[2012] KEHC 1882 (KLR)
The court determined that a stay of recovery of taxes should be granted to prevent undue hardship to the applicant and to ensure that the intended appeal is not rendered nugatory. However, the stay is conditional upon the applicant paying Kshs.50,000,000 within 30 days and securing a further Kshs.50,000,000 by bank...
Source-derived case information.
- Citation
- [2012] KEHC 1882 (KLR)
- Parties
- Applicant: Republic; Respondent: Commissioner of Customs & Excise; Respondent: Commissioner General Kenya Revenue Authority; Respondent: Commissioner of Domestic Taxes; Applicant: Mastermind Tobacco Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Judicial Review 710 of 2008
- Procedural Posture
- Judicial Review / Application for Stay Pending Appeal
- Outcome
- Stay of recovery of taxes granted on conditions; costs to applicant.
- Judges
- DAS Majanja
- Legal Topics
- Stay of Execution, Tax Recovery, Conservatory Orders, Appeals, Excise Duty
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Republic
Applicant
Commissioner of Customs & Excise
Respondent
Commissioner General Kenya Revenue Authority
Respondent
Commissioner of Domestic Taxes
Respondent
Mastermind Tobacco Limited
Applicant
Procedural Posture
Judicial Review / Application for Stay Pending Appeal
Legal Issues
- 1 Whether the court should grant a stay of recovery of excise duty pending appeal.
- 2 What conditions should be imposed for the grant of a conservatory order in tax matters.
Ratio Decidendi
The court determined that a stay of recovery of taxes should be granted to prevent undue hardship to the applicant and to ensure that the intended appeal is not rendered nugatory. However, the stay is conditional upon the applicant paying Kshs.50,000,000 within 30 days and securing a further Kshs.50,000,000 by bank guarantee within the same period. Failure to comply with these conditions will result in the lapse of the stay order. The court balanced the interests of both parties, recognizing the respondents' statutory mandate to collect taxes and the applicant's right to pursue an appeal without suffering irreparable harm.
Court Disposition
Stay of recovery of taxes granted on conditions; costs to applicant.
Orders
- There shall be a stay of recovery of taxes arising from the judgment delivered on 21st September 2012 pending the hearing and determination of the intended appeal to the Court of Appeal, subject to the following terms:
- The applicant shall pay to the 1st respondent the sum of Kshs.50,000,000 within 30 days from the date of the ruling.
Full Case Text
Judgment text and source record
25 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
JUDICIAL REVIEW 710 OF 2008
REPUBLIC ................................................................................................................... APPLICANT
AND
COMMISSIONER OF CUSTOMS & EXCISE ................................................ 1ST RESPONDENT
COMMISSIONER GENERAL KENYA REVENUE AUTHORITY ................... 2ND RESPONDENT
COMMISSIONER OF DOMESTIC TAXES ………………........................... 3RD RESPONDENT
EXPARTE
MASTERMIND TOBACCO LIMITED
RULING
1. The application before me today is the ex-parte applicant’s Chamber Summons dated 27th September 2012 and it seeks a conservatory or stay order suspending recovery of excise duty amounting to Kshs.442,205,324/= pending hearing and determination of the intended appeal from the judgment I delivered on 21st September 2012.
2. Both parties concede that the court has jurisdiction to grant conservatory orders pending appeal and that the court may impose such terms as it deems fit and just in the circumstances.
3. I have considered the arguments made and my duty is to balance the interests of the two parties. On the one hand, the applicant has an appeal which may or may not succeed and in view of the large sum due it should not suffer undue hardship that will result if the orders sought are not granted. It’s business may collapse and the intended appeal will be rendered nurgatory. On the other hand, the respondents have the constitutional and statutory authority to collect taxes and they now have a judgment in their favour after waiting since 2008.
4. Having considered the brief submissions by counsel and the circumstances of this case, I now make the following orders;
(a)There shall be a stay of recovery of taxes arising for the judgment delivered in this matter on 21st September 2012 pending the hearing and determination of the intended appeal to the Court of Appeal on the following terms;
(i)The applicant shall pay to the 1st respondent the sum of Kshs.50,000,000/00 within 30 days from today.
(ii)The applicant shall secure a further sum of Kshs. 50,000,000/00 by way of a bank guarantee in favour of the 1st respondent from a reputable bank within 30 days from today.
(iii)In default of compliance with conditions (i) and (ii) or either of them, the orders of stay hereby issued shall lapse forthwith without further orders of the court.
(b)Costs shall be borne by the applicant.
DATEDand DELIVERED at NAIROBI this 16th October 2012
D. S. MAJANJA
JUDGE
Mr T. Macharia instructed by Mbugua, Atudo and Macharia Advocates for the exparte applicant.
Mr G. Oraro instructed by Oraro and Company Advocates for the respondents.