[2023] KETAT 356 (KLR)

Kenya Education Network Registered Trustees v Commissioner of Domestic Taxes (Appeal 1459 of 2022) [2023] KETAT 356 (KLR) (9 June 2023) (Ruling)

Neutral citation: [2023] KETAT 356 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Appeal 1459 of 2022

E.N Wafula, Chair, Cynthia B. Mayaka & AK Kiprotich, Members

June 9, 2023

Between

Kenya Education Network Registered Trustees

Appellant

and

Commissioner Of Domestic Taxes

Respondent

Ruling

1. The application which was by way of a Notice of Motion dated 29th November 2022 and filed on 30th November 2022 is supported by an Affidavit sworn by the Applicant’s Chief Accountant, Maryanne W. Njenga, on the 29th November, 2022 sought for the following Orders:-a)That this Tribunal be pleased to set aside the Respondent’s decision contained in a letter dated 17th October, 2022 pending the Appellant’s application for late objection.b)That this Tribunal allows the Appellant to file its late objection as per its letter dated 6th October, 2022. c)That this Honourbale Tribunal deems the Notice of Appeal, Statement of Facts together with the other relevant documents filed as having been duly filed within time,

2. The application is premised on the following grounds:-a)That the Applicant filed a Notice of Appeal dated 17th November 2022 appealing the Respondent’s decision vide a letter dated 17th October 2022 objecting to the Appellant’s objection dated 6th October 2022 requesting the Respondent to accept its application to lodge a late Objection.b)That the Objection and other relevant documents were due for filing within 30 days after the erroneous debit adjustment voucher was raised on 17th October 2019. c)That the delay in objecting to the Respondent’s assessment was occasioned by the fact that the Appellant was unable to file the said objection due to the absence of a valid additional assessment order hence the iTax system could not allow the filing of an objection or even uploading the said documents.d)That the Appellant made persistent efforts in pursuing the matter through physical visits to the Respondent’s offices, and had several meetings, emails, and letters, however, the said issue was not resolved.e)That the Appellant manually objected to the assessment on 6th December 2019, 30th January 2020, 17th March 2020, 29th June 2021, and finally on 6th October 2022. f)That further, on 5th March 2020, the Appellant was advised via email to file its Objection via iTax. That however, the Appellant’s efforts to file the same via the online platform were impossible since the Appellant had not received as assessment order/there was a lack of a valid assessment order/number.g)That the Appellant filed another Objection manually vide a letter dated 17th March 2020, and thereafter, the Respondent replied to the said letter on 18th May 2022 therefore, the Appellant’s delay to object within the statutory timeline was neither inordinate nor deliberate and was therefore beyond the Appellant’s control.h)That after several correspondences with the Respondent, on 4th March 2022, the Respondent advised the Appellant to file a manual Objection application against the additional assessment to the Independent Review of Objection.i)That no prejudice shall be suffered by the Respondent because of the said delay.j)That if the orders herein sought are not granted, the Appellant will suffer great injustice and prejudice.k)That it is in the interest of justice, fairness, and equity that the application is allowed.

3. The Appellant in its written submissions dated and filed before the Tribunal on 16th January 2023 stated as hereunder:-a)The Appellant submitted that it has come to the Tribunal with clean hands and has disclosed material facts without misinterpreting any facts relating to the matter at hand. It added that it has been consistent in settling the matter, particularly through the Tax Dispute Resolution Division and is ready to undertake this matter to its logical conclusion.b)It urged the Tribunal to disregard prayers a. and b. as sought in its Notice of Motion application indicating its withdrawal of the same and requested the Honourable Tribunal to find for it in the remaining prayers sought. It argued that the application before this Honourable Tribunal would still be proper based on the Memorandum and grounds laid despite the withdrawal of the two prayers.c)The Appellant maintained that it has met the prerequisites for instituting a cause before this Honourable Tribunal and the current application does not offend the rules. It asserted that if permitted, the Respondent and Appellant can jointly correct the assessment as it has sufficient documentary evidence to successfully justify its objection.d)It further asserted that the current application is legal and raises triable issues to be determined by this Honourable Tribunal and should not be struck out purely on technicalitiese)It contended that it would immensely suffer injustice and prejudice should the Tribunal fail to hear and determine the application as it is before the Tribunal with clean hands ready to cooperate with the Respondent and provide all documentary evidence to support its position.f)It reiterated that it did not file the current proceedings as an afterthought and its application is competent and lawful and does not seek to abuse the Tribunal’s process and should be allowed substantively.

