[2024] KETAT 493 (KLR)

Jilk Construction Limited v Commissioner of Legal Services and Board Co-ordination (Tax Appeal 1436 of 2022) [2024] KETAT 493 (KLR) (22 March 2024) (Ruling)

Neutral citation: [2024] KETAT 493 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal 1436 of 2022

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

March 22, 2024

Between

Jilk Construction Limited

Appellant

and

Commissioner of Legal Services and Board Co-ordination

Respondent

Ruling

1. The Respondent vide a Notice of Motion dated the 15th day of June, 2023 filed under a Certificate of urgency on the even date and which is supported by an Affidavit sworn by Kelvin Tongi, an officer for the Respondent, on the even date, sought for the following Orders:-a.Spentb.Spentc.That this Honourable Tribunal do issue Orders extending leave for the Respondent to file its Statement of Facts and submissions within the main Appeal.d.That the costs of this application be provided for.

2. The application is premised on the following grounds:-a.That the Respondent enjoyed the effective service of the Appeal on the 8th June, 2023, when, on the material day, the Honourable Tribunal directed parties to dispose of the subject Appeal via written submissions.b.That given the inadvertent failure to serve the Respondent by the Appellant, the Respondent lost the opportunity to effectively and material respond to the Appeal, the Respondent’s right to fair hearing diminished to its detriment unless its granted an opportunity to file proper response.c.That it is in the public interest and good governance that the application herein be heard exparte on the first and orders granted on priority basis.d.That the application herein, has been brought timeously and without undue delay.e.That it is in the interest of justice and in public interest that the instant application be allowed as prayed.f.That this Honourable Tribunal has the jurisdiction to grant the orders sought.

3. The Appellant in response to the application filed a Replying affidavit sworn by Charles Okello, the tax agent for the Appellant, on the 21st June, 2023 and filed on the 22nd June, 2023 in which it raised the following grounds of opposition:-a.That the Appellant being dissatisfied with the Respondent’s objection filed the Notice of Appeal and the relevant Appeal documents before the Tribunal on the 25th November, 2022. b.That the documents were filed online and the service effected of the documents was effected upon the Respondent by email on the very 25th November, 2022. c.That the subsequent emails correspondences from the Tribunal on the 28th November, 2022 and the 1st December, 2022 were all copied on the Respondent’s email address.d.That subsequent to the filing of the Appeal there were several Mentions before the Tribunal on 22nd December, 2022, 22nd February, 2023, 24th April, 2023, 8th June, 2023 and 20th June, 2023 and with the Mention Notices being served on the very email address for the Respondent.e.That it is clear that the email used by the Appellant in effecting service of the Appeal belongs to the Respondent and the same has not been denied by the Respondent in its application.e.That the Respondent’s averment that the reason it has never filed its response is because they have not been served with the Appeal is untrue and without merit.f.That during the Mention dates the Respondent’s representative was present wherein the Tribunal was informed, with the concurrence of the Respondent that there was a subsisting Appeal properly on record which was subsequently referred to ADR for resolution.g.That on diverse and several dates when the Appeal was mentioned before the Tribunal, the Respondent did not raise the issue of the lack of knowledge of the existence of the appeal or that it had not been served with the said Appeal.h.That the Respondent’s subsequent request of the appeal documents from the Tribunal was merely an afterthought by the Respondent to make up its case for failing to file a response within timelines.i.That the Respondent was required to file its response to the Appeal within 30 days, if indeed it was opposed to the said Appeal.j.That despite being aware of the existence of the Appeal from the point it was filed and served and on subsequent Mentions the Respondent never sought any leave to file its response if any.k.That consequently, there is inordinate delay in bringing this application over 7 months after the Appeal was filed.l.That all along having not been served with any response, it was clear to the Appellant that its Appeal was not opposed.m.That in the premises, the Respondent’s application is without merit and ought to be dismissed with costs to the Appellant.

Analysis and Findings 4The parties in compliance with the directions by the Tribunal to the effect that the application was to be canvassed by way of written submissions duly filed their separate and respective submissions which the Tribunal has duly considered in arriving at its findings hereinafter.

5. The Respondent has sought for the enlargement of time within which to file its Statement of Facts in response to the Appeal, on the basis that it was not at all served with the Notice of Appeal and appeal documents as filed in the Appeal on the part of the Appellant.

