[2024] KETAT 989 (KLR)

Simbisa Brands Kenya Limited v Commissioner of Domestic Taxes (Tax Appeal E948 of 2023) [2024] KETAT 989 (KLR) (12 July 2024) (Judgment)

Neutral citation: [2024] KETAT 989 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E948 of 2023

CA Muga, Chair, BK Terer, D.K Ngala & SS Ololchike, Members

July 12, 2024

Between

Simbisa Brands Kenya Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Judgment

Background 1. The Appellant is a private limited liability company registered within the Republic of Kenya. The Appellant engages in the service industry and runs the following restaurants; Pizza Inn, Galito’s, Chicken Inn, Baker's Inn, Creamy Inn, Vasilis and Grill Shack Restaurant.

2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws. Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws.

3. On 20th September, 2023, the Respondent carried out a routine compliance check on the Appellant with a view to ascertaining whether there was compliance with Value Added Tax regulations by visiting the Appellant’s Grill Shack Restaurant and conducted a mock purchase. The waiter issued the Respondent, a captain order was issued as a final receipt.

4. The Respondent enquired as to whether the receipt issued was the final receipt and involved the management of grill shack restaurant. The Appellant produced the captain order and inquired about a final receipt. They were thus issued with a proper invoice.

5. The Respondent further carried out other mock exercises where the Appellant issued proper invoices after the purchase. Having noted that the Appellant had committed an offence when it issued the first invoice, the Respondent issued a Notice of offence dated 20th September, 2023 charging the Appellant with offence of selective issuance of a proper tax invoice contrary to Section 42 of the Value Added Tax Act, CAP 476 of Kenya’s Laws (hereinafter “VAT Act”) as read with the VAT Regulations of 2020. Through the said notice, the Respondent directed the Appellant to appear before the Respondent on 27th September 2023.

6. On 27th September, 2023 the Appellant’s representative appeared before the Respondent where the parties had discussions. This meeting resulted to signing of request for settlement of a case under the provisions of Section 109 of the Tax Procedures Act Cap 469(B) (hereinafter “TPA”). Eventually, a report on settlement under Section 109 of the TPA was made and signed by the Respondent.

7. Consequently, the Respondent imposed a fine of Kshs 1,000,000. 00 for the alleged offence. The Appellant was dissatisfied by this decision leading to filing of this Appeal vide the notice of appeal dated and filed on 14th December 2023.

The Appeal 8. In its Memorandum of Appeal dated 18th December 2023 and filed on 20th December 2023, the Appellant raised the following grounds:a.That the Respondent erred in law and in fact by confirming the Penalty Order of Kshs 1,000,000. 00 with respect to the allegation that the Appellant selectively issued a tax invoice in contravention of Section 42 of the VAT Act as read with the VAT Regulations, 2020 which was contrary to evidence and explanations tabled before the Respondent. Having explained to the Respondent that there was indeed a tax invoice corresponding to the impugned sale and the invoice was complete with a time stamp, that the Respondent’s representatives left the Appellant's premises before the proper tax invoice could be issued and that the VAT to be paid on the sale of Kshs. 24. 41 was declared and recorded.b.That the Respondent erred in law and in fact by imposing a penalty of Kshs 1,000,000. 00 based on an allegation arising from the payment of VAT amounting to Kshs. 24. 41. By so doing, the Respondent has offended the principles of proportionality and reasonableness in Administrative Law as protected under Article 47 of the Constitution of Kenya, 2010 as well as Section 7 of the Fair Administrative Action Act, CAP 7L of Laws of Kenya (hereinafter “FAAA”).c.That the Respondent was misguided both in law and in fact in finding that the Appellant was a repeat offender therefore justifying the maximum penalty prescribed in Section 63 of the VAT Act.d.That the Respondent was misguided both in law and in fact in compounding the Appellant's offence as per Section 109 of the TPA.e.The Respondent erred in law and in fact by wilfully failing to consider the facts and explanations offered by the Appellant in explaining the circumstances leading to the issuance of the Notice of Offence dated 20th September 2023 and thereafter the Penalty order Number KRA202356619513 issued on 4th October 2023.

Appellant’s Case 9. In support of the Appeal, the Appellant lodged statement of facts dated 18th December 2023 and filed on 20th December 2023, together with written submissions 15th April 2024 and filed on the even date.

10. The Appellant stated that the genesis of this Appeal as well as the Penalty Order raised in connection hereto can be traced to the Notice of Offence dated 20th September 2023 and the Settlement Order dated 27th September 2023.

