[2024] KETAT 471 (KLR)

Paramount Assessors Limited v Commissioner of Domestic Taxes (Tax Appeal 837 of 2022) [2024] KETAT 471 (KLR) (19 April 2024) (Ruling)

Neutral citation: [2024] KETAT 471 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal 837 of 2022

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

April 19, 2024

Between

Paramount Assessors Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Appellant moved the Tribunal vide the Notice of Motion application dated 13th December 2023 and filed on 14th December 2023 and supported by an Affidavit sworn by Clement Wasike, a Director of the Applicant, on the 13th December, 2023, seeking the following Orders: -a.Spent.b.That the Honourable Tribunal be pleased to reinstate an Appeal filed before it on 11th August 2022 under TAT 837 of 2022. c.That consequently, the Statement of Facts, Memorandum of Appeal and Tax decision be deemed to remain the same as were stated and filed in the said Appeal.d.That the Applicant be at liberty to apply for further orders/directions as the Honourable Tribunal may deem just to grant.e.That costs to this application be in the cause.

2. The application is premised on the grounds, that: -i.The Appellant withdrew the original Objection filed before the Tribunal on 22nd October 2022 based on the advice from the Respondent’s officers in Nakuru Office.ii.The Directors held a meeting with the Respondent’s team in Nakuru in order to obtain a tax compliance certificate in the meeting, the Respondent accepted to engage the Applicant with a view to resolve the tax dispute through her internal alternative dispute resolution mechanisms.iii.The Appellant believed the outcome of that engagement would be amicable one based on the facts and evidence provided to the Respondent.iv.The Appellant is confused given that the figures of the principal tax liability as arrived at through an Objection decision delivered by the Respondent on 1st November 2022 and that computed during drafting of a payment plan on 18th November 2023 do not agree.v.In the first case, the Respondent had computed a principle tax liability of Kshs. 1,633,997. 00 and in the second case, the principal liability was given as Kshs. 3,640,578. 35. vi.This application has not been brought after undue delay.vii.The Respondent will not suffer any prejudice if the orders sought are granted.viii.In the interest of justice and fairness that the application is allowed to pave way for hearing and determination of the Appeal on the merits.

3. The Respondent did not file any response or challenge to the instant application and therefore the application shall be deemed as unopposed.

4. The Applicant/Appellant in its written submissions dated and filed on 10th January 2024, submitted as herein under;

5. The Appellant submitted that whereas the Appellant was served with an Objection decision on 21st November 2022 which showed the principal tax liability was Kshs. 1,633,997. 00, the Respondent went ahead to draw a payment plan on 18th October 2023 which has a different figure.

6. The Appellant submitted that it moved the Honourable Tribunal and withdrew its Appeal on 22nd October 2022 on advice of the Respondent in relation to TAT Appeal No. 837 of 2022.

7. The Appellant relied on Section 51 (8), (9) and (10) of the Tax Procedures Act.

8. The Appellant submitted that the action by the Respondent to change the principal tax liability at the time of drawing a payment plan for the Appellant on 18th October 2023 amounted to an amendment of the tax decision reached by the Respondent on 21st November 2022 which ought to have been communicated to Appellant. Additionally, the tax decision should have been communicated to the Appellant within 60 days provided under Section 51 (11) of the Tax Procedures Act, thus the variation done on 18th October 2023 is deemed to have been invalid.

9. The Appellant submitted that the Respondent would not suffer any prejudice if the orders sought are granted.

10. The Appellant relied on the decision in Eastleigh Mall Limited vs. Commissioner of Investigations & Enforcement Appeal (No. E0686 of 2020).

11. The Respondent did not file any submissions for the Tribunal’s consideration.

Analysis and Findings 12. The Appellant filed an Appeal in TAT Appeal No. 837 of 2022 on 11th August 2022 challenging the Respondent’s decision rendered on 22nd April 2022. That prior to the hearing of the Appeal, the Appellant in exercise of the provision of Section 27 (1) of the Tax Appeals Tribunal Act, 2013 moved the Tribunal and withdrew its Appeal on 22nd October 2022, which withdrawal was adopted as an order of the Tribunal.

