposed to have submitted its Memorandum of Appeal has since lapsed. Noting the appeal was due on or before 15th February 2023. b.That the objection by the Respondent served electronically through the registered email with limited access by the Applicant.c.That the objection by the commissioner, did not consider the documents (schedule)provided as sufficient evidence to support allowable expenditures relating to salaries and wages, rather request payrolls and employment contracts as the only way the Applicant could have proven support on such expenditures.d.That the grounds of appeal present a strong basis for the Applicant's prayers to have the additional assessments set aside, since the Respondent assessments failed to consider significant and relevant documentation, information and provisions of law.e.That the Respondent will not suffer any prejudice if the orders sought herein are granted.f.That in the interest of justice and fairness, this Court should grant the orders sought and allow the hearing and determination of the substantive Appeal on merit.

Response to the Application 3. In response to the Application, the Respondent filed a response by Wambui Ng’ang’a and Audrey Nzia on 7th October 2024 stating grounds as follows:a.The Application is incompetent, bad in law, fatally defective and is an abuse of this Honourable Tribunal’s process.b.No credible reason has been advanced by the Applicant to warrant extension of time to file appeal as provided in Section 13(4) of the TATA.c.An Application of this nature requires an Applicant to prove his/her absence from Kenya, sickness or other reasonable cause.d.Equity aids the vigilant and not the indolent. The Applicant ought to have acted swiftly to preserve its rights. It is guilty of laches.e.The Application is an afterthought and a delay tactic by the Applicant meant to delay the conclusion of the matter, which holds substantial Government Revenue.f.The taxes demanded herein became due on confirmation of the assessments. They now continue to accrue interest and penalties as provided under the various tax laws as there is no valid Appeal before the Tribunal thus the Applicant ought to pay 50% on account to show commitment in the matter for the Tribunal to consider granting the orders sought.g.The Applicant has not demonstrated it deserves favourable discretion of this Honourable Tribunal and the Application should be dismissed with costs to the Respondent.

4. On 3rd October 2024, the application came before the Tribunal for hearing where the Applicant was absent, the Tribunal gave orders for the parties to file and serve on each other submissions on or before 14th October 2024 after which the matter would be on Ruling on Notice. Neither party filed its submissions.

Analysis And Findings 5. The authority to expand time for filing an appeal is donated by Section 13(3) of the TATA, which provides that:“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)”.

6. Further, section 13(4) of the TATA provides thus:“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.”

7. Rule 10 of the Tax Appeals Tribunal (Procedure) Rules reiterates the foregoing statutory provision in the following terms: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.”

8. The jurisprudence from the case of Leo Sila Mutiso vs Rose Hellen Wangari Mwangi, Civil Application Nai. 251 of 1997 is instructive, the court in the said case held as follows in determining whether to enlarge 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. Pursuant to the provisions of section 13 (4) of the TATA, the Tribunal in this Application will consider the principles set out in John Kuria v Kelen Wahito, Nairobi Civil Application Nai 19 of 1983 April 10, 1984 referred to by the judges in the case of Wasike V Swala [1984] KLR 591, Sammy Mwangi Kiriethe & 2 others v Kenya Commercial Bank Ltd (supra) and Section 13 of the Tax Appeals Tribunal Act, 2013 in establishing whether the Applicant deserved prayers sought:a.Whether there is a reasonable cause for the delay?b.Whether the appeal is merited?c.Whether the application for extension has been brought without undue delay?d.Whether there will be prejudice suffered by the Respondent if the extension is granted?”

10. Upon examination of the Applicant’s pleadings, the Tribunal has not found any reason advanced by the Applicant for the delay in the filing of its Appeal. This position has also been argued by the Respondent where it stated that an application of this nature requires an Applicant to prove his/her absence from Kenya, sickness or other reasonable cause.

11. Further, the Tribunal observed that the Applicant herein attached in support of its Application, a Memorandum of Appeal, Statement of Facts and an Assessment Order. In these, the Appellant seeks the Tribunal to set aside the Commissioner’s Assessment and though there is a claim of an objection being made to the Assessment, no objection decision has been filed.

12. The Tribunal notes that in the absence of an appealable decision, the Applicant lacks valid basis for a merited appeal.

13. Indeed, equity aids the vigilant and not the indolent. The Applicant ought to have acted swiftly to preserve its rights and is therefore guilty of laches.

14. In the absence of a valid reason for delay in filing its Appeal and there being no evidence of a merited appeal, the Tribunal is not persuaded to grant leave to the Applicant to file the Appeal out of time.

Disposition 15. The upshot of the foregoing is that the Tribunal finds that the Application fails and accordingly proceeds to make the following Orders:i.The Application be and is hereby dismissed.ii.No orders as to costs.

16. It is so Ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 31ST DAY OF OCTOBER, 2024. ………………………………….CHRISTINE A. MUGACHAIRPERSON………………………….. …………….……………..BONIFACE K. TERER ELISHAH N. NJERUMEMBER MEMBER…………..…………… ……………..…………….EUNICE N. NG’ANG’A OLOLCHIKE S. SPENCERMEMBER MEMBER