[2023] KETAT 209 (KLR)

Regnol Oil Kenya Limited v Commissioner of Domestic Taxes (Miscellaneous Application E021 of 2023) [2023] KETAT 209 (KLR) (5 May 2023) (Ruling)

Neutral citation: [2023] KETAT 209 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Application E021 of 2023

E.N Wafula, Chair, Cynthia B. Mayaka, AK Kiprotich, RO Oluoch & EN Njeru, Members

May 5, 2023

Between

Regnol Oil Kenya Limited

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The application which was by way of a Notice of Motion dated March 20, 2023 and filed under a Certificate of urgency on March 28, 2023 is supported by an Affidavit sworn by the Applicant‘s Group Chief Finance Officer, Abdizrack Aress on March 20, 2023 seeks for the following Orders:-a.Spentb.The Honourable Tribunal be pleased to grant an extension of time regarding the filing of a Notice of Appeal, Memorandum of Appeal, Statement of Facts, supporting documents, and the tax decision.c.The Notice of Appeal, Memorandum of Appeal, Statement of Facts, supporting documents, and the tax decision filed on this date be admitted into the record for this Honourable Tribunal as having been filed within time.d.The Honourable Tribunal be pleased to grant any further orders as it may deem just and expedient.e.The cost of this application be in the cause.

2. The application is premised on the following grounds:-a.That the Applicant and the Respondent are embroiled in a tax dispute over an Assessment Order that was issued to the Applicant on November 15, 2019 and the same objected to by the Applicant.b.That the Respondent acknowledged receipt of the Objection on November 19, 2019 and went silent for three years since then.c.That the Respondent woke up from slumber and confirmed the assessment on September 15, 2022 but failed to communicate the same to the Applicant.d.That the Applicant did not hear from the Respondent within the stipulated time even after acknowledging receipt of the Objection and assumed that the Objection had been allowed.e.That the Applicant does not owe the Respondent any outstanding tax and therefore has a good appeal as against the Respondent and unless the Applicant is allowed leave to file the Appeal out of time the Applicant will stand to suffer immensely.f.That on March 14, 2023, the Appellant’s accountant stumbled upon the confirmation of the Assessment Notice on the Applicant’s account in the iTax portal dated September 15, 2022. g.That statutorily, the Applicant is out of time within which it ought to file an appeal and therefore prays this Honourable Tribunal to enlarge time to enable it to file the appeal.

Response to the Application 3. The Respondent in response to the application filed its Grounds of Opposition dated April 10, 2023 and filed on April 13, 2023 wherein it stated the following in opposition to the application.a.The application is incompetent, bad in law, fatally defective and is an abuse of this Honourable Tribunal’s process.b.That no credible reason has been advanced by the Applicant to warrant extension of time to file an appeal as provided at Section 13(4) of the Tax Appeals Tribunal Act.c.That an application of this nature requires an Applicant to prove his/her absence from Kenya, sickness or other reasonable cause.d.That equity aids the vigilant and not the indolent. The Applicant ought to have acted swiftly to preserve its rights. It is guilty of laches.e.That the application is an afterthought and a delay tactic by the Applicant meant to delay the conclusion of the matter which holds substantial government revenue.f.That the taxes demanded herein became due on confirmation of the assessments. They now continue to accrue interest and penalties as provided under the various tax laws as there is no valid appeal before the Tribunal thus the Applicant ought to pay 50% on account to show commitment in the matter for the Tribunal to consider granting the orders sought.g.That the Applicant has not demonstrated it deserves favourable discretion of this Honourable Tribunal and the application should be dismissed with costs to the Respondent.

Analysis and Findings 4. The parties inspite of the Tribunal’s direction and opportunity granted to file written submissions opted not to file any and the application is to be determined on the basis of both the Affidavit and the Grounds of Opposition.

5. 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.

6. In determining whether to extend time, the Tribunal was guided by the decision of the court in Charles Karanja Kiiru v Charles Githinji Muigwa [2017] eKLR, where the learned Judge stated that:-“It is trite that extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party, at the discretion of the Court”.

7. On the criteria of the issues to be considered when granting an extension to file an appeal out of time, the Tribunal referred to the decision of Odek, JJ. A inEdith Gichugu Koine v Stephen Njagi Thoithi [2014] eKLR, where the Court laid out the factors as thus:-“Nevertheless, it ought to be guided by consideration of factors stated in many previous decisions of this Court including, but not limited to, the period of delay, the reasons for the delay, the degree of prejudice to the respondent if the application is granted, and whether the matter raises issues of public importance, amongst others...”

8. Further, in Sammy Mwangi Kiriethe & 2 others v Kenya Commercial Bank Ltd [2020] eKLR, the court held that:-“The Court considers the length of the delay; the reason for the delay; the chances of success of the intended appeal, and the degree of prejudice that would be occasioned to the respondent if the application is granted.”

9. The Tribunal, guided by the principles set out in John Kuria v Kelen Wahito, Nairobi Civil Application Nai 19 of 1983 April 10, 1984 referred to by the judges in the case ofWasike v Swala [1984] KLR 591, Sammy Mwangi Kiriethe & 2 others v Kenya Commercial Bank Ltd (supra) and Section 13 of the Tax Appeals Tribunal Act, 2013 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?a.Whether there is a reasonable cause for the delay?

10. In considering what constitutes a reasonable reason for the delay, the court in Silas Kanyolu Mwatha v Josephine Kavive James [2021] eKLR, held that:-“The time stipulation is a requirement of the law as clearly stated ... In short, parties cannot, either unilaterally or by agreement between them, metaphorically, waive away the rules of the court. The rules of the Court are meant to achieve timely and orderly commencement, progress, and proper determination of litigation of proceedings. Given the statutory limit, principally, the delay is inexcusable unless the applicant shows sufficient cause to justify the delay and that any such extension shall not prejudice the respondent.” (Emphasis added).

11. The Applicant averred that it could not receive the confirmation assessment notices 3 years after the Respondent acknowledged receipt of the Notice of Objection from the Applicant in which time the Applicant was of the assumption that its Objection was allowed.

12. The Respondent contended that the application requires the Applicant to prove that it was absent from Kenya, sick, or any other reason to prove its case which it hasn’t.

13. The Tribunal has scrutinised the documents produced by the Appellant together with its pleadings and finds no iota of evidence supporting its assertions. The only documentary evidence provided is the Assessment Notice dated 19th November 2019.

14. It is, therefore, the Tribunal’s finding that the reason tendered by the Applicant is not fully supported to the satisfaction of the Tribunal, thus, there is no reasonable cause for the delay that has been proven.

15. Having found as above, the Tribunal sees no reason to discuss the remaining tests as they have been rendered moot.

16. The Tribunal was in the circumstances not persuaded to exercise its discretion in favour of the Applicant.

Disposition 17. The Tribunal in the circumstances accordingly makes the following Orders:-a.The application for the extension of time be and is hereby dismissed;b.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 5TH DAY OF MAY, 2023. .........................................ERIC N. WAFULACHAIRMAN.........................................CYNTHIA B. MAYAKAMEMBER MEMBER.........................................ABRAHAM KIPROTICHMEMBER MEMBER.........................................RODNEY O. OLUOCH ELISHAH NJERUMEMBER MEMBER