https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9013

Kenya Revenue Authority v Bristol Estate Limited & 3 others (Miscellaneous Application E049 of 2023) [2026] KEHC 9013 (KLR) (26 June 2026) (Ruling) Neutral citation: [2026] KEHC 9013 (KLR) Republic of Kenya In the High Court at Mombasa Miscellaneous Application E049 of 2023 NM Orina, J June 26, 2026 IN THE MATTER OF THE COMPANIES ACT, NO. 17 OF 2015 AND IN THE MATTER OF AN APPLICATION FOR RESTORATION OF BRISTOL ESTATE LIMITED TO THE REGISTER OF COMPANIES Between Kenya Revenue Authority Applicant and Bristol Estate Limited 1st Respondent Pietro Bongiovanni 2nd Respondent Ernesta Sciarra 3rd Respondent The Registrar of Companies 4th Respondent Ruling A. Background 1.Before this Court for determination is the Amended Notice of Motion dated 3 April 2025 brought pursuant to Sections 916 and 917 of the Companies Act, No. 17 of 2015 and Section 3A of the Civil Procedure Act. The Applicant seeks principally, an order directing the Registrar of Companies to restore the 1st Respondent herein, to the Register of Companies. The application is premised on the grounds that the striking out of the 1st Respondent from the register of companies did not comply with the provisions of the Companies Act as well as tax laws. 2.Despite service, none of the Respondents entered appearance, filed a response, or otherwise opposed the application. The application therefore proceeded as unopposed. B. The Applicant’s Case 3.The Applicant avers that the 1st Respondent was struck off the Register of Companies pursuant to Gazette Notice No. 3876 dated 5 June 2020 following an application for voluntary striking off under Section 897(4) of the Companies Act. It is the Applicant's contention that at the time of its dissolution, the 1st Respondent owed taxes amounting to Kshs. 475,870,227.30 comprising unpaid Income Tax of Kshs. 372,592,809.92 and Value Added Tax of Kshs. 103,277,417.38, exclusive of accruing interest and penalties. 4.The Applicant further avers that the 1st Respondent incurred penalties of Kshs. 1,000,000 for its failure to apply for deregistration of its tax liabilities as prescribed under Section 81 of the Tax Procedures Act. 5.It is the Applicant’s case that notwithstanding the existence of the said tax liabilities, the 1st Respondent neither served the Applicant with its application for striking off as required under Section 900 of the Companies Act nor applied for cancellation of its tax obligations and Personal Identification Number in accordance with the Tax Procedures Act and the Value Added Tax Act. 6.The Applicant therefore contends that, being a creditor of the company, it is entitled to seek restoration of the 1st Respondent to the Register of Companies for purposes of pursuing recovery of the outstanding tax liabilities. C. Issues for Determination 7.Upon considering the pleadings, this Court has summed up the issues for determination as follows:i.Whether the Applicant has demonstrated sufficient grounds under the Companies Act to warrant the restoration of the 1st Respondent to the Register of Companies.ii.Whether the outstanding tax liabilities of the 1st Respondent survive its dissolution and are capable of enforcement upon restoration. D. Analysis & Determination i. Whether the Applicant has demonstrated sufficient grounds under the Companies Act to warrant the restoration of the 1st Respondent to the Register of Companies. 8.Sections 916 and 918 of the Companies Act 2015 confer jurisdiction upon this Court to order restoration of a struck off or dissolved company. Particularly, Section 916(2) provides a non-exhaustive list of persons entitled to apply, including at subsection (2)(i), “a person who was a creditor of the company at the time of its being struck off the Register or dissolved.” 9.The Applicant has exhibited the 1st Respondent's tax ledger indicating that the company allegedly owed tax liabilities amounting to Kshs. 475,870,227.30 as at the time of its dissolution. Those liabilities comprise Income Tax and Value Added Tax, together with accruing penalties and interest. No evidence has been tendered to dispute the existence of these liabilities. 10.Pursuant to the Section 32 of the Tax Procedures Act, “A tax payable by a person under a tax law shall be a debt due to the Government and shall be payable to the Commissioner.” 11.A tax debt arises by operation of law the moment a taxable event crystallizes and the tax obligation accrues. The failure to pay, therefore, gives rise to the right of recovery. It is this court’s finding that on the face of the evidence produced by the Applicant being the 1st Respondent’s i-tax ledger showing owed tax obligations, the Applicant has demonstrated that it is owed a debt and thus it is a creditor as against the 1st Respondent. These owed taxes remain a legally binding debt until they have been challenged successfully. For that reason, the Applicant has demonstrated sufficient reason for grant of the orders sought to reinstate the 1st Respondent company. 12.The Applicant further contends that the 1st Respondent procured its striking off in contravention of the mandatory provisions of the Companies Act. Particular reliance was placed on Section 900(1) of the Companies Act, which requires a person applying for the striking off of a company to serve a copy of the application upon every creditor of the company within seven days of making the application. It states as follows:A person who makes an application under section 897 on behalf of a company shall ensure that, within seven days after the day on which the application is made, a copy of the application is given to every person who at any time on that day is—a.a member of the company;b.an employee of the company;c.a creditor of the company;d.… 13.This Section provides in mandatory and unambiguous language that a person making an application for striking off shall, within seven days of the application, send a copy thereof to, among others, every creditor of the company. The operative language here is “shall”. The purpose of this requirement is to protect creditors from loss or prejudice without notice or opportunity to be heard. 14.The Applicant has averred, which averment has not been rebutted, that it received no notice of the application for striking off to which it was entitled to by virtue of being a creditor. As the statutory body charged with the collection and administration of taxes and as a creditor within the meaning of Section 900(1)(c) of the Companies Act, the Applicant was entitled to be notified of the intended dissolution and afforded an opportunity to object thereto and safeguard its interests. The Respondents have not controverted the assertions by the Applicant and to that extent this court finds that the striking off of the 1st Respondent did not comply with Section 900(1) of the Companies Act.ii.Whether the outstanding tax liabilities of the 1st Respondent survive its dissolution and are capable of enforcement upon restoration. 15.On the second issue, Section 32 of the Tax Procedures Act provides that tax due and payable under a tax law constitutes a debt due to the Government. This provision does not suggest that such debt is extinguished by the dissolution or deregistration of a taxpayer. To the contrary, it contemplates the continued enforceability of tax obligations until they are lawfully discharged. 16.To hold that dissolution automatically extinguishes tax liabilities would create a perverse incentive structure. It would mean that companies could divest themselves of tax liabilities through dissolution, that they would effectively be obtaining an extra-legal waiver of taxation. 17.Therefore, the tax liabilities alleged by the Applicant accrued during the 1st Respondent's active existence and survive its dissolution. They remain due, payable, and recoverable in accordance with the Tax Procedures Act and the Companies Act unless successfully challenged through the available legal avenues. E. Conclusion 18.For the foregoing reasons, the Applicant’s application is hereby allowed with the consequence that the 4th Respondent is hereby directed to restore the 1st Respondent to the register of companies. There shall be no order as to costs as the application was undefended. 19.Orders accordingly. DELIVERED, DATED AND SIGNED AT NAIROBI THIS 26TH DAY OF JUNE, 2026.NABIL M. ORINAJUDGEJudgment virtually delivered virtually in the presence of:Mr. Kasibwa for the ApplicantLisa – Court Assistant