[2025] KETAT 13 (KLR)

Rajchem Polymers Limited v Commissioner of Customs and Border Control (Miscellaneous Tax Appeal E794 of 2023) [2025] KETAT 13 (KLR) (17 January 2025) (Ruling)

Neutral citation: [2025] KETAT 13 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Tax Appeal E794 of 2023

CA Muga, Chair, BK Terer, EN Njeru, E Ng'ang'a & SS Ololchike, Members

January 17, 2025

Between

Rajchem Polymers Limited

Applicant

and

Commissioner of Customs and Border Control

Respondent

Ruling

1. The Applicant filed a Notice of Motion dated and filed on 21st November 2024 under certificate of urgency seeking the following Orders:a.Spent.b.That pending hearing and determination of the dispute between the Applicant and the Respondent the Honourable Court be pleased to Order the release of Bank Guarantees Ref No.BB/BG/137/2023; REFN BB/BG/137/2023; 216/2024; 071/2024; 476/2023; 259/2023 OVER CUSTOMS, 24EMKIM400701277, 24EMKIM400235228, 235CDIM400053755, 23MBAIM403400100; 24EKIM400748160, 235CDIM400053035 P.0. 1597/2023. c.That this Tribunal do vary/set-aside the consent order and for seek clarity on all issues in the Appeal that the consent did not clarify on.d.That the Tribunal be pleased to declare HS CODE 3900. 00. 00 as the right HS CODE to be used by the Respondents on the Applicant’s goods/silicon as was used in the consent order reached by the parties.e.That the Tribunal be pleased to make such further Orders as are necessary for the ends of justice in the matter.f.That the Costs of this Application be provided for by the Respondent.

2. The Application was supported by an affidavit sworn by Loise Njeri. The Applicant also filed a further affidavit date 3rd December 2024 predicated on the following grounds:i.That the Applicant issued various bank guarantees to the Respondent during the pendency of the appeal in this Tribunal.ii.That the matter proceeded to ADR and it was settled that the right HS CODE that ought to have been used was 3900. 00 and in that understanding the Respondent cleared all the post audit claims made against the applicant up to 2023. iii.That the Respondent only returned one bank guarantee namely Entry No. 23EMKIM400217437 to the Applicant.iv.That the Applicant demanded the release of the rest of the bank guarantees but the Respondent was hesitant to do the same thus crippling the business of the Applicant.v.That the Applicant has been denied its bank guarantees by the Respondent who claimed that the Applicant has tax arrears and the consent as executed did not mention that the bank guarantees should be refunded.vi.That the Applicant was hesitant on continuing to do his business since the HS CODE issue is not clear to the Respondent thereby causing doubt on the tax to be paid by the Applicant in case it imports its goods.vii.That the Applicant’s claim is that the HS CODE to be used while paying taxes is HS Code 3910. 00. 00 by virtue of the previous rulings No. CUS/V&T/TARI/RUL/526/2016 and KRA/C&BC/BIAITHQ/184/04/2022, KRAICBBC/BIATHQ/185/04/2022 dated 22nd April 2023 and the consent of the Court.viii.That the balance of convenience weighed in favour of the Applicant in this matter owing to the fact that all taxes assessed under HS CODE 3910. 00. 00 were paid and cleared under the post audit appeal case where the consent was executed.ix.Granting of this Application will not occasion the Respondent any prejudice and on the other hand, if this Application is not granted, the Applicant will be extremely prejudiced as it will continue to accumulate losses and suffer irreparable harm to the business.x.That this Application was not meant to obstruct justice in any way. To the contrary, the same will enable the Court to deliver justice on the merits.xi.Granting this Application will enable the Court to meet its objectives of dispensing justice fairly, expeditiously and affordably.xii.That the Applicant has raised meritable and good grounds in the application on the methodologies employed for assessment of duty payable

3. In response to the Application, the Respondent filed a replying affidavit sworn by Victor Chabala dated 29th November 2024 wherein the Respondent opposed the application on the following grounds:a.That the Applicant filed this Appeal having been dissatisfied with the decision of the Respondent dated 18th September 2023. b.That the Applicant referred to some of the consignments under Paragraph 15 as well as within the prayers sought in its Memorandum of Appeal; and also referred to some of the consignments under Paragraphs 12 and 24 of its Statement of Facts.c.That the Applicant was notified by the Respondent in the Review Decision dated 18th September 2023 of the particular consignments that the Respondent had considered and that the Applicant even attached a list of the consignments that was attached to the Respondent’s review decision in its Appeal documents.d.That this Appeal was concluded through the ADR process where both parties duly executed the ADR Agreement dated 24th May 2024 and that the parties thereafter executed a Consent dated 11th June 2024 that was duly filed on 11th June 2024. e.That the matter was mentioned on 24th June 2024 when the Tribunal was notified of the Consent and it was adopted as the Judgement of the Tribunal.f.That whereas the Applicant has referred to several bank guarantees in its Application, only one bank guarantee is related to this particular Appeal and in particular, the bank guarantee BG No. BB/BG/137/2023 amounting to Kshs 2,018,267. 00 for customs entry number 23EMKIM400217437 is the only bank guarantee that is related to this Appeal.g.That the Applicant did not issue the Respondent with bank guarantees for the other consignments in this Appeal.h.That for the avoidance of doubt, the other bank guarantees referred to by the Applicant herein were neither related to the Respondent’s Review Decision dated 18th September 2023, nor are they related to this Appeal nor are they related to the ADR Agreement dated 24th May 2024 nor are they related to the Consent dated 11th June 2024. i.That the Respondent complied with the ADR Agreement and Consent that formed the Judgement in this matter by returning the only bank guarantee that is related to a consignment in the main Appeal.j.That some of the Orders sought by the Applicant in its application went beyond the issue of bank guarantees and go further to setting aside the Consent that was freely executed by both parties and adopted by the Tribunal as its Judgement.k.That some of the Orders sought infringed upon the discretion of the Respondent.l.That once the Tribunal determined this matter it became functus officio on the same issue.m.That the matter that the Applicant wants to revive through Order 3 of its Notice of Motion application is now res judicata and that the instant application is misconceived, frivolous and vexatious.n.That the Applicant did not demonstrate that it deserved favourable discretion of this Tribunal and the Application should be dismissed with costs to the Respondent.

