[2025] KETAT 12 (KLR)

L'oreal East Africa Limited v Commissioner of Customs and Border Control (Tax Appeal E965 of 2023) [2025] KETAT 12 (KLR) (17 January 2025) (Ruling)

Neutral citation: [2025] KETAT 12 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E965 of 2023

CA Muga, Chair, BK Terer, EN Njeru, E Ng'ang'a & SS Ololchike, Members

January 17, 2025

Between

L'oreal East Africa Limited

Applicant

and

Commissioner of Customs and Border Control

Respondent

Ruling

1. The Applicant moved the Tribunal through an application dated 22nd November, 2024 and filed on 25th November, 2024 and sought the following Orders:a.Spent.b.The Tribunal be pleased to issue orders for the refund of the taxes paid in protest by the Applicant as per the provisions of Section 144(3) of East Africa Community Customs Management Act, 2004 (hereinafter “EACCMA”).c.The Tribunal do make a finding that there is no inordinate delay in bringing this Application and that the same is merited.d.Any other order the Tribunal deem fit and proper to issue.e.That the costs for this Application be provided.

2. The Application which was supported by an affidavit sworn by Mr. Toddy Thairu Mwangi, the tax agent and advocate of the Applicant, on the 22nd day of November, 2024 was premised on the following grounds:a.That the Applicant having received a Judgment dated 25th October 2024 in its favour subsequently noted this Tribunal's erroneous omission of the order for the refund of the taxes paid in protest to the Respondent pursuant to the provisions of Section 144(3) of the EACCMA in its Orders.b.That the Tribunal's inadvertent failure to issue this Order prejudiced the Applicant by allowing the Respondent herein to deny refund of taxes paid in protest for want of a direct Order from this Tribunal.c.That further, there was no inordinate delay in making this Application of Appeal.d.That this Application has been brought in good faith, on reasonable grounds and without unreasonable delay.e.That it is just, fair and the interest of justice require that this Tribunal do certify this matter as urgent and exercise its jurisdiction by issuing the missing orders that will provide an appropriate remedy that is in tandem with the Applicant's prayers in the Memorandum of Appeal.f.That failure to issue the Order prejudices the Applicant by allowing the Respondent herein to deny refund of taxes paid in protest for want of a direct Order from the Tribunal.g.That the Respondent will not suffer any prejudice if the Application is allowed having lost the substantive case at this Tribunal.h.That the Application herein is premised on Section 29A of the Tax Appeals Tribunal Act, CAP 469A of the Laws of Kenya (hereinafter “TATA”)and the provisions of Rule 19 of The Tax Appeals Tribunal (Procedure) Rules.i.That the Respondent will not suffer prejudice if this Application is allowed.j.That it is only fair and in the interest of justice that this Application be allowed.

3. The Respondent upon being served with the Application responded by filing its grounds of opposition thorough a Preliminary objection and Replying Affidavit on 5th December, 2024 on the following grounds:Preliminary objectiona.That the Application was incompetent, legally unsuitable and as such an abuse of the court process as there was no proper Appeal before the Tribunal.b.That the Applicant has not exhausted all external mechanism available (High Court) as this Tribunal has downed its tools and cannot relook into the matter unless there is an error apparent on the record which they seek to review.c.That this Application is incompetent, legally unsuitable and amounts to forum shopping and as such an abuse of the court process as there is no Jurisdiction before the Tribunal.d.That the Tribunal lacks jurisdiction to hear the Application as it is functus officio as it delivered its Judgement on 25th October, 2024 in TAT No. 965 of 2023 and the Applicant had 14 days to seek review if any which they failed.e.That this Application is fatally defective as it offends the mandatory provisions of the laws and is a misconception and ought to be dismissed with costs to the Respondent.Replying Affidavitf.That this is Application is fatally defective as it offends the mandatory provisions of Section 53 of the Tax Procedures Act, CAP 469B of the Laws of Kenya (hereinafter “TPA”) and that without prejudice to the above the orders being sought in this Application were in the Memorandum of Appeal filed and that the Respondent is not defiant of the Judgement of the Tribunal.g.That the Applicant wants to fraudulently seek orders which were not originally prayed for in the finalized Appeal and wants to use this Tribunal to sanitize its pleadings in granting orders that were not even prayed for.h.That in order to succeed in civil contempt proceedings, an Applicant has to prove the terms of the Order; knowledge of these terms by the Respondent and failure by the Respondent to comply with the terms of the Order.i.That the Applicant did not proved in its Application, that the Respondent flouted the decision issued herein and the Respondent laid emphasis on Hadkison v Hadkison [1952] All ER 567 where the Court held that the plain and unqualified obligation of every person against whom an order was made is to obey it unless the order is discharged and disobedience of the order would result to being in contempt.j.That the Applicant is putting the Tribunal in an untidy situation in these proceedings as they have already pronounced themselves and closed the file and there is no error apparent on record.k.That if the Applicant seeks further orders or feels that there is disobedience then the right court to move was the High Court. However, they did the reverse and have now rushed to this Tribunal seeking orders they had not prayed for.l.That the Applicant has not exhausted all the external mechanisms available according to the Law after a Judgement is delivered.m.That the Application before the Tribunal is incompetent, legally unsuitable and amounts to forum shopping and as such, an abuse of the court process.n.That the Respondent in this case is working not with the intent to violate the rights of the Applicant but has filed an Appeal at the High court to challenge the said decision.o.That the decided cases have ruled that an Appeal filed at a higher court is a stay enough as the issues of the Judgement are contested and a party needs not to apply for stay when they have appealed.p.That the High Court is well placed to decide the issue of refund as the Respondent has filed an appeal against the Judgement of this Tribunal.q.That the Respondent was acting well within the Law and acting to safe guard the interests of the Kenyan government.r.That if the said prayers are granted by the Tribunal the implications can be grave as without pronouncement from the High Court on the appeal filed the Respondent risks to suffer a lot of prejudice.s.That also if the said prayers are granted then the Tribunal will be setting a bad precedent and there will be a risk of all litigants filling frivolous applications after the Tribunal has rendered its Judgement.t.That further if the Orders are granted the Respondent will not have any recourse to the Applicant.u.That the issuance of the Orders at this stage will be detrimental as the Appeal at the High Court will be already spent.v.That under the circumstances, this Application is a misconception and ought to be dismissed with costs to the Respondent.