11. According to the Appellant, on the 20th September 2023, the Respondent's representatives visited the Appellant's premises, Grill Shack Restaurant at Westgate Mall. Grill Shack restaurant is a dine-in restaurant under the auspices of the Appellant.

12. The Appellant’s case was that when prospective a customer visits the said premises; the customer is directed to an unoccupied table by the Appellant's employees and offered the menu for their perusal. The customer then orders choice of food and/or drink; which is prepared, and served to the customer. The Appellant issues the customer with a table receipt based on the order from the customer to pay the bill. After few minutes, the waiter gets the receipt from the customer and presents it to the cashier to confirm or submit payment. After confirmation of payment, a Tax Invoice is printed and then handed to the customer.

13. The Appellant averred that on 20th September 2023 at around 12:01 pm, the Respondent’s representatives visited the Appellant's premises, they were ushered to an open table and handed the menu for their perusal. They then purchased a 500 ml bottle of still water at the consideration of Kshs. 180. 00, on which a Value Added Tax of Kshs. 24. 41 was payable. They were then issued with a table receipt which indicated that the VAT payable in respect to the purchase was Kshs 24. 41. However, the representatives left the premises before the Appellant could issue a tax invoice for the purchase.

14. The Respondent's authorized representatives then returned to the Appellant's restaurant, a few minutes after their abrupt exit, requesting for a tax invoice with a QR code in respect to the purchase of the 500 ml bottle of water. The waiters then printed the final tax receipt at 12:27 pm and presented it to the Respondent's representatives. The representatives then left the said premises and did not return that day.

15. At 1:17 pm, on the same day, a different team of the Respondent's representatives visited the restaurant and purchased a 300 ml bottle of still water. This time, the representatives were issued with a proper tax invoice before their departure. The Appellant added that this team of the Respondent's representatives then informed the Appellant of its offence of selectively issuing tax invoice and subsequently issued the Notice of Offence.

16. The Notice of Offence dated 20th September 2023 outlined that the Appellant was being charged with the offence of selective issuance of a proper tax invoice contrary to Section 42 of the VAT Act as read together with the VAT Regulations of 2020. In the said Notice of Offence, the Respondent directed that the Owner/Director of the Appellant to appear before the Commissioner at the KRA Office, Sameer Park, Block C1-1, First Floor (DTED Office) on the 27th September 2023 at 10:00 am.

17. The Appellant’s case was that on the 27th September 2023, the Appellant's representative, one Anthony Muchiri, visited the Respondent's offices as dictated by the Notice of Offence and was immediately issued with a form [Form EA-B (S.44)] where he was instructed to fill the said form in order to explain the circumstances surrounding the alleged offence of selective issuance of a tax invoice. Upon filling the above form, the Appellant's representative thereafter orally attempted to explain the circumstances surrounding the alleged offence, confirmed that the Appellant issued a proper tax invoice and assured the Respondent that there was no intention to defraud KRA as the VAT of Kshs. 24. 41 had ultimately been declared and recorded. Further, he explained that at every end of shift/day, it is the practice of the Appellant's Cashiers to ensure that every sale has a corresponding tax invoice so as to ensure that no tax is lost.

18. The Appellant also stated that its representative further explained that a review of the Appellant's internal control system ensures that stock taking of food products is carried out at the end of every shift and that the food items sold during the specific shift are reconciled to the sales as per the ETR summary of the Appellant's outlet. The Appellant’s representative thereafter stated that the shift Accountant, at the end of every shift signs to confirm that all the items sold are included in the sales. The Appellant also averred that the strong internal control system confirms that at the end of the shift, all sales would have been reported therefore no possibility of any tax to be lost.

19. While at the Respondent's offices at Sameer Park, the Appellant asserted that its representative, was issued with an order for settlement form [Form EA-D (S.44)] compounding the offence of selective issuance of a tax invoice and dictating that the Appellant pay a penalty of Kshs. 1,000,000. 00 immediately. The Appellant was thereafter served with a penalty order dated 4th October 2023 ordering for the payment of Kshs 1,000,000. 00. In response to this order, the Appellant wrote a letter authored by its tax agents dated 1st November 2023, opposed the offence as stipulated in the Notice of Offence dated 20th September 2023, explained the circumstances leading to the issuance of the notice and requested that the penalty order dated 4th October 2023 be lifted.

