[2023] KETAT 633 (KLR)

Kinyanjui v Commissioner of Domestic Taxes (Miscellaneous Application E136 of 2023) [2023] KETAT 633 (KLR) (3 November 2023) (Ruling)

Neutral citation: [2023] KETAT 633 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Application E136 of 2023

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

November 3, 2023

Between

Job Waweru Kinyanjui

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Applicant moved the Tribunal vide the application filed on 15th September 2023 under certificate of urgency and supported by an Affidavit sworn by Job Waweru Kinyanjui, the Applicant, seeking the following Orders: -a.Spent.b.That the Honourable Tribunal be pleased to extend time allowed for the Applicant to file a Notice of Appeal, Memorandum of Appeal, Statement of Facts and all other supporting documents.c.That the Honourable Tribunal be pleased to issue an order restraining the Respondent and or its agents from taking any enforcement mechanism with respect to the tax demand notice and the intended Appeal.d.That the Honourable Tribunal be pleased to issue an order vacating and or suspending the fourteen (14) days tax demand notice dated 12th September 2023, pending the hearing and determination of this application and the intended Appeal.e.That the Notice of Appeal dated 15th September 2023 filed herewith be deemed as properly filed and served.f.That costs for the application be provided for.

2. The application is premised on the grounds, that: -i.That the Respondent issued the Applicant with assessments on 9th December 2020 for the year 2018 and 2019 for Kshs. 1,711,876. 04 and 1,411,876. 00, respectively.ii.That the Applicant objected to the said Assessment on 23rd December 2020. iii.That the Applicant provided the Respondent with documents and bank statements in support to its objection.iv.That the Respondent however rejected the Applicant’s Objection and issued an objection decision on 28th November 2022 rejecting fully the Applicant’s Objection.v.That the Applicant was of the view that his Objection had been allowed since the Respondent never issued him with an objection decision within the statutory 60 days.vi.That in December 2022 the Applicant became seriously ill and was diagnosed with pertensive heart decease rendering him unable to attend to any business.vii.That it is until recently that the Applicant learnt that the Respondent had issued an objection decision on 28th November 2022 way outside the statutory 60 days period pursuant to Section 51 (11) of the Tax Procedures Act.viii.That the Applicant has an arguable Appeal for the reason that the Respondent’s Objection was issued outside the statutory 60 days’ period to Section 51 (11) of the Tax Procedures Act.

3. The Respondent opposed the application through a Replying Affidavit sworn by Alice Njoroge, an officer of the Respondent, on the 27th September 2023 and filed on the same date. The grounds of opposition as highlighted in the Affidavit were as follows: -i.That the application is an abuse of the Court process and the Applicant is undeserving of the same. Further the application is an afterthought,brought in bad faith, meant to delay the Respondent’s collection of taxes that are due and payable.ii.That assessments were issued upon the Applicant on 9th December 2020, who lodged notices of objection on 23rd December 2020. iii.That the Applicant was instructed to support his objection with relevant documentation, and failed to avail the supporting documents. As a result thereof, the Respondent issued its objection decision on 28th November 2022 rejecting the objection.iv.That the Respondent issued the Applicant with a fourteen (14) days tax demand notice for the payment of Kshs. 4,667,629. 00 dated 12th September 2023. v.That the Applicant failed to file the Notice of Appeal, Memorandum of Appeal, Statement of Facts and tax decision within the statutory timelines contrary to Section 13 (1) and 13 (2) of the Tax Appeals Tribunal Act.vi.That the Applicant has not demonstrated to the Tribunal’s satisfaction of his reason of serious illness or reasonable ground for failure to file his Appeal within the statutory timelines in accordance with Section 13 (4) of the Tax Appeals Tribunal Act.vii.That the Applicant’s failure to file the Appeal for over 10 months is a demonstration of lack of vigilance which does not warrant the exercise of the Tribunal’s discretion in his favour.viii.That the Applicant has been indolent and the he has failed to satisfy the principles as set out in the case of Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR.

Applicant’s Submissions 4. The Applicant submitted that upon lodging the objection, he was of the view that the Objection had been allowed since the Respondent never issued him with the objection decision within the statutory 60 days as provided for in the Tax Procedures Act.

5. The Applicant submitted that he had adduced sufficient evidence by way of Medical Reports to demonstrate that failure to file the Appeal in time was due to the sickness.

6. The Applicant contented that the delay in filing the Appeal within the stipulated timelines was unfortunate and beyond his capacity and capabilities.

7. The Applicant submitted that the Honourable Tribunal is bestowed with unlimited discretion to extend time to file an Appeal where the Applicant satisfies any of the reasons; absences from Kenya; sickness or; any other reasonable cause.

8. The Applicant referred the Tribunal to the principles set out in the case of Nicholas Kiptoo Arap Korir Salat vs. Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR, and further stated that the he has satisfied the principles to warrant the Tribunal exercise its discretion in his favour.

9. The Applicant stated that it would be greatly prejudiced if the orders sought are not granted and the Appeal would be rendered nugatory.

