[2023] KETAT 613 (KLR)

Ondieki v Commissioner of Domestic Taxes (Miscellaneous Application E096 of 2023) [2023] KETAT 613 (KLR) (19 October 2023) (Ruling)

Neutral citation: [2023] KETAT 613 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Application E096 of 2023

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

October 19, 2023

Between

Benedict Simeon Ondieki

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Application which was by way of a Notice of Motion dated 25th July 2023 and filed on 2nd August 2023 is supported by an Affidavit sworn by the Appellant, Benedict Simeon Ondieki, on the 25th July, 2023 seeks for the following Orders:-a.Spent.b.The intended Appellant/Applicant be granted an extension of time with regard to filing Notice of Appeal and Memorandum of Appeal to this Honourable Tribunal.c.The cost of the application be in the cause.d.This Honourable Tribunal be pleased to issue any such orders as it deems just and expedient.

2. The application is premised on the following grounds, that:-a.The Applicant was ill and was under home care-based remedy for months.b.The Applicant learned of the same this month after he assessed his emails and iTax ledger.c.The intended Appellant/Applicant has approached this Honourable Tribunal at the earliest juncture.d.Failure to file a Notice of Appeal within the stipulated timelines is a result of factors beyond the Applicant’s control as he is located upcountry and was unable to access iTax, emails, and was following up on his health.

3. Given that the Applicant did not file his submissions, the Tribunal will rely on the pleadings and accompanying documents attached thereto filed by the Applicant to determine the totality of his case.

Response to the Application 4. The Respondent filed a Replying Affidavit sworn by Abdub Matoye on 24th August 2023 and filed on 25th August 2023 citing the following as the grounds for opposition:-a.That on 26th August 2021 the Respondent wrote to the Applicant informing him of the tax investigation findings thus granting the Applicant 7 days to submit his response and supporting documentation failure to which the Respondent would issue amended assessments.b.That on 10th November 2021 the Respondent wrote to the Applicant informing him of the updated tax investigation findings and granted the Applicant 14 days to submit his response and supporting documentation failure to which the Respondent would issue amended assessments.c.That on 25th February 2022 the Respondent issued upon the Applicant Additional Value Added tax assessments for the period December 2017, December 2018, December 2019, and December 2020. d.That on 1st July 2022 the Respondent further issued upon the Appellant additional Income tax assessments for the tax years 2017 to 2020. That the Applicant lodged an Objection to the additional assessments on 6th April 2022 failing to avail documentation in support of the Objection contrary to Section 51(3) of the Tax Procedures Act 2015. e.That the Respondent invalidated the Appellant’s Objection on 25th April 2022 and confirmed the taxes as assessed on 22nd July 2022. That the Applicant is yet to provide the documents to the Respondent for consideration.f.That the Applicant failed in lodging his appeal within stipulated timelines as the invalidation decision notice was issued more than one year and four months ago.g.That the Applicant indicates that he had been unwell and thus delayed in lodging the Appeal and only provided clinical notes that do not sufficiently address the allegation that he was indisposed for a period of over one year which ordinarily would be addressed by comprehensive discharge letter or a doctor’s letter of the same.h.That the Respondent will suffer great prejudice if the application is granted as this will delay the collection of taxes which is the main mandate of the Respondent, hence delayed service to all Kenyan citizens.i.That the Applicant has not demonstrated in any way that it has arguable appeal with any chances of success.j.That the Applicant has not met the established threshold for the Tribunal to exercise its discretion in granting leave to file an appeal out of time.k.That the Applicant has shown that it is indolent or does not have an interest in appealing the decision of the Respondent.l.That the application herein is incompetent, frivolous, without merit, and an abuse of the powers of this Honourable Tribunal.

Respondent’s submissions On whether the Applicant’s Application offends/flaunts the statutory provisions of Section 13 of the Tax Appeals Tribunal Act 2015 5. The Respondent cited Section 13(1) and (2) of the Tax Appeals Tribunal Act and submitted that the Applicant has not complied with the law.

6. It relied on the case of Naomi Gitonga & 3 Others v Independent Electoral and Boundaries Commission & 17 Others [2018] eKLR where the Supreme Court, in citing the case of Nicholas Kiptoo Arap Korir v Independent Electoral and Boundaries Commission and 7 Others [2014] eKLR reiterated that:-“A Notice of Appeal is a primary document to be filed outright whether or not the subject matter under appeal is that which requires leave or not. It is a jurisdictional pre-requisite.”