20. According to the Appellant, it objected the said penalty order based on the following grounds:‘‘1. Timing differenceUpon purchase, the waiters first issue a table receipt to the customer. Thereafter, based on the sale reflected on the table receipt, a tax invoice is issued. The table receipt and tax invoice must be reconciled before close of business.The accounting system is structured in a way that the two must tally before a cashier signs off. That is to say, the system is set up to ensure that for each table receipt issued, a corresponding tax invoice is printed. Every purchase must be followed by a corresponding tax invoice.We therefore pray that the Penalty Order of 27th September 2023 be set aside as owing to the nature of our Client’s business, where tax invoices are printed upon service of the Client rather than immediately upon purchase. Further, we wish to draw to the Commissioner’s attention that the KRA team visited our Client's premises during a time we would describe as "rush hour". In this context, rush hour refers to a time when our Client would normally expect a traffic of Customers.’’‘‘No tax was lostEven with the allegations of selectively issuing a tax invoice, our Client declared the sale of the two bottles of water in the VAT returns for the month of September. Further, a tax invoice was printed in respect to the sale in question therefore, no tax was lost.’’

21. The Appellant averred that the Respondent responded to the above objection vide its letter of 16th November 2023, denying the Appellant's request and recommending that the Appellant pay the outstanding penalty amount. Dissatisfied with the Respondent's objection decision dated 16th November 2023 and delivered by electronic mail on the 22nd November 2023, the Appellant filed a Notice of Appeal at the Tribunal.

22. The Appellant identified three issues for determination in its submissions: first, whether this Tribunal has the Jurisdiction to hear and determine this matter; second, whether the Appellant is guilty of the offence of selective issuance of an invoice; and third, whether the Respondent thwarted the administrative principles of proportionality and reasonableness by imposing a penalty of Kshs 1,000,000. 00.

23. On whether this Tribunal has the Jurisdiction to hear and determine this matter, the Appellant submitted that whereas the Respondent's position is that the Tribunal has no jurisdiction to handle the matter because an order resulting from the compounding of an offence is not an appealable decision, the Appellant submitted that this tribunal has the requisite jurisdiction to handle the matter on grounds that the compounding of the offence was invalid and therefore null and void because the requirements for compounding were not fulfilled; and that the alleged offence does not exist in tax law.

24. The Appellant submitted that the Respondent's actions did not fulfil the conditions laid out in Section 109 of the TPA. The Appellant submitted that it did not admit the offence therefore, the Respondent could not compound the offence under Section 109 of the TPA. The Appellant cited the case of Equity Group Holdings Limited v Commissioner of Domestic Taxes (Civil Appeal E0G9 & E025 of 2020) (2021| KEHC 25 (KLR) wherein the court held that the word shall in its ordinary meaning is a word of command which is normally given a compulsory meaning as it is intended to denote obligation. Therefore, the Appellant argued that that the word, ‘shall’ as used under Section 109 of the TPA means that the Respondent cannot exercise its discretion if a taxpayer has not admitted liability.

25. The Appellant also relied on the case of Simal Velji Shah v Chemafrica Limited |2014] eKLR wherein the court cited Guardian Bank Limited v Jambo Biscuits Kenya Limited [2014] eKLR where the court held that an admission must be very clear and unequivocal.

26. On whether the Appellant is guilty of the offence of selective issuance of an invoice; the Appellant cited Section 42 of the VAT Act to submit that the said section creates only one offence under Section 42(3) which makes it an offence to issue a lax invoice where there are no taxable supplies or where a non-registered person issues the invoice. The Appellant submitted that the section does not create or mention of any offence pertaining to the selective issuance of a proper tax invoice. In addition, the Appellant submitted that the offence of selectively issuing an invoice is also not provided for, in the VAT Regulations of 2020. Therefore, the Appellant argued that this law should be interpreted strictly.

27. The Appellant cited a number of case laws including Republic vs. Commissioner of Domestic Taxes Large Tax Payer's Office Ex-Parte Barclays Bank of Kenya LTD (2012] eKLR; Equity Group Holdings Limited v Commissioner of Domestic Taxes (Civil Appeal E069 & E025 of 2020) (2021) KEHC 25 (KLR) to submit that tax laws should be interpreted strictly.

28. On whether the Respondent thwarted the administrative principles of proportionality and reasonableness by imposing a penalty of Kshs 1,000,000. 00 the Appellant submitted that Article 47 of the Constitution of Kenya, 2010 (hereinafter “the Constitution”) codifies every person's right to fair administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. The Appellant also relied upon Section 4 of the FAAA which echoes Article 47 of the Constitution and reiterates the entitlement of every person to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. The Appellant argued that based on Article 47 of the Constitution, administrative action must also meet the test of reasonableness, rationality and proportionality.

