[2024] KETAT 704 (KLR)

Maragwa v Commissioner of Domestic Taxes (Tax Appeal 167 of 2023) [2024] KETAT 704 (KLR) (Commercial and Tax) (24 May 2024) (Judgment)

Neutral citation: [2024] KETAT 704 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Commercial and Tax

Tax Appeal 167 of 2023

E.N Wafula, Chair, RO Oluoch, Cynthia B. Mayaka, AK Kiprotich & T Vikiru, Members

May 24, 2024

Between

Francis Waigwa Maragwa

Appellant

and

Commissioner of Domestic Taxes

Respondent

Judgment

Background 1. The Appellant is an individual taxpayer carrying out the business of retail within the Republic of Kenya.

2. The Respondent is a principal officer appointed pursuant to Section 13 of the Kenya Revenue Authority Act (KRA), Act No. 2 of 1995, and KRA is empowered to enforce and administer provisions of written laws set out in Section 5 as read together with the First Schedule of the KRA Act.

3. The Respondent issued the Appellant with additional assessment for VAT of Kshs. 840,843. 54 on 27th October 2022 for the tax period December 2019.

4. The Appellant lodged his objection to the additional VAT assessment via the itax platform on 8th November, 2022

5. The Respondent issued its objection decision on 5th January 2023.

6. The Appellant aggrieved by the Respondent’s objection decision dated 5th January, 2023 lodged the Appeal herein on the 27th February, 2023.

The Appeal 7. The Appeal is premised on the following grounds as stated in the Memorandum of Appeal filed on 27th February, 2023: -i.That there has been no month which could add a turnover of Kshs. 5,000,000. 00 to give such a huge amount on tax.ii.That the return for that particular month ended with only negative result.

Appellant’s Case 8. Appellant’s case is premised on his Statement of Facts dated 3rd February 2023 and filed on 27th February, 2023.

9. The Appellant averred that he had made his return to date.

10. The Appellant averred that the e-return acknowledgement for the month of December 2023 was negative.

Appellant’s Prayer 11. The Appellant prayed to the Tribunal that the assessed tax be revised to nil to allow the taxpayer concentrate on the current tax matters.

Issues for Determination 12. Whereas there is evidence that the Respondent was served with the Appellant’s Notice of Appeal, the Appeal was undefended. The Tribunal however proceeded to determine the matter based on the Appellant’s pleadings.

13. The Tribunal upon due consideration of the Appellant’s pleadings was of the view that the issues that crystalized for its determination were:a.Whether there was a valid Appeal before the Tribunal.b.Whether the Respondent erred in its assessment of VAT on the Appellant.

Analysis and Determination 14. Having identified the issues for determination, the Tribunal proceeds to analyse them as hereunder:-a.Whether there was a valid Appeal before the Tribunal.

15. The disputed tax decision was issued on 5th January 2023, the Appellant lodged his Appeal at the Tribunal on 27th February 2023 which is approximately 22 days beyond the 30 day statutory timeline for filing of appeals to the Tribunal.

16. Section 13 of the Tax Appeals Tribunal Act provides as follows regarding the procedure of filing of Appeals to the Tribunal;“Procedure for appeal(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; and(c)the tax decision.” (Emphasis added)

17. A taxpayer who defaults in lodging an Appeal within the statutory timeline has the legal remedy to seek for leave from the Tribunal to lodge the same out of time. This is provided for under Section 13 (3) and (4) of the Tax Appeals Tribunal Act which states as follows:-“(3)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).(4)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 filing the notice of appeal or submitting the documents within the specified period.”

18. A perusal of the Appeal documents lodged by the Appellant indicates that the Appellant did not seek for leave for the enlargement of time from the Tribunal.

19. The Tribunal is bound to uphold the strict statutory timelines provided by law to any party. The High Court in emphasizing the strict application of statutory timelines had this to say in Equity Group Holdings Limited -Vs- Commissioner of Domestic Taxes 2021 (eKLR):-“A statutory edict is not procedural technicality. It’s a law which must be complied with. Parliament in its wisdom expressly and in mandatory terms provided………”

20. The Tribunal was of the view that the Appellant could not found an appeal against the tax decision out of time without applying to the Tribunal for enlargement of time. In the light of the foregoing circumstances the Appeal lodged by the Appellant is found to be invalid.

21. Having found that the Appeal is invalid, the Tribunal will not delve into the substantive issue in the Appeal as the same has been rendered moot.

Final Decision 22. Based on the foregoing analysis the Tribunal determines that the Appeal is incompetent and unsustainable in law. The Orders that accordingly recommend themselves to the Tribunal are as follows:-i.The Appeal be and is hereby struck out.ii.Each party to bear its own costs.

23. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 24THDAY OF MAY, 2024. ERIC NYONGESA WAFULA - CHAIRMANDR. RODNEY O. ODHIAMBO - MEMBERCYNTHIA B. MAYAKA - MEMBERABRAHAM K. KIPROTICH - MEMBERTIMOTHY B. VIKIRU - MEMBER