13. As narrated by the Appellant, the motivation for the withdrawal of the Appeal was pegged on an ongoing engagement with the Respondent with a view of settlement of the tax dispute.

14. The instant application seeks to reinstate its Appeal for hearing and determination in TAT Appeal No. 837 of 2022.

15. The process of withdrawal and reinstatement of Appeals before the Tax Appeals Tribunal is anchored in the provisions of Section 27 of the Tax Appeals Tribunal Act, 2013.

16. Section 27 (1) of the Tax Appeals Tribunal Act, provide that:“An appellant may, by notice in writing or through electronic means, withdraw the appeal.”

17. Further, Section 27 (5) of the Tax Appeals Tribunal Act, 2013 relating to reinstatement of Appeals, provides as thus:-“Where the Tribunal dismisses an appeal under subsection (2) or (3), or upholds an appeal under subsection (4), the appellant or respondent may, within thirty days from the date of receipt of the notice of the decision, apply to the Tribunal for reinstatement of the appeal, and the Tribunal may, if it considers it appropriate to do so, reinstate the appeal and give such directions as may be appropriate.”

18. Of importance to the proceedings herein is that the Appeal was withdrawn under the Appellant’s volition on 22nd October 2022 pursuant to Section 27 (1) of the Tax Appeal Tribunal Act, what then is the effect of the Appellant’s deliberate act and the adoption of the same by the Tribunal.

19. The action of withdrawal of an Appeal was well within the Appellant’s unfettered right, the Appellant is at liberty to withdraw its Appeal without the prior authority or consent of anyone and such a right cannot be abridged.

20. The effect of the withdrawal of the Appeal by the Appellant was that the Appeal was wholly terminated, at the point of adoption of the order, there were no issues left for the Tribunal to exercise its jurisdiction over. Any pending issues in the dispute (if any) would be dealt with at another forum.

21. Our interpretation of the provisions of Section 27 (5) of the Tax Appeals Tribunal Act is that this Tribunal is seized with the jurisdiction to reinstate Appeals that have been dismissed by the Tribunal under subsection (2) or (3), or an Appeal upheld under subsection (4). There exists no provision to reinstate an Appeal that has been withdrawn by a party under subsection (1).

22. The Appellant’s action of withdrawal of the Appeal, acted to its own detriment and as alleged on advice from the Respondent, it shot itself on the foot. Whereas the action prejudiced its Appeal and as much as the Tribunal may commiserate with the Applicant, the Tribunal can only function within the confines of the law.

23. The Tribunal is guided by the case of Priscilla Nyambura Njue vs. Geovhem Middle East Ltd; Kenya Bureau of Standards (Interested Party) [2021] eKLR, in which Mativo J (as he was then), held;“The withdrawal is complete or effective as soon as it takes place. The right to revoke the withdrawal can only be allowed by the legislature by expressly providing so in the rule and not by the courts. In the same vein, the rules do not confer the court with power to reinstate a suit once withdrawn.”

24. It is the Tribunal’s finding that once an Appeal is withdrawn under Section 27 (1) of the Tax Appeals Tribunal Act, adopted as an order of the Tribunal, it cannot be reinstated, unless under a manner provided by law, the law does not make such a provision.

25. Consequently, the application is unmerited and therefore fails.

Disposition 26. The upshot of the foregoing, is that the Tribunal finds that the application dated 13th December 2023 is unmeritorious and accordingly makes the following orders: -a.The application be and is hereby dismissed.b.No orders as to costs.

27. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 19TH DAY APRIL, 2024ERIC NYONGESA WAFULA..........CHAIRMANMUTISO MAKAU..................MEMBERELISHAH N. ....................MEMBEREUNICE N. NG’ANG’A..............MEMBERABRAHAM K. KIPROTICH ..............MEMBER