29. The Appellant submitted that in making of the decision that is the penalty order at hand, the Respondent ought to have made a decision that was proportional to the tax in subject and the situation surrounding the alleged offence. The Appellant highlighted that the offence arose when the Respondent visited the Appellant's premises and purchased a bottle of water worth Kshs. 180. 00 under which a Value Added Tax of Kshs. 24. 41 was payable but the Appellant ended up being penalised to the tune of Kshs 1,000,000. 00 therefore the Appellant argued that the decision was unreasonable and unproportional too. The Appellant cited the case of Republic v Betting Control and Licensing Board & another Ex parte Outdoor Advertising Association of Kenya (2019] eKLR, wherein the court stated that unreasonableness and irrationality are grounds for Judicial Review.

Appellant’s prayers: 30. The Appellant made the following prayers:a.That the Tribunal be pleased to find that the Appellant complied fully with the provisions of Section 42 of the VAT and provided a proper tax invoice to the Respondent.b.That the Respondent was misguided in law and in fact in finding that the Appellant was guilty of the offence of selectively issuing a tax invoice contrary to Section 42 of the VAT Act as read with the VAT Regulations, 2020. c.That the Tribunal be pleased to find that the Respondent ignored the administrative principles of proportionality and Reasonableness thwarted by the respondent prescribing the penalty of Kshs 1,000,000. 00 where the tax payable to the Respondent was only Kshs 24. 41. d.That the Tribunal be pleased to find that the Respondent unfairly exercised its discretion by prescribing a penalty of Kshs 1,000,000. 00 where the tax applicable was Kshs 24. 41 and yet the said tax was ultimately declared and recorded.e.That the Tribunal be pleased to find that the requirements of Section 109 of the TPA were not fulfilled hence the compounding of the Appellant's offences was contrary to the Law.f.That the Tribunal be pleased to set aside the Respondent’s Penalty Order dated 4th October 2023, delivered via email on 04th October 2023 and the corresponding Settlement Order of Kshs 1,000,000. 00 dated 27th September 2023 in light of the supporting documents provided.g.That the costs of this Appeal be provided for.

Respondent’s Case 31. In response to the appeal, the Respondent lodged its Statement of Facts dated 15th January 2024 and filed on 22nd January 2024:

32. The Respondent stated that on 20th September, 2023, the Respondent carried out a routine compliance check on the Appellant with a view to ascertaining whether there was compliance with Value Added Tax regulations. It visited the Grill Shack Restaurant and conducted a mock purchase. The waiter issued the Respondent, a captain order was issued as a final receipt.

33. The Respondent alleged that it enquired as to whether the receipt issued was the final receipt and that it involved the management of grill shack restaurant. They produced the captain order and inquired about a final receipt. They were thus issued with a proper invoice.

34. The Respondent also stated that it further carried out other mock exercises where proper invoices were issued upon purchase and directed the Appellant to appear before the Respondent. On 27th September, 2023, one Mr. Antony Murithi Muchiri of Identification Number 22123932 appeared before the Respondent indicating that he is the Appellant's representative in this offence. He presented a letter from the Appellant that indicated that he had authority to represent them.

35. The Respondent relied on settlement dated 27th September, 2023 to allege that the Appellant requested for the offence to be compounded and admitted to the offence.

36. The Respondent found the Appellant to have not issued a proper tax invoice after full payment was made on a purchase on 20th September, 2023. According to the Respondent, this is done in contravention to Section 42 of the VAT Act. The Respondent further stated that pursuant to Section 109 of the TPA, the Appellant requested for compounding of the offence and admitted to the offence of selective issuance of a tax invoice which is contrary to Section 42 of VAT Act. The Respondent relied on a copy of the report on settlement and order of settlement to state that it consequently directed the Appellant to pay penalty of Kshs 1,000,000. 00 for the offence. The Appellant was aggrieved with the findings of the Respondent and lodged an appeal at the Tribunal.

37. The Respondent refuted each and every allegation by the Appellant contained in the Memorandum of Appeal and Statement of Facts.

