[2024] KETAT 1033 (KLR)

Ikonia Resort & Hotels Limited v Commissioner of Domestic Taxes (Miscellaneous Application E032 of 2024) [2024] KETAT 1033 (KLR) (5 July 2024) (Ruling)

Neutral citation: [2024] KETAT 1033 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Application E032 of 2024

E.N Wafula, Chair, M Makau, EN Njeru, E Ng'ang'a & AK Kiprotich, Members

July 5, 2024

Between

Ikonia Resort & Hotels Limited

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Appellant moved the Tribunal vide a Notice of Motion application dated 16th April 2024 and filed under certificate of urgency on 17th April 2024 that was supported by an Affidavit sworn on the 16th April 2024 by William Odhiambo Oduol, a Director of the Appellant, seeking for the following Orders: -a.That this Honourable Tribunal be pleased to extend the time and grant the Applicant leave to file his notice of intention to appeal and the subsequent Appeal out of time.b.That costs of this application be in the cause.

2. The application is premised on the grounds, that: -i.The time for filing the notice of intention to appeal has lapsed.ii.The Tribunal has the discretion to grant the leave sought.iii.The Tribunal has the discretion to extend time.iv.The failure to file the notice of intention to appeal was not intentional.v.The failure to file the notice of appeal was due to inability caused by health issues. The main Operations Director, Mr. Ferdinand Waititu, was suffering from a series of illnesses since August 2022, rendering him unable to manage the company affairs effectively.vi.The deponent of the Affidavit is the Deputy Governor Siaya County, who has been embroiled in several impeachment proceedings due to his efforts to expose corruption within the County Government. This ordeal has caused him immense stress and negatively impacted on his health, further hindering the company’s ability to address the tax matters promptly.vii.The Hotel operated a bakery on a land that was leased by a fraudster, the real owner evicted the staff from the premises and vandalized the establishment causing a major loss of the records.viii.It is in the interest of justice that leave be granted.

3. The Respondent upon being served with the instant application filed a Replying Affidavit sworn by Geoffrey Sang, an officer of the Respondent, on the 15th May, 2024 and filed on the even date and which response raised the following grounds, that;i.The Respondent raised additional assessments on 2nd November 2022 to which the Applicant objected on 8th November 2022. That after many engagements and reminders to the Applicant the objection was fully rejected on 31st March 2023. ii.The Respondent subsequently commenced enforcement and/or recovery measures on 17th October 2023. iii.The Applicant pursuant to the enforcement measures woke up from its slumber and filed the instant application on the 16th April 2024. iv.The medical records of one Ferdinand Waititu, a director of the Applicant, shows that he was admitted at Kisumu County Referral Hospital on two occasions between 13th December 2022 to 24th January 2023 and 3rd February to 9th February 2024. v.It is trite that as at the 31st March 2023, when the Applicant’s objection was fully rejected the said Operations Director had long been discharged from Hospital.vi.The Applicant is a limited liability company with more than one director and other personnel, including one William Odhiambo Oduol, who signed the current application and not the said Ferdinand Waititu.vii.The alleged ground by one William Odhiambo Oduol of being embroiled in impeachment proceedings is not a ground envisaged under Sections 13 (3) and 13 (4) of the Tax Appeals Tribunal Act.viii.There is inordinate delay of over one year in making the current application.ix.The application is unsupported by and further that documents in the Applicant’s bundle of documents are incapable of being relied up for offending the mandatory provisions of Rule 9 of the Oaths and Statutory declarations Act, Cap 15 of the Laws of Kenya.x.The narrative that the Applicant operated a bakery leased by a fraudster where the real owner evicted the Applicant’s staff and vandalized the premises causing major loss of records is a figment of imagination that hold no water.xi.The application herein is not only lacking in merit but an abuse of the due process and as such liable for dismissal with costs in the first instance to the Respondent.

Parties Submissions 4. The parties despite being directed by the Tribunal to file and exchange with each other their respective written submissions, the Applicant did not file its submissions, the Tribunal shall hence consider the grounds on the face of the application and averments in the affidavit in support of the application.

5. The Respondent in its written submissions dated and filed on 22nd May 2024, raised one issue for determination, namely; Whether or not the application is merited.

6. The Respondent reiterated that the delay in the making of the current application is over one year and that the delay has not been explained by the Applicant. That the orders for extension of time are discretionary to the Tribunal which ought to be exercised judiciously.