4. The Applicant having been granted leave, filed a Supplementary Affidavit on 16th December 2024 wherein it raised the following other grounds in response to the Respondent:a.That the Applicant observed that the Respondent in its Notice of Preliminary Objection and Replying Affidavit, admitted that this Tribunal cannot revisit the matter unless there is an error apparent on the record that the Applicant seeks to have reviewed.b.In this context, the Applicant aimed to dispel any uncertainties held by the Respondent by reaffirming that its Application concerned the Tribunal’s apparent error in failing to issue an Order for the refund of taxes paid under protest to the Respondent, in accordance with Section 144(3) of the EACCMA.c.That the Respondent’s claims that the Application amounted to forum shopping or is an abuse of the court process or that the Tribunal lacks Jurisdiction, have no basis under the law. The Application did not constitute forum shopping as it pertained to a case that had already been heard and decided by this Tribunal. Furthermore, the Tribunal derives its jurisdiction from Section 29A of the TATA. Therefore, the Application cannot be considered an abuse of the law or the court process.d.That in its Notice of Preliminary Objection, the Respondent asserted that the Application was fatally flawed as it violated the mandatory provisions of the law. The Application reaffirmed that its Application was based on Section 29A of the TATA. The Applicant pointed out that this provision consistently uses the word "may" instead of "shall", indicating that it is not couched in mandatory terms as claimed by the Respondent.e.That in the circumstances therefore, it is necessary that this Application be allowed as prayed for in the Notice of Motion and the Tribunal be guided by Article 159(2)(d) of the Constitution of Kenya 2010 (hereinafter “the Constitution”) by dispensing with procedural technicalities hearing the matter on merit.f.That the Respondent, in its Replying Affidavit, claims that the Application is fatally defective as it violates the mandatory provisions of Section 53 of the TPA. The Applicant observed that this provision allows for the appeal of a decision of the Tribunal to the High Court within thirty days of receiving the decision. The Applicant asserts that this claim is false and without merit, as having received a favorable decision from the Tribunal, it had no intention or reason to appeal the decision to the High Court. The Applicant emphasized that, as a matter of fact, its Application sought to have the Tribunal review its Orders and not decision and this is in accordance with the provisions of Section 29A of the TATA.g.The Applicant also referred to Section 2 of the Civil Procedures Act, CAP 21 of the Laws of Kenya (hereinafter “CPC”) which defines an "Order" as the formal expression of any decision of a court which is not a decree, and includes a rule nisi, clearly distinguishing an Order from a decision.h.That the Respondent, in its Replying Affidavit, claims that the Applicant requested an Order that it never sought in the main suit. This claim was unfounded and intended to misrepresent the facts, as a brief review of the Applicant’s pleadings clearly showed that the Applicant did specifically request the Order for the refund of any taxes paid under protest to the Respondent.i.That, in its Replying Affidavit, the Respondent highlighted that this Tribunal lacks jurisdiction to hear the application as it is functus officio given that it delivered its Judgement on 1st August, 2024 in TAT NO. 909 of 2023 and that any application for review ought to have been made within 14 days of the delivery of the Judgement.j.That the Applicant clarifies that the matter at hand pertains to this Tribunal’s Judgment in TAT NO. E965 OF 2023 delivered on 25th October 2024. On this basis, the Applicant stated that it is a stranger and unfamiliar with the matter that is the basis of the Respondent’s Preliminary Objection and the prayers sought therein.k.That failure to issue this Order may prejudice the Applicant by allowing the Respondent herein to deny refund of taxes paid in protest for want of a direct order from this Tribunal.l.That the Respondent will not suffer prejudice if this Application is allowed having lost the substantive case at this Tribunal and that it is only fair and in the interest of justice that this Application be allowed.m.That this Tribunal be pleased to allow the Application while awarding the costs of and incidental to this Application to the Applicant.