4. The Respondent prayed that this Application be dismissed with costs to the Respondent as the same is devoid any merit.

Analysis and Findings 5. There was a consensus between the parties herein that the Appeal was concluded through the ADR process where both parties executed the ADR Agreement dated 24th May 2024. The Applicant did not dispute that the parties entered into a consent dated 11th June 2024 which was filed on even date. Further, the Applicant did not dispute the fact that the Tribunal adopted the consent as the Judgement of this Tribunal. Accordingly, the matter was heard and determined by the Tribunal.

6. A taxpayer can seek intervention of a matter already determined by the Tribunal through a review process pursuant to the following provisions of Section 29A of the TATA:‘‘Review of decree or orders29A(1)A person who is aggrieved by a decree or an order from which no appeal has been preferred from the Tribunal to the High Court, may apply for review of the decree or the order within seven days from the date the decree or order was made by the Tribunal.’’

7. The Applicant’s notice of motion dated 21st November 2024 had nothing in common with Section 29A of the TATA. Upon delivery of a Decree or Order and if any party is aggrieved, the aggrieved party has a right to file an appeal to the High Court under section 32 of the TATA which provides as follows:‘‘32. Appeals to the High Court on decisions of the Tribunal1. A party to proceedings before the Tribunal may, within thirty days after being notified of the decision or within such further period as the High Court may allow, appeal to the High Court, and the party so appealing shall serve a copy of the notice of appeal on the other party.’’

8. The Tribunal finds that it is functus officio having deliberated upon the matters and adopted the consent dated 11th June 2024 as its Judgement. In the case of Telkom Kenya Ltd v John Ochanda [2014] eKLR the court held as follows:‘‘Functus officio is an enduring principle of law that prevents the re-opening of a matter before a court that rendered the final decision thereon. It is a doctrine that has been recognized in the common law tradition from as long ago as the latter part of the 19th Century. In the Canadian case of Chandler vs Alberta Association of Architects [1989] 2 S.C.R. 848, Sopinka J. traced the origins of the doctrines as follows (at p. 860);“The general rule that a final decision of a court cannot be re-opened derives from the decision of the English Court of Appeal In re St. Nazaire Co., (1879), 12 Ch. D. 88. The basis for it was that the power to rehear was transferred by the Judicature Acts to the appellate division. The rule applied only after the formal judgment had been drawn up, issued and entered, and was subject to two exceptions:1. Where there had been a slip in drawing it up, and,2. Where there was an error in expressing the manifest intention of the court. See Paper Machinery Ltd. v J.O. Rose Engineering Corp., [1934] S.C.R. 186. ”

9. In Subru Motors Limited v Commissioner of Domestic Taxes (Tribunal Appeal 109 of 2016) the Tribunal at paragraph 11 held as follows:‘‘the Tribunal considers itself functus officio upon delivery of its judgment or ruling except where it is moved to exercise its powers to review its decision to correct an error or a mistake.’’

10. In the case of Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1969] KLR, Nyarangi JA held, inter alia as follows:‘‘…Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of the proceedings pending other evidence. A court of law downs its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”

11. The Tribunal has issued its Judgement and is therefore functus officio. Furthermore, this is not an application for review of a decree or Orders as provided for by Section 29A of the TATA. Accordingly, the Tribunal finds and holds that it does not have jurisdiction to entertain the Application dated 21st November 2024 and the same ought to be struck out.

Disposition 12. Based on the foregoing analysis, the Tribunal finds that the Application lacks merit and accordingly proceeds to make the following Orders:a.The Application dated 21st November 2024 be and is hereby struck out.b.No orders as to costs.

13. It is so Ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 17TH DAY OF JANUARY, 2025. CHRISTINE A. MUGA - CHAIRPERSONBONIFACE K. TERER - MEMBERELISHAH N. NJERU - MEMBEREUNICE N. NG’ANG’A - MEMBEROLOLCHIKE S. SPENCER - MEMBER