[2021] KEHC 13253 (KLR)
The court found that it has jurisdiction and discretion to grant a stay of execution pending appeal to prevent the appeal from being rendered nugatory. In exercising this discretion, the court must balance the Appellant's right to appeal with the Respondent's right to enforce the judgment. The court determined that...
Source-derived case information.
- Citation
- [2021] KEHC 13253 (KLR)
- Parties
- Appellant: Mary Wanjiru Kinyua; Respondent: Commissioner of Investigations and Enforcement
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Tax Appeal E116 of 2021
- Procedural Posture
- Tax Appeal / Ruling on Stay Application Pending Appeal
- Outcome
- Stay of execution granted on condition of provision of bank guarantee; Agency Notice to be lifted upon compliance; costs in the appeal.
- Judges
- DAS Majanja
- Legal Topics
- Stay of Execution, Security for Costs, Tax Assessment Dispute, Agency Notice, Appeals Process
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Mary Wanjiru Kinyua
Appellant
Commissioner of Investigations and Enforcement
Respondent
Procedural Posture
Tax Appeal / Ruling on Stay Application Pending Appeal
Legal Issues
- 1 Whether the court should grant a stay of execution of the Tax Appeals Tribunal's judgment pending appeal.
- 2 Whether the Appellant should provide security as a condition for stay.
- 3 Whether the Agency Notice on the Appellant's bank account should be lifted.
Ratio Decidendi
The court found that it has jurisdiction and discretion to grant a stay of execution pending appeal to prevent the appeal from being rendered nugatory. In exercising this discretion, the court must balance the Appellant's right to appeal with the Respondent's right to enforce the judgment. The court determined that a stay should be granted, but only on condition that the Appellant provides a bank guarantee of KES 10,000,000 from a reputable bank in favour of the Respondent within thirty days. Upon provision of this security, the Agency Notices issued by the Respondent are to be lifted unconditionally. Failure to comply with the condition would result in the discharge of the stay order....
Court Disposition
Stay of execution granted on condition of provision of bank guarantee; Agency Notice to be lifted upon compliance; costs in the appeal.
Orders
- An order of stay is issued staying execution of the Tribunal's judgment and any further enforcement pending appeal or further court orders.
- The Appellant shall provide a bank guarantee for KES 10,000,000 from a reputable bank in favour of the Respondent within thirty days, upon which the Agency Notices shall be lifted unconditionally.
Full Case Text
Judgment text and source record
26 paragraphs
IN THE HIGH COURT OF KENYA AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL AND TAX DIVISION
CORAM: D.S. MAJANJA J.
TAX APPEAL NO. E116 OF 2021
BETWEEN
MARY WANJIRU KINYUA ..........................................................................APPELLANT
AND
COMMISSIONER OF INVESTIGATIONS AND ENFORCEMENT....RESPONDENT
(Being an appeal against the judgment of the Tax Appeals Tribunal at Nairobi dated 18th June 2021 in Tax Appeal No. 395 of 2019 )
RULING
1. On 18th June 2021, the Tax Appeals Tribunal (“the Tribunal”) dismissed the Appellant’s appeal and affirmed the Commissioner’s tax assessment of Kshs. 163,897,497. 00 it issued to the Appellant. The Appellant, having been dissatisfied with this decision, has lodged an appeal to this court. The Appellant has also moved the court by the Notice of Motion dated 5th July 2021 in which she seeks a stay of execution and enforcement of the Tribunal’s judgment and that the Agency Notice dated 7th June 2021 imposed on the Appellant’s account with Equity Bank be lifted, pending hearing and determination of the appeal. The application is supported by the grounds set out on its face and the Appellant’s affidavit sworn on 21st June 2021.
2. The Respondent (“the Commissioner”) has opposed the application through the Grounds of Opposition dated 21st July 2021. The parties have also filed brief written submissions in support of their respective positions.
3. The jurisdiction of this court to grant orders of stay pending appeal under Order 42 Rule 6 of the Civil Procedure Rules in order to secure the substratum of the appeal is not in doubt. The power to grant stay pending appeal is discretionary and must be exercised in such a way that the appeal is not rendered nugatory. It is to be exercised having regard to the circumstances of the case and having regard to the fact that the Appellant is entitled to exercise her statutory right of appeal while the Commissioner is entitled to the fruits of its judgment, in this case to collect the taxes to be paid by the Appellant (seeKeroche Breweries Limited v Commissioner of Domestic Taxes ML HC ITA E012 of 2020 [2020] eKLR,and Superior Homes (Kenya) Limited v Musango Kithome MKS HC Civil Appeal No. 91 of 2017 [2018] eKLR).
4. I have considered the respective arguments put forth by both sides. The Commissioner posits that should this Court be convinced to grant the Appellant stay; this Court should direct the Appellant to provide security for the taxes which have been found due by a competent Tribunal.
5. In the circumstances of this case, I now grant the following reliefs:
(a) An order of stay be and is hereby issued staying execution of the Judgment of the Tax Appeal Tribunal dated 18th June 2021 in Tribunal Appeal No. 295 of 2019 and any further enforcement action thereon pending the hearing and determination of this appeal or until further orders of the court.
(b)In consideration of the stay in (a) above, the Appellant shall provide a Bank Guarantee for KES. 10,000,000. 00 from a reputable bank in favour of the Respondent within thirty (30) days from the date hereof whereupon the Agency Notices issued by the Respondent shall be lifted unconditionally.
(c)In default of compliance with the terms aforesaid, the order of stay shall stand discharged.
(d)The costs of this application shall be in the appeal.
(e)The court shall adjourn to issue directions for the hearing and determination of the appeal.
DATED AND DELIVERED AT NAIROBI THIS 30TH DAY OF JULY 2021.
D. S. MAJANJA
JUDGE
Mr Kabugu instructed by Kabugu and Company Advocates for the Appellant.
Mr Wairire, Advocate instructed by Kenya Revenue Authority for the Commissioner of Investigations and Enforcement.