10. The Applicant submitted that he has discharged his burden of proof under Section 30 of the Tax Appeals Tribunal Act.

11. The Applicant humbly submitted that he has not been indolent, has an arguable Appeal with good prospects of success and urged the Tribunal to allow the application.

Respondent’s Submissions 12. The Respondent submitted that the Applicant made the instant application ten (10) months late and referred the Tribunal to the case ifMwangi vs. Kenya Airways as cited in the case of APA Insurance Limited v Michael Kinyanjui Muturi [2016] eKLR, in which the Court list the grounds to take into account on whether to grant extension of time as follows;i.The length of delay; ii.The reason for delay;iii.Possibly, the chances of the appeal succeeding if the application is allowed;iv.The degree of prejudice to the Respondent if the application is granted;

13. The Respondent submitted that the Applicant did not meet the criterion to be considered in extension of time as provided in the case of Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR.

14. The Respondent asserted that the Applicant failed to follow up the objection decision for a period of over eight (8) months is demonstration that he has not been vigilant and relied on the case of Yusuf Mohamed Salat vs. Idris Ali Ahmed [2009] eKLR.

15. The Respondent submitted that the period of the delay is excessive and is inexcusable and does not warrant the Tribunal’s exercise of discretion in the Applicant’s favour. The Respondent urged the Tribunal to dismiss the Applicant’s application.

Analysis and Findings 16. The instant application largely seeks for extension of time to file an Appeal out of time and orders restraining the Respondent from employing any enforcement mechanism pending the hearing and determination of the intended Appeal.

17. The Tribunal’s power to deal with applications of this nature is bequeathed by Section 13 (3) of the Tax Appeals Tribunal Act which provides that:―The Tribunal may, upon application in writing, extend the time for filing the Notice of Appeal and for submitting the documents referred to in subsection (2).‖

18. Further, such powers are discretionary and not as of right to the Applicant. The Tribunal is guided by the principles set out in the case of Leo Sila Mutiso vs. Rose Hellen Wangari Mwangi in considering an application of this nature, being:a.Whether there is a reasonable cause for the delay.b.The merits of the complained action.c.Whether there will be prejudice suffered by the Respondent if the extension is granted.

19. For any party who is aggrieved by the Respondent’s objection decision, such party may lodge and appeal before the Tribunal in line with the provisions of Sections 52 (1) of the Tax Procedures Act as read together with Section 13 (1) & (2) of the Tax Appeals Tribunal Act, which sections in relation to the statutory timelines provide as follows:-―52 (1) A person who is dissatisfied with an appealable decision may appeal the decision to the Tribunal in accordance with the provisions of the Tax Appeals Tribunal Act‖―13 (1) A notice of appeal to the Tribunal shall—a.be in writing;b.be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner.2. The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the Tribunal, of—a.a memorandum of appeal;b.statements of facts; andc.the tax decision.‖

20. Section 13 (3) of the Tax Appeals Tribunal Act provides for such a party who has with good reasons and/or failed to adhere to the statutory timelines to move the Tribunal seeking leave to file an Appeal out of time.

21. Similarly, Section 13 (4) of the Tax Appeals Tribunal Act sets out the grounds that the Applicant may rely upon when seeking to extend time to appeal, which Section provides that:-―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 giving notice of appeal within the specified period.‖

22. Whereas the Applicant pleaded and explained the reasons that prevented him from filing the Appeal within the statutory timelines was serious illness and presented a medical report in support of the assertion, the Respondent contented that the Applicant has not presented a reason to the satisfaction of the Tribunal to warrant the orders sought to be granted.

23. The reason advanced by the Applicant is one that is provided for the Tribunal’s consideration in dealing with application’s for extension of time to file an Appeal.

24. Upon perusal of the Medical Report presented, the Tribunal noted that the Applicant was taken ill sometimes in December 2022 and was receiving medical attention as late as 22nd August 2023 and expected back on 28th November 2023.

25. The Respondent submitted that it shall suffer prejudice if leave is granted, but has not demonstrated how it would suffer any prejudice.

26. It is the Tribunal’s considered view, that the Respondent shall not suffer any prejudice under the circumstances.

27. The Tribunal, on a balance of convenience finds that the Applicant has advanced sufficient grounds and has adequately explained the delay in filing the Appeal within the statutory timelines.

Disposition 28. Premised on the afore mentioned, the Tribunal finds that the application is merited and accordingly makes the following orders: -a.That the Applicant be and is hereby granted leave to file an appeal out of time.b.The Notice of Appeal dated 15th September 2023 be and is hereby deem as duly filed and served.c.The Applicant to file and serve his Memorandum of Appeal, Statement of Fact and the tax decision within Fifteen (15) days of date of delivery of this Ruling.d.That the Respondent shall file and serve its Statement of Facts together with documents in support thereof within thirty (30) days of being served with the appeal documents.e.No orders as to costs.

29. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF NOVEMBER, 2023. ERIC NYONGESA WAFULA CHAIRMANMUTISO MAKAU ELISHAH N. NJERU MEMBER MEMBEREUNICE N. NG’ANG’A ABRAHAM K. KIPROTICH MEMBER MEMBER