38. On whether the Tribunal has jurisdiction to hear and determine the case, the Respondent pleaded that Section 109 of the TPA empowers it to compound offences where he is satisfied that a person has committed an offence under any tax law and in so doing, he may order the offender to pay a fine that would ordinarily be imposed if the offender had been convicted by a court of law. The Respondent citied Section 109 (3)(e) of the TPA which according to the Respondent, provides that any order made by the Commissioner is final and is not subject to appeal. The Respondent pleaded that the order intended to be appealed against is not capable of Appeal before any Court and Tribunal.

39. The Respondent pleaded that since it has been established by statute that the Tribunal lacks jurisdiction, it would only be prudent for it to down its tools and deem the intended Appeal as a nullity.

40. On whether its actions are proper in law, the Respondent relied upon section 42 of the VAT Act which according to the Respondent, requires a registered person who makes a taxable supply to furnish the purchaser with the tax invoice containing the prescribed details for the supply failure to which constitutes an offence.

41. The Respondent also pleaded that a captain order slip is meant allow the hotel to serve the clients better by getting right order details collect and passing them to the chef. According to the Respondent, a provision constitutes an offence. The Respondent maintained that captain order lacks the proper details of purchase that an invoice contains. It also pleaded that failure to issue a proper invoice after purchase may ultimately lead to substantial loss of government revenue.

42. According to the Respondent, Section 63 of the VAT Act provides for penalty of any person who is convicted of an offence under the VAT Act.

43. The Respondent pleaded that its actions to convict the Appellant for failing to issue a proper tax invoice is anchored in law and should be upheld. It also pleaded that no fault has been proved to have been found on the part of the Respondent by the Appellant. Consequently, the Respondent asserted that the Appellant does not have any reasonable cause of action against it.

44. In support of its case, the Respondent lodged written submissions dated 25th March 2024 and filed on 2nd April 2024. The Respondent also filed supplementary written submissions dated 30th April 2024 and filed on 2nd May 2024:

45. The Respondent submitted that under Section 109 of the TPA, the Tribunal does not have jurisdiction to hear and determine this appeal. The Respondent cited the Supreme Court decision in the case of the Matter of the interim Independent Electoral Commission (2011) eKLR which expounded on the "Lillian S" case while rendering an Advisory Opinion on Jurisdiction holding which was as follows:“The Lillian S case Establishes that jurisdiction flows from the law, and the recipient Court is to apply the same, with any limitations embodied therein, Such a Court may not arrogate to its jurisdiction through the craft of interpretation, or by way of endeavours to discern or interpret the intentions of the Parliament, where the wording of legislation is clear and there is no ambiguity."

46. The Respondent also relied on the case of Ndumu Plastics versusCommissioner of Domestic Taxes TAT Miscellaneous Application No 1513 of 2022; where this Tribunal held as follows:“...seeing as this is not a decision that the Tribunal is enjoined to make a decision on, the same grievance on the procedures and manner of arriving at the decision cannot be delved into by the Tribunal as this is not the correct court for which the same can be raised. The Tribunal's hands are tied. The Tribunal therefore does not wish to depart from the law and finds that the order by the Respondent is not to be entertained as an appealable decision by the Tribunal for lack of jurisdiction. To wit, the Tribunal finds no relevance in pronouncing itself on the issue of extension of time as it has been rendered moot."

47. The Respondent also submitted that the the Appellant committed an offence under Section 42 of the VAT Act as the Appellant did not issue proper tax invoice.

48. To emphasize that the Appellant did not issue a proper invoice, the Respondent also cited the provisions of regulation 9 of the VAT (Electronic Tax Invoice) Regulations, 2020 (Legal Notice No. 189 of 2020) which set out the key features of a valid Electronic Tax Invoice to include the following:“1)A tax invoice generated from a register shall contain:(a)The PlN of the registered user of a register;(b)The time and date of issuance;(c)The serial number of the invoice;(d)The buyer's PIN;(e)The total gross amount;(f)The total tax amount;(g)The item code of supplies (for exempt, zero-rated and other rate supplies) as provided by the Commissioner in accordance with the Act;(h)A brief description of goods and services;(i)The quantity of supply;(j)The unit of measure;(k)The tax rate charged;(1)The unique register identifier;(m)The unique invoice identifier;(n)A quick response (QR) code; and(o)Any other requirement as may be specified by the Commissioner..”

49. The Respondent submitted that it identified two contentious invoices in question from Grill Shack, one was issued at 12:01:11 and the second one at 12:27:56. The Respondent submitted that upon review of the invoices side by side, the most glaring difference between the invoices is that the second invoice contains a Quick Response (QR) code while the first invoice did not. The Respondent submitted that the purpose of a QR Code is to confirm the validity of the tax invoice.