4. In response to the application the Respondent filed a Replying Affidavit sworn by Violet Tananko, an officer of the Respondent, sworn and filed on 8th December 2022 raising the following as the grounds of opposition:a)That the Respondent issued its objection decision on 17th October 2022 to the Appellant.b)That the Appellant filed its Notice of Appeal on 16th November 2022. c)That the Appellant later filed its Memorandum of Appeal and Statement of Facts on 30th November 2022. d)That the Appellant has fulfilled the conditions of a valid appeal as set out in Section 13 of the Tax Appeals Tribunal Act, 2013. e)That the Appellant has filed its Appeal within the required timeline.f)That prayers 1 and 2 of the application are issues to be determined on merit under the Appeal according to Section 20 of the Tax Appeals Tribunal Act, 2013. g)That the application as filed is incompetent, bad in law, fatally defective and is an abuse of this Honourable Tribunal’s process.h)That the application discloses no reasonable cause of action and is totally unfounded and ought to be dismissed with costs to the Respondent.i)That the Appellant has not demonstrated it deserves favourable discretion of this Honourable Tribunal and the application should be dismissed with costs to the Respondent.

5. In its written submissions dated and filed on 4th January 2023, the Respondent stated as follows:-a)The Respondent relied on Section 51(12) of the Tax Procedures Act, 2015, and submitted that it issued its Objection decision on 17th October 2022 to the Appellant while the Appellant filed a Notice of Appeal on 16th November 2022 within the statutory time period.b)It further relied on Section 13 of the Tax Appeals Tribunal Act arguing that the Appellant filed its Memorandum of Appeal and Statement of Facts on 30th November 2022 within statutory timelines opining that Section 13(3) and (4) of the Tax Appeals Tribunal Act, 2013 is not relevant to the Appellant.c)The Respondent cited the case of Anthony Kariuki Mwai v National Transport & Safety Authority & 2 Others [2020] eKLR where it was held as thus: “Speaker of National Assembly v Karume 1992 eKLR which stated as follows; “where there is a clear procedure for redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed. Accordingly, the special procedure provided by any law must be strictly adhered to since there are good reasons for such special procedures.”d)The Respondent further cited the case of Communication Carriers Limited v. Commissioner of Domestic Taxes [2020] eKLR where the court stated that:- “In Joseph Gitahi Gachau& Another v. Pioneer Holdings (A) Ltd. & 2 others, Civil Application No. 124 of 2008, it was held that: “an arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court; one which is not frivolous.”e)It submitted that, contrary to the provisions of Section 29 of the Tax Appeals Tribunal Act 2013 which provides for the decisions that can be granted by the Tribunal, prayers (a) and (b) of the application dated 30th November ought to be canvassed in the main Appeal.f)It concluded that the application is premature and lacks merit.

Analysis and Findings 6. The Appellant in its application averred that it was incapable of lodging its Objection due to an error in the Respondent’s system which led to a delay in its filing an objection to the assessment.

7. The Respondent on its part argued that the instant Appeal is not time-barred and that the Appellant is within the statutory timelines thus rendering the current application improperly before the Tribunal.

8. The issue at hand seems to be the propriety or lack thereof of the instant application filed before the Tribunal.

9. Section 51 (11) and (12) of the Tax Procedures Act, No. 29 of 2015 provides that:“(11)(11) The Commissioner shall make the objection decision within sixty days from the date of receipt of a valid notice of objection failure to which the objection shall be deemed to be allowed.(12)A person who is dissatisfied with the decision of the Commissioner under subsection (11) may appeal to the Tribunal within thirty days after being notified of the decision.”

10. In the instant case, gleaning through the documents provided by the parties, the Appellant raised an objection dated 17th March 2020 which was received by the Respondent on 18th March 2020. It is also noted that the Appellant sent another Objection dated 6th October 2022 and received on even date by the Respondent, who issued an Objection decision dated 17th October 2022.

11. It is also observed that by mutual consensus, the Appellant filed a Notice of Appeal on 17th November 2022 followed by a Memorandum of Appeal and appeal documents, Statement of Facts and the tax decision, all of which were filed on 30th November 2022.

12. It is apparent to the Tribunal that there exists a proper Appeal before it on the and thus the current application seeking for an extension of time is misconceived and completely unnecessary.

Disposition 13. The Tribunal in the circumstances finds that the application was improperly filed before it and accordingly makes the following Orders:-a. The application be and is hereby dismissed.b. No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 9TH DAY OF JUNE, 2023. .................................ERIC N. WAFULACHAIRMAN.................................CYNTHIA MAYAKA ABRAHAM K. KIPROTICHMEMBER MEMBER