[2020] KEHC 9921 (KLR)
The court found that the appellant is a going concern and has recently made substantial payments to the respondent, indicating its ability to pay any taxes found due. However, to secure the respondent's interests, the court exercised its discretion to grant a stay of enforcement of the Tax Appeal Tribunal's decision...
Source-derived case information.
- Citation
- [2020] KEHC 9921 (KLR)
- Parties
- Appellant: LG Electronics Africa Logistics FZE Kenya Branch; Respondent: Commissioner of Domestic Taxes
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Tax Appeal E064 of 2020
- Procedural Posture
- Tax Appeal / Ruling on Stay Application Pending Appeal
- Outcome
- Notice of Motion allowed with conditions.
- Legal Topics
- Stay of Execution, Tax Appeals, Bank Guarantee, Enforcement of Tribunal Decisions
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
LG Electronics Africa Logistics FZE Kenya Branch
Appellant
Commissioner of Domestic Taxes
Respondent
Procedural Posture
Tax Appeal / Ruling on Stay Application Pending Appeal
Legal Issues
- 1 Whether a stay of enforcement of the Tax Appeal Tribunal's decision should be granted pending appeal.
- 2 Whether the appellant should provide security for the stay in the form of a bank guarantee.
Ratio Decidendi
The court found that the appellant is a going concern and has recently made substantial payments to the respondent, indicating its ability to pay any taxes found due. However, to secure the respondent's interests, the court exercised its discretion to grant a stay of enforcement of the Tax Appeal Tribunal's decision and any further agency notices, on condition that the appellant provides a bank guarantee for Kshs. 1.5 million within 14 days. This approach balances the need to protect the respondent's interests while not unduly prejudicing the appellant's right to appeal.
Court Disposition
Notice of Motion allowed with conditions.
Orders
- Stay of enforcement of the decision of the Tax Appeal Tribunal Appeal No. 359 of 2018 and further agency notices granted on condition that the appellant provides a bank guarantee for Kshs. 1.5 million within 14 days in favour of the respondent pending the hearing and determination of the appeal.
- Mention on 25.08.2020 for further directions on the appeal.
Full Case Text
Judgment text and source record
19 paragraphs
IN THE HIGH COURT OF KENYA AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL AND TAX DIVISION
CORAM: D.S. MAJANJA J.
TAX APPEAL NO. E064 OF 2020
BETWEEN
LG ELECTRONICS AFRICA LOGISTICS FZE KENYA BRANCH.........APPELLANT
AND
COMMISSIONER OF DOMESTIC TAXES..................................................RESPONDENT
RULING
I have considered the arguments on both sides. It is not disputed that the appellant is a going concern and as stated by the counsel for the respondent, it has recently paid the respondent Kshs. 200,000,000/-. It is unlikely that the appellant will not be in a position to pay the taxes if ultimately found due by this court.
In order to secure the respondent’s interest in this matter, the Notice of Motion dated 05. 06. 2020 is allowed on the following terms:
1. There shall be a stay of enforcement of the decision of the Tax Appeal Tribunal Appeal No. 359 of 2018 and further agency notices on condition that the appellant shall provide a bank guarantee for the sum of Kshs. 1. 5 million within 14 days in favour of the respondent pending the hearing and determination of appeal.
2. Mention on 25. 08. 2020 for further directions on the appeal.
DATED and DELIVERED at NAIROBI this 6th day of JULY 2020.
D. S. MAJANJA
JUDGE
Mr Ouma with Ms Macharia instructed by Anjarwalla & Khanna LLP Advocates for the appellant.
Mr Opande, Advocate instructed by Kenya Revenue Authority for the Commissioner of Domestic Taxes.