6. The timelines for filing a Statement of Facts on the part of the Respondent subsequent to being served with the Appeal documents are immortalised in Section 15(1) of the Tax Appeals Tribunal Act which provides as follows:-“The Commissioner shall within thirty days after being served with a copy of an appeal to the Tribunal, submit to the Tribunal enough copies as may be advised by the Tribunal, of –a.a statement of facts including reasons for the tax decision; andb.any other document which may be necessary for review of the decision by the Tribunal.” (Emphasis added)

7. To appreciate the intention of Parliament in requiring the strict compliance with the statutory timelines for filing the Statement of Facts and effecting service thereof upon the Appellant, a reading of Section 15(4) of the Tax Appeals Tribunal Act clearly demonstrates a corresponding intention to provide reprieve to a party who is prevented for good reason from complying with the mandatory statutory timelines. The Section provides as follows:-“The Tribunal may upon application in writing by the Commissioner, extend the time for submitting and serving the statement of facts and documents referred to in this section, where it is proved to the satisfaction of the Tribunal, that the delay is not inordinate or other reasonable cause that may have prevented the Commissioner from submitting and serving the statement of facts and the documents within the specified period.”

8. The Appellant intimated severally that the service of the Notice of Appeal and the Appeal documents was effected upon the Respondent by email on the 25th November, 2023 at the very instance at which the documents were being lodged with the Tribunal for filing.

9. The trail of emails annexed to the Affidavit in support of the application indeed attest to the fact that the documents were forwarded to the Respondent on the 25th November, 2022 at 1810hrs.

10. The Tribunal notes that subsequent to the filing of the Appeal, the Appeal was set down for Pre-trial directions on the 21st February, 2023 vide a Mention Notice dated the 22nd December, 2022 that was physically served upon the Respondent of the even date at 4:00pm.

11. The matter came up for Mention before the Tribunal on the 21st February, 2023, 24th April, 2023 and 8th June, 2023 and during which Mention sessions the Respondent was represented by Counsel and at no material time was the issue of non-service of the appeal documents raised with the Tribunal.

12. The Tribunal equally notes that the material factual issues raised by the Appellant in its Replying Affidavit as to the specific manner of service of the Appeal documents upon the Respondent remain completely uncontroverted.

13. The Respondent’s inertia manifested in the proceedings before the Tribunal suggests complete absence of exercise of due care and attention on the part of the Respondent in the manner of handling this Appeal.

14. The Respondent ought to demonstrate due diligence and bona fide intentions when seeking for enlargement of time to discharge its statutory obligations. This is well captured in decision of the court in Diplack Kenya Ltd v William Muthama Kitonyi [2018] eKLR which quoted approvingly the holding in Daphne Parry v Murray Alexander Carson [1963] EA 546 as thus:-“Though the provision for extension of time requiring “sufficient reason” should receive a liberal construction, so as to advance substantial justice, when no negligence, not inaction, nor want of bona fides is imputed to the appellant, its interpretation must be in accordance with judicial principles.If the appellant had a good case on the merits but is out of time and has no valid excuse for the delay, the court must guard itself against the danger of being led away by sympathy, and the appeal should be dismissed as time-barred, even at the risk of injustice and hardship to the appellant.”

15. The Tribunal notes that inspite of the Respondent having been invited to attend to the Pre-trial Mentions in the Appeal in December, 2022 it took the Respondent close to seven (7) months to take a proactive decision to defend the Appeal, that was appropriately filed and served on the part of the Appellant. The manifest laches on the part of the Respondent are completely inexcusable.

16. The Tribunal in the circumstances finds that the Respondent has not offered sufficient reason for the inaction on its part and is thus completely undeserving of any exercise of discretion in its favour.

Disposition 17. The upshot of the foregoing analysis is that the application lacks merit and the Orders that commend themselves to the Tribunal are as follows:-a.The application be and is hereby dismissed.b.The Appeal to proceed to hearing as undefended with the Respondent being at liberty to file any submissions restricted to any legal issues raised or arising in the Appeal.c.The parties to comply with the directions on the filing of the written submissions in respect of the Appeal in terms of the directions issued by the Tribunal on the 8th June, 2023 and the parties are to accordingly file and serve upon each other with their respective written submissions by the 29th March, 2024. d.The Appeal is hereby fixed for further directions on hearing on 15th April, 2024. e.No orders as to costs.

18. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 22ND DAY OF MARCH, 2024ERIC NYONGESA WAFULA.......................CHAIRMANMUTISO MAKAU...............................MEMBERABRAHAM K. KIPROTICH..........................MEMBERELISHAH N. NJERU..............................MEMBEREUNICE N. NG’ANG’A............................MEMBERI certify that this is a true copy of the originalsignedDEPUTY REGISTRAR