7. It further cited the following cases.a.Barclays Bank of Kenya Limited v Commissioner General and Another (1998) eKLR- "No appeal shall be filed unless a m emorandum of appeal is presented to the Registrar during office hours, and a copy served upon the respondent, within 30 days after the date of service upon the respondent of a notice of appeal under section 86 (2); but where the Court is satisfied that, owing to absence from Kenya, sickness, or other reasonable cause, the appellant was prevented from presenting the memorandum of appeal within that period and that there has been no unreasonable delay on his part, the Court may extend that period."b.Northern Province Labour Utilisation Board v The Commissioner of Income Tax [1960] EA 1015-

8. The Respondent asserted that in order for the Applicant to succeed, he must satisfy the Honourable Tribunal that owing to sickness or other reasonable cause; he was prevented from presenting his Memorandum of Appeal within the permitted period and there was no unreasonable delay on his part.

9. It further asserted that the Applicant had 30 days from the date of the Commissioner’s decision to file a Notice of Appeal. The intended Appeal is an afterthought as it has been brought up more than one year and three months after the Respondent issued the Appellant with the invalidation decision.

On whether there are reasonable circumstances demonstrated to warrant an order for enlargement of time 10. The Respondent cited Section 13(3) and (4) of the Tax Appeals Tribunal Act and Rule 10 of the Tax Appeals Tribunal (Procedure) Rules 2015 and the case of Income Tax Appeal No. 31 of 2017 Commissioner of Domestic Taxes v Mayfair Insurance Company Limited (2017) eKLR where the court held that:-“One of the reasons stated under the Rule is that the court may extend time where there is reasonable cause for the delay.Effectively, the court’s powers and discretion to extend time is unlimited. It is however not to be capriciously exercised. Time, in other words, is not to be extended as a matter of right. Each case is to be viewed sui generis and on its own circumstances and facts. The starting point is that the Applicant ought to advance sufficient and reasonable grounds for any delay on its part.”

11. It contended that equity aids the vigilant and not the indolent. It added that the Applicant has no plans of settling its tax arrears and instituting these proceedings is a delay tactic and the Applicant’s reason for failing to file an appeal in time is insubstantial.

Analysis And Findings 12. 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.

13. In determining whether to extend time, the Tribunal was guided by the decision 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.”

14. The Tribunal, 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 the application:-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?d.Whether there will be prejudice suffered by the Respondent if the extension is granted?

Whether there is a reasonable cause for the delay 15. 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.”

16. The Applicant submitted that he was ill and was under home care-based remedy for months and learned of the same this month after he accessed his emails and iTax ledger.

17. The Respondent contended that the Applicant only provided clinical notes that do not sufficiently address the allegation that he was indisposed for a period of over one year which ordinarily would be addressed by a comprehensive discharge letter or a doctor’s letter of the same.

18. The Tribunal has perused the Applicant’s pleadings and documentary evidence and has observed that whereas the Applicant has provided medical records indicating that he was unwell, the clinical notes provided show that he went to the hospital in March, May, and June of 2022.

19. The Tribunal also observes that the notes do not indicate that the Applicant was kept in home-based care as averred in his pleadings. There was nothing to indicate his incapacity or inability to tend to his business and for how long he was indisposed.

20. It is therefore the Tribunal’s finding that the reasons tendered by the Applicant have not been satisfactorily established to be a reasonable cause for the delay to the Tribunal.

Whether the Appeal is merited? 21. Having found as above, the Tribunal finds no reason to analyse the remaining criteria as the same are rendered moot.

Disposition 22. The Tribunal in the circumstances finds the application is not meritorious and finds in favour of the Respondent and accordingly proceeds to make the following Orders:-a.The application for the extension of time is hereby dismissed;b.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 19TH DAY OF OCTOBER, 2023ERIC NYONGESA WAFULACHAIRMANELISHAH N. NJERUMEMBERMUTISO MAKAUMEMBEREUNICE N. NG’ANG’AMEMBERABRAHAM K. KIPTROTICHMEMBER