[2023] KETAT 978 (KLR)

Medinova Surgical Supplies Co. Ltd v Commissioner of Domestic Taxes (Miscellaneous Application E601 of 2023) [2023] KETAT 978 (KLR) (11 December 2023) (Ruling)

Neutral citation: [2023] KETAT 978 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Application E601 of 2023

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

December 11, 2023

Between

Medinova Surgical Supplies Co. Ltd

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The application which was by way of a Notice of Motion dated 18th September 2023 and filed under a certificate of urgency on 19th September 2023 was supported by an Affidavit sworn by the Applicant‘s director, Freda Hassan, on the 18th day of September, 2023, sought for the following Orders:-a.Spentb.That he Tribunal be pleased to review the Respondent’s assessment of its tax obligation out of time.c.That pending the inter-partes hearing and determination of this application and/or petition herein, the Honourable Tribunal be pleased to request the Respondent to issue a Tax Compliance Certificate for continuity of business operations.d.That the Memorandum of Appeal, Notice of Appeal, and Statement of Facts annexed hereto be deemed as filed upon payment of the requisite court fees.e.That consequent to the grant of the prayers above, the Honourable Tribunal be pleased to issue such further directions and orders as may be necessary to give effect to the foregoing orders and or favour the cause of justice.f.The costs of this application be provided for.

2. The application was premised on the following grounds, that:-a.The Respondent’s assessment of 9th May, 2022 in respect of the Applicant’s tax obligation was wrong as it did not take into account the Applicant’s line of business and is therefore exaggerated and hence null and void.b.Despite the Applicant engaging the Respondent’s officer on the matter the officer went ahead and levied the wrong figures in the taxpayer’s iTax ledger without regard to the engagement.c.The Appellant was in the business of medical/surgical supplies which are majority exempt and zero rated or minimal vatable for the period under review for 2017. d.The Respondent took its time out of the engagement (May to October 2022) on the premise that it was consulting and would revert to the Appellant only to levy the excess assessment in the Appellant’s iTax ledger on 27th October, 2022. e.The Appellant obliged and applied for the Objection on 29th November, 2022 giving reasons for the disputed amount.f.The Respondent continued to allege that the Objection was not validly lodged as required by Section 51(2) of the Tax Procedures Act 29 of 2015 and that it was not lodged within the stipulated timelines, which the Appellant denies to be true considering the fact that the assessment was raised on 27th October, 2022, and the Objection Application on 26th November, 2022. g.The Appellant has engaged the Respondent and made a payment plan on 26th November, 2022 on the undisputed assessed taxes amounting to Kshs. 2,619,255. 00 which complies with Section 52(2) of the TPAwas to end in June 2023. h.This application and Appeal will be rendered nugatory if the orders sought herein are not granted.i.The Applicant believes it has established a prima facie case.j.The Respondent will suffer no prejudice if the orders are granted.k.Granting the orders sought herein will advance the cause of justice.l.Granting the orders is not determinative of the Appeal.m.The balance of convenience favors the granting of the orders sought in this application.n.The Honourable Court has unfettered powers to make the orders sought.o.It is meet and just for purposes of justice and equity and the overarching purpose of constitutional integrity and rule of law to grant the orders sought.

3. The Respondent did not file any response to suggest its being opposed to the application. The Tribunal is left with no option but to pronounce itself on the merits of the case from the Applicant’s position.

Analysis and Findings 4. The Tribunal is enjoined to determine the length and reason for the delay when considering an application for the extension of time to appeal out of time. The power to extend time is discretionary and unfettered but the same must be exercised judiciously and it is not a right to be granted to the Applicant.

5. In determining whether to extend time, the Tribunal is guided by the decision of the court in the case of Leo Sila Mutiso -vs- Rose Hellen Wangari Mwangi - Civil Application No. Nai. 255 of 1997 (unreported), where the Court expressed itself as thus:-“It is now well settled that the decision whether or not to extend the time for appealing is essentially discretionary. It is also well settled that in general the matters which this court takes into account in deciding whether to grant an extension of time are: first, the length of the delay; secondly, the reason for the delay; thirdly (possibly), the chances of the appeal succeeding if the application is granted; and, fourthly, the degree of prejudice to the respondent if the application is granted.”

6. The Tribunal is further guided by the principles set out in John Kuria v Kelen Wahito, Nairobi Civil Application Nai 19 of 1983 April 10, [1984] where the court used the following criteria to consider an application for the enlargement of time:-a.Whether there is a reasonable cause for the delay?b.Whether the appeal is merited?c.Whether the application for extension has been brought without undue delay?a.Whether there will be prejudice suffered by the Respondent if the extension is granted?

Whether There Is A Reasonable Cause For The Delay? 7. In considering what constitutes a reasonable reason for the delay, the court in Paul Wanjohi Mathenge v Duncan Gichane Mathenge [2013] eKLR, held that:-“...it is clear that the discretion to extend time is indeed unfettered. It is incumbent upon the applicant to explain the reasons for delay in making the application for extension and whether there are any extenuating circumstances that can enable the Court to exercise its discretion in favour of the applicant.”

8. The Applicant submitted that the delay in approaching this Honourable Tribunal for redress was that after the Respondent communicated the Objection decision on 23rd January, 2023, the accountant did not bring it to the attention of the directors and that the information flow of transmitting the Objection decision caused the delay in noticing and delay in filing the appeal within the statutory timeline.

9. The Tribunal has perused the Applicant’s Affidavit and the documentary evidence and has found that the Applicant has not adduced any evidence to support its averments as to how the lapse in the information flow was occasioned by the Applicant’s accountant.

10. It is therefore the Tribunal’s finding that the reason tendered by the Applicant has not been satisfactorily established to be a reasonable cause for the delay in the filing appeal to the Tribunal.

11. Having found as above, the Tribunal finds no need to lend itself to the remaining criterion for extension of time as the same are rendered moot.

Disposition 12. The Tribunal in the circumstances finds the application to be lacking in merit and the Orders that accordingly commend themselves to the Tribunal are as follows:-a.The application be and is hereby dismissed;b.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 11TH DAY OF DECEMBER 2023……………………………………ERIC NYONGESA WAFULACHAIRMAN……………………………………ELISHAH N. NJERUMEMBER……………………………………MUTISO MAKAUMEMBER……………………………………EUNICE N. NG’ANG’AMEMBER……………………………………ABRAHAM K. KIPTROTICHMEMBER