7. The Respondent reiterated the fact that the application offends the provisions of Rule 9 of the Oaths and Statutory Declarations Act Cap 15 of the laws of Kenya.

8. The Respondent submitted that it defeats logic and neither has it been explained how one director CPA William Odhiambo Oduol who is well versed with tax Laws and procedures could not take timely and necessary steps either by himself and/or other officials of the Applicant.

Analysis and Findings 9. The instant application seeks, an order for the extension of time within which to file an appeal out of time and to file the Memorandum of Appeal and Statement of Facts.

10. The Tribunal’s power to entertain applications of this nature is donated by Section 13 of the Tax Appeals Tribunal Act Section 13 (3) and (4) provide as thus;-“(3)The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).(4)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.”

11. A reading of Section 13 (4) of the Tax Appeals Tribunal Act, it is apparent that the provision confines the grounds upon which the Tribunal is to exercise its discretion to the following;“(a)absence from Kenya;(b)sickness; or(c)any other reasonable cause.”

12. It therefore remains as an imposition upon the Applicant to advance a ground and demonstrate the same within the confines of Section 13 (4) of the TAT Act. The Applicant posited that the reasons that prevented it from lodging the appeal before this Tribunal within the prescribed timeline were, inter alia, that;i.The main Operations Director one Mr. Ferdinand Waititu, was suffering from a series of illnesses since August 2022. ii.The other director is the Deputy Governor Siaya County, who has been embroiled in several impeachment proceedings which caused him immense stress and negatively impacted on his health, further hindering the company’s ability to address the tax matters promptly.iii.The Applicant operated a bakery on a land that was leased by a fraudster, the real owner proceeded to evict the staff of the Applicant from the premises and in the process vandalized the establishment causing a major loss of the records.

13. The Tribunal having perused the Applicant’s grounds set forth on the face of the application as well as the averments contained in the Affidavit in support thereof, the Tribunal is persuaded that the grounds advanced by the Applicant all fall within the ambit of the grounds as provided within the provisions of Section 13 (4) of the Tax Appeals Tribunal Act as well as Rule 10 (3) of the Tax Appeals Tribunal (Procedure) Rules.

14. It was the Respondent contention that whereas the Applicant advanced grounds which prevented it from lodging its Appeal, the Respondent contended that the application is unsupported and further that documents in the Applicant’s bundle of documents are incapable of being relied up for offending the mandatory provisions of Rule 9 of the Oaths and Statutory declarations Rules.

15. Rule 9 of the Oaths and Statutory declaration Rules relating to the exhibits, provides that;“All exhibits to affidavits shall be securely sealed thereto under the seal of the commissioner, and shall be marked with serial letters of identification.”

16. The Tribunal has perused the application and the Affidavit in support of the application thereof and noted that the Applicant did not introduce its grounds and evidence as exhibits before the Tribunal, further the documents presented by the Applicant in support of the Applicant’s grounds were not in conformity with the provisions of Rule 9 of the Oaths and Statutory Declaration Rules as to allow the Tribunal to consider the same.

17. It is noteworthy that Rule 9 of the Oaths and Statutory Declaration Rules imposes a mandatory duty upon the Applicant to have furnished its exhibits in support of its grounds in the manner prescribed in law. It is clear that the Applicant failed to appropriately present it exhibits to support its grounds for delay.

18. It was the Tribunal’s position that, even if the Applicant had complied with the proviso in law, the Affidavit in support of the application was not signed by the Applicant’s Director who was the deponent thereof.

19. The Tribunal is of the view that the Affidavit having not been signed, the application was not supported and does not have any legs to stand on.

20. The Tribunal therefore finds that the application is therefore defective and unsustainable in law.

21. Consequently, the Application is incompetent and therefore fails.

Disposition 22. Based on the foregoing analysis, the Tribunal finds that the application is defective and incompetent and accordingly proceeds to make the following Orders: -a.The Application be and is hereby struck out.b.No orders as to costs.

23. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 5TH DAY JULY, 2024ERIC NYONGESA WAFULA - CHAIRMANMUTISO MAKAU- MEMBERELISHAH N. NJERU - MEMBEREUNICE N. NG’ANG’A - MEMBERABRAHAM K. KIPROTICH- MEMBER