[2025] KETAT 61 (KLR)

Nyawira v Commissioner of Domestic Taxes (Tax Appeal E1054 of 2024) [2025] KETAT 61 (KLR) (24 January 2025) (Ruling)

Neutral citation: [2025] KETAT 61 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E1054 of 2024

RO Oluoch, Chair, G Ogaga & Cynthia B. Mayaka, Members

January 24, 2025

Between

Jayne Wangui Nyawira

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Respondent vide a Notice of Preliminary Objection dated 31st October 2024 sought orders that the Appellant’s Appeal be struck out for offending mandatory provisions of Sections 51 and 52 of the Tax Procedures Act(TPA) and Sections 12 and 13 of the Tax Appeals Tribunal Act.

2. The Notice of Preliminary objection is premised on the following grounds, that:-a.The Tribunal lacks jurisdiction to hear the Appeal.b.The Appeal is fully defective as it has been filed contrary to Sections 51 and 52 of the Tax Procedures Act as read together with Sections 12 and 13 of the Tax Appeals Tribunal Act which stipulate the period for filing an appeal and the requirements for extension of time to file an appeal out of time.c.The Appellant failed to seek leave of the Tribunal before instituting this Appeal and as such its Appeal is incompetent and should be struck out for failing to comply with the mandatory provisions of the law.d.Section 13 (1) (b) of the Tax Appeals Tribunal Act makes it mandatory for the Appellant to serve the Respondent with a Notice of Appeal within thirty days upon receipt of the decision of the Respondent and this was not done.e.That Section 13(5) of the TAT Act makes it mandatory for the Appellant to serve a copy of the Appeal on the Respondent within two days after giving Notice of Appeal to the Tribunal and this was not done.f.That the Appeal is hence invalid and the Tribunal lacks jurisdiction to hear and determine the Appeal herein.g.That the Appeal is bad in law and amounts to an abuse of the Tribunal’s process, violates express provisions of the TPA and TAT Act and should thus be dismissed with costs to the Respondent.

3. The Appellant opposed the Notice of Preliminary Objection vide a Replying affidavit sworn by Martin Mumo Mbiti, Auditor for the Appellant, on the 12th November 2024 and filed on the 13th November, 2024 wherein the Appellant stated that the Preliminary Objection is an abuse of the Tribunal’s process based on the following grounds:i.That the Commissioner issued a tax decision via the tax Verification Report for the Period January 2020 to December 2022 dated 23rd April 2024. ii.That the Appellant objected to the tax decision of 23rd April 2024, which said objection was partially accepted via an Objection decision from the Commissioner dated 25th July 2024. iii.That the Appellant sought to appeal the Objection decision which is an appealable decision under Section 52 of the TPA.iv.That on 21st August 2024 at 5:20 PM, the Appellant served the Respondent and the Tax Appeals Tribunal with a Notice of Appeal.v.That on 22nd August 2024 at 9:17 AM, Mrs. Sheilla Tonui, at the Tribunal’s Secretariat, acknowledged receipt of the duly filed Notice of Appeal.vi.That on 23rd August 2024 at 1:35 PM, the Tribunal shared a duly received Notice of Appeal via email address as well as the Respondent’s.vii.That the Appellant filed a notice of extension of time to appeal dated 23rd August dated 23rd August 2024 in line with Rule 10 of the Tax Appeals Tribunal (Procedure) Rules and proceeded to serve the said notice upon the Respondent and the Tribunal via email on 23rd August 2024 at 4:01 PM.viii.That the Tribunal’s secretariat Mrs. Sheilla Tonui acknowledged receipt of the notice via email on 26th August 2024 at 10:11 AM.ix.That the Respondent was duly served with the notice under Paragraph 3 (c)(iv) in line with the provisions of Section 13 of the Tax Appeals Tribunal Act.x.That the Respondent did not oppose the application for an extension of time to file the Appeal.xi.That the Notice of Appeal was filed on 23rd September 2024 within the prescribed timelines and as per the extension of time set out by the Appellant’s notice of extension of time to Appeal in line with Section 13 (3) and (4) of the Tax Appeals Tribunal Act.xii.That the Appellant sought an extension of time due to her indisposition and attached the requisite medical report to her application.xiii.That the ground of illness is not only reasonable but provided for in law, connoting her physical impediment preventing making the Notice of Appeal within the permitted period as was affirmed in the case of Barclays Bank of Kenya Limited v. Commissioner general and Another 1998) eKLR.xiv.That the Appeal was filed within the prescribed timelines, courtesy of the notice of extension of time and the Tribunal hence has the jurisdiction to hear and determine the Appeal.xv.That under Section 3 of the Tax Appeals Tribunal Act, the Tribunal is established and donated with the power ‘to hear appeals filed against any tax decision made by the commissioner.’xvi.That the Appellant filed an appeal of an appealable decision to the Tribunal within the statutory timelines, upon exhaustion of procedures laid out under Section 51 of the TPA.xvii.That Section 13 of the Tax Appeals Tribunal Act specifically stipulates the process and timelines for filing a competent appeal echoing the reasoning in Salsa Global Investment Co. Ltd v Commissioner of Domestic Taxes [2023] KETAT 164 (KLR);xviii.That this matter thus falls within the jurisdictional remit of the Tribunal considering that it was filed in compliance with statutory procedures and has met the threshold set in Samuel Mwaura Muthumbi v Josephine Wanjiru Ngugi & Another [2018] eKLR.xix.That the allegations of non-service of the Appel are neither merited nor fundamental to the Appeal at this stage and point in time.xx.That the essence of justice should not be overshadowed by rigid adherence to procedural requirements as was stated in the case of Okoth Obado v Edward Akong’o Oyugi &2 Others (2014) eKLR.