50. The Respondent submitted that compliant tax registers will have the capability of generation of credit and debit notes referencing the original tax invoice. Based on this, the Respondent formed the opinion that the Appellant’s invoices were improper. Consequently, the Respondent submitted that it was correct to conclude that the first invoice was improper and ultimately that the invoices were issued selectively.

51. The Respondent submitted that the Appellant was duly made aware of the offence levelled against it with sufficient detail and allowed it to appear before the Commissioner and respond to the same. Therefore, the Respondent submitted that it upheld the Appellant's constitutional rights and acted fairly in the process of compounding. The Respondent maintained that it observed the provisions of Article 47 of the Constitution therefore the Appellant has no cause of action.

52. With regards to the penalty of Kshs 1,000,000. 00, the Respondent submitted that the rationale to penalize the Appellant to pay the penalty was to deter the Appellant from committing the offence again as it had been noted to have been a repeat offender.

Respondent’s Prayers 53. The Respondent urged the Tribunal to find and hold that it lacks jurisdiction to hear and determine the case and / or grant the reliefs sought by the Appellant. Consequently, the Respondent urged the Tribunal to dismiss the Appeal.

Issues For Determination 54. The Tribunal having considered the parties pleadings and submissions puts forth the following issues for determination:a.Whether the Tribunal has jurisdiction to hear and determine the Appeal.b.Whether the Respondent was justified in penalising the Appellant.

Analysis And Findings 55. The Tribunal wishes to analyse the issues as hereinunder:

(a) Whether the Tribunal has jurisdiction to hear and determine the Appeal. 56. The Respondent submitted that this Tribunal does not have jurisdiction to hear and determine this Appeal pursuant to Section 109 of the TPA.

57. The jurisdiction of this Tribunal for any court for that matter flows from a statute. Nyarangi JA in Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR had the following to say about jurisdiction:‘‘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 proceedings pending other evidence. A court of law down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction. Before I part with this aspect of the appeal, I refer to the following passage which will show that what I have already said is consistent with authority:“By jurisdiction is meant the authority which a court as to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognisance, or as to the area over which the jurisdiction shall extend, or it may partake of both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it has jurisdiction; but, except where the court or tribunal has been given power to determine conclusively whether the facts exist. Where a court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgement is given..”

58. The Tribunal notes that on 27th September, 2023 the Appellant’s representative appeared before the Respondent and a meeting resulted that resulted into signing of request for settlement of a case under the provisions of Section 109 of the on TPA. Eventually, a report on settlement under Section 109 of the TPA was made and signed by the Appellant. Consequently, the Respondent imposed a fine of Kshs 1,000,000. 00 for the alleged offence. The Appellant was dissatisfied by this decision leading to filing of this Appeal.

59. The Tribunal notes the following provisions of section 109 (3) of the TPA provides as follows:“An order by the Commissioner in accordance with this section shall—(a)Be in writing under the hand of the Commissioner and the offender, and witnessed by an officer;(b)Specify the name of the offender, the offence committed, the sum of money ordered by the Commissioner to be paid, and the date or dates on which payment is to be made;(c)Have a copy of the written admission referred to under subsection (2) attached;(d)Be served on the offender;(e)be final and not be subject to appeal; and [emphasis ours](f)On production in any court, be treated as proof of the conviction of the offender for the offence specified, and may be enforced in the same manner as a decree of a court for the payment of the amount stated therein.”

60. The Tribunal notes that Section 109(3) (e) of the TPA expressly provides that the Respondent’s order was final and not be subject to Appeal. Accordingly, the Appellant has sought remedies in the wrong forum. The Tribunal’s finding is that the Appeal is incompetent it therefore lacks the jurisdiction to hear and determine the Appeal.

(b) Whether the Respondent was justified in penalising the Appellant. 61. Having established that the Tribunal lacks jurisdiction to hear and determine the instant Appeal, the Tribunal will not proceed to analyse the second issue for determination as the same has been rendered moot.

Final Decision 62. The upshot of the foregoing is that the Appeal herein lacks merit and the Tribunal accordingly proceeds to make the following Orders;a.The Appeal be and is hereby struck out.b.Each party to bear its own costs.

63. It is so ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 12TH DAY OF JULY, 2024. CHRISTINE A. MUGA - CHAIRPERSONBONIFACE K. TERER- MEMBERDELILAH K. NGALA- MEMBEROLOLCHIKE S. SPENCER - MEMBER