Analysis And Findings 5. The Applicant complied with the Tribunal’s directions on 10th December, 2024 by filing its written submissions on or before 30th December, 2024. The Respondent did not file written submissions. The Tribunal has carefully considered the Applicant’s submissions and will proceed to analyse the matter before it as hereinunder:

6. The Applicant sought the Tribunal’s indulgence to issue specific orders for the refund of taxes paid in protest by the Applicant pursuant to the provisions of section 144(3) of the EACCMA. The Respondent raised a Preliminary Objection against the Application by the Applicant on the basis that the Application was incompetent, the Tribunal lacks jurisdiction and that the Applicant did not comply with the mandatory legal provisions.

7. The Tribunal’s powers to review its Decrees or Orders are as set out under Section 29A of the TATA which provides as follows:“(1)a person aggrieved by a decree or an order from which no appeal has been preferred from the Tribunal to the High Court, may apply for review of the decree or the order within seven days from the date the decree or order was made by the Tribunal.(2)Applications for review of decree or orders under subsection (1) may be made –a.upon the discovery of new or important matter or evidence which after the exercise of due diligence, was not within the knowledge of the applicant or could not be produced by the applicant at the time when the decree was passed or the order was made;b.on account of some mistake or error apparent on the face of the record; orc.for any other sufficient reason.”

8. On 25th October, 2024 the Tribunal delivered its Judgement in respect of TAT APPEAL NO. 965 OF 2024 wherein it decreed that the Appeal had succeeded and made Orders as set out below:“FINAL DECISION 122. The upshot to the foregoing is that the Tribunal finds and holds that the Appeal succeeds and consequently makes the following Orders:a.The Appeal be and is hereby allowed.b.The Respondent’s review decision issued on 6th November 2023 be and is hereby set aside.c.Each party to bear its own cost.

123. It is so Ordered.”

9. The Applicant has made an Application for the review by the Tribunal of its Orders but since the Application was made out of the statutory time limit of seven (7) days pursuant to and in compliance with Section 29A(1) of the TATA , the Tribunal lacks the Jurisdiction to consider it.

10. Notwithstanding the fact that the Tribunal lacks jurisdiction to consider the Application, the firm view of the Tribunal is that there is no limitation on its Jurisdiction to correct its own Decree’s and/or Orders where there is a mistake or error apparent on the face of the record. The Tribunal notes that although the Applicant made a prayer in its pleadings for a refund of the tax paid by it in protest, the same was granted due to an oversight.

11. The Tribunal having been alerted to the deficiency in its Orders in failing to grant the specific prayer by the Applicant will exercise its Jurisdiction to review its Orders.

Disposition 10. The upshot of the foregoing is that the Tribunal reviews the entirety of the Orders issued on 25th October 2024 on account of the mistake or error apparent on the face of the Orders and the revised Orders are as follows:a.The Appeal be and is hereby allowed.b.The Respondent’s review decision issued on 6th November 2023 be and is hereby set aside.c.The Applicant be and is hereby entitled to a refund of any duties paid in protest pursuant to the provisions of section 144(3) of EACCMA.d.Each party to bear its own cost.

11. It is so Ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 17TH DAY OF JANUARY, 2025. ………………………………….CHRISTINE A. MUGA………………………….. …………….…………….. CHAIRPERSONBONIFACE K. TERER ………………………….. …………….…………….. MEMBERELISHAH N. NJERU………………………….. …………….…………….. MEMBEREUNICE N. NG’ANG’A ………………………….. …………….…………….. MEMBEROLOLCHIKE S. SPENCER………………………….. …………….…………….. MEMBER