Analysis and Findings 4. The purport of the Notice of Preliminary Objection is primarily for the striking out of the Appeal on grounds that it was filed out of time and contrary to Sections 51 and 52 of the TPA and Sections 12 and 13 of the TAT Act. Its alternative argument is that if the Appeal was filed in time then the same was not served on it as is required by law.

5. On the other hand, the Appellant asserted that it filed and served its Notice of Appeal in time. It also stated that it sought and obtained leave to file its Appeal out of time.

6. Section 13(1) of the TAT Act provides as follows, regarding the procedure for filing an Appeal to the Tribunal:“A notice of appeal to the Tribunal shall—a.be in writing or through electronic means;b.be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner.”

7. The law thus requires the Appellant to file its Appeal to the Tribunal within 30 days of receipt of the Respondent’s decision.

8. The common facts to this case are that the Respondent issued its Objection decision on 25th July 2024 and that the Appellant’s Notice of Appeal was stamped as having been received by the Tribunal on 22nd August 2024 at 5. 20 PM.

9. The Appellant was required to file its Appeal on or before the 24th of August 2024. Her Appeal was thus filed in time and it thus constitutes a valid Appeal.

10. The Respondent moved this Tribunal by way of a Notice of Preliminary Objection. As such it was required to premise its preliminary objection arguments on settled and crisp points of law, these points of law should be supported by undisputed facts. The moment the Respondent starts relying on facts in dispute it would mean that the issue it has raised cannot be determined by way of a preliminary Objection. This position was affirmed in the precedent-setting case, Mukisa Biscuit Manufacturing Co. Ltd vs. West End Distributors (1969) EA 696: where the court stated thus regarding Preliminary objections:“A preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court a plea of limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration … a preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.”

11. Accordingly, the issue of service of the copy of the Appeal is in dispute. The Appellant asserts that it was never served on one hand and the Respondent asserts that it was served on the other hand. The facts leading to this determination are disputed and cannot therefore be determined by way of a Notice of Preliminary Objection. Indeed such an action would lead to the condemnation of one party without giving it a chance to present its evidence to help the Tribunal determine this issue which is in dispute. This is the reason why it has always been stated that a Preliminary Objection can never be used as a sword as elucidated in the case of Independent Electoral & Boundaries Commission v Cheperenger & 2 others (Civil Application 36 of 2014) [2015] KESC 2 (KLR) (15 December 2015) (Ruling), where the court stated thus:“It is distinctly improper for a party to resort to the preliminary objection as a sword, for winning a case otherwise destined to be resolved judicially, and on the merits.”

12. In the circumstances, it would only be fair that this issue of service be determined during the hearing of the Appeal when both parties will have a chance to present evidence to defend their position on merits.

Disposition 13. The foregoing analysis thus leads the Tribunal to the conclusion that the Respondent’s Notice of Preliminary Objection lacks merit and it hence proceeds to make the following Orders:-a.The Notice of Preliminary Objection dated October 31, 2024 be and is hereby dismissed.b.No orders as to costs.

14. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 24TH DAY OF JANUARY, 2025. DR RODNEY O. OLUOCHCHAIRPERSONGLORIA A. OGAGA CYNTHIA B. MAYAKAMEMBER MEMBER