[2020] KEHC 9913 (KLR)
The court found that while the appellant is a reputable and regulated bank unlikely to default on its tax obligations, there remains a possibility that some taxes may ultimately be found due. To balance the interests of both parties, the court granted a stay of execution of the Tax Appeal Tribunal's decision on...
Source-derived case information.
- Citation
- [2020] KEHC 9913 (KLR)
- Parties
- Appellant: I & M Bank Limited; Respondent: Commissioner of Domestic Taxes
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Tax Appeal E034 of 2020
- Procedural Posture
- Tax Appeal / Ruling on Stay of Execution Pending Appeal
- Outcome
- Conditional stay of execution granted pending appeal.
- Legal Topics
- Stay of Execution, Security for Costs, Tax Appeals, Enforcement of Tribunal Decisions
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
I & M Bank Limited
Appellant
Commissioner of Domestic Taxes
Respondent
Procedural Posture
Tax Appeal / Ruling on Stay of Execution Pending Appeal
Legal Issues
- 1 What is the appropriate nature and extent of security to be offered by the appellant for stay of execution of the Tax Appeal Tribunal decision?.
- 2 Whether failure to order security would prejudice the respondent.
Ratio Decidendi
The court found that while the appellant is a reputable and regulated bank unlikely to default on its tax obligations, there remains a possibility that some taxes may ultimately be found due. To balance the interests of both parties, the court granted a stay of execution of the Tax Appeal Tribunal's decision on condition that the appellant pays Kshs. 40 million to the respondent within 14 days. The court was not convinced that failing to order security would prejudice the respondent, but considered it prudent to require partial payment as security for the respondent's interests.
Court Disposition
Conditional stay of execution granted pending appeal.
Orders
- The appellant shall pay to the respondent, the sum of Kshs. 40 million within 14 days.
- Mention on 03.08.2020 for directions on the appeal.
Full Case Text
Judgment text and source record
20 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL AND TAX DIVISION
CORAM: D.S. MAJANJA J.
TAX APPEAL NO. E034 OF 2020
BETWEEN
I & M BANK LIMITED.............................................................APPELLANT
AND
COMMISSIONER OF DOMESTIC TAXES.........................RESPONDENT
RULING
I have heard the submissions of the parties in respect the application dated 30th April 2020 seeking a stay of execution of the decision of the Tax Appeal Tribunal Appeal No. 72 of 2017 and consequent enforcement action. The only issue for determination is the nature and extent of the security to be offered by the appellant. The appellant is a well-known and regulated bank. It is a going concern and it is not likely that the Bank would fail to pay taxes that would be found due in the foreseeable future hence I am not convinced that failing to order security would prejudice the respondent.
However, I am convinced that some taxes may be ultimately found due therefore by balancing the positions of the appellant and respondent, I grant stay of execution of the judgment of the Tax Appeal Tribunal Appeal No. 72 of 2017 on the following terms;
1. The appellant shall pay to the respondent, the sum of Kshs. 40 million within 14 days.
2. Mention on 03. 08. 2020 for directions on the appeal.
DATED and DELIVERED at NAIROBI this 17th day of JULY 2020.
D. S. MAJANJA
JUDGE
Mr Ndungu instructed by Coulson Harney LLP Advocates for the appellant.
Mr Chabala, Advocate instructed by Kenya Revenue Authority for the Commissioner of Domestic Taxes.