[2023] KETAT 987 (KLR)

Skillman Construction Limited v Commissioner of Domestic Taxes (Tax Appeal E311 of 2023) [2023] KETAT 987 (KLR) (1 December 2023) (Ruling)

Neutral citation: [2023] KETAT 987 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E311 of 2023

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

December 1, 2023

Between

Skillman Construction Limited

Appellant

and

Commissioner Of Domestic Taxes

Respondent

Ruling

1. The parties herein presented three (3) applications for determination, two by the Applicant dated 8th June 2023 & 18th July 2023 and one by the Respondent dated 26th July 2023.

2. The Tribunal upon perusal of the three (3) applications is of the view that the applications are interrelated and shall determine the same simultaneously, as herein under;

Appellant’s application dated 8th June 2023 3. The Appellant filed an application before the Tribunal a of urgency by way of Notice of Motion dated the 8th June 2023 and supported by an Affidavit sworn by, Benard Ratemo, the Managing Director of the Applicant, on the even date seeking for the following Orders:-a.Spent.b.Spent.c.That this Honourable Tribunal be pleased to grant Orders for stay of execution of the Respondent’s decision and any other subsequent orders arising from the decision delivered on the 5th June 2023 pending the hearing and determination of the Appeal herein.d.That the Honourable Tribunal be further pleased to direct the immediate unfreezing of the Applicant’s Bank Accounts forthwith to enable its payment of the Value Added Tax obligations as and when they fall due.e.That the costs of this application be borne by the Respondent.

4. The application is based on the following grounds, that;a.The decision in this matter was arrived at and delivered on 5th June, 2023 dismissing the right of a fair hearing and without laid down procedure.b.Being dissatisfied and aggrieved with the whole decision by the Respondent, the Appellant has now exercised its right of appeal and lodged this Appeal.c.The Respondent has already issued Agency Notices and frozen the Appellant’s bank accounts, an action that has exposed the Appellant to incur substantial loses, disrupt and paralyze its core business activities and further this act has put him in a default in terms of remitting its statutory obligations under Value Added Tax (VAT).d.In the foregoing, this application is made in good faith and it seeks an immediate unfreezing of the Appellant’s bank accounts forthwith to enable it continue with its core business and payment of the Value Added Tax Obligations as and when they fall due.e.The intended Appeal would be rendered nugatory should the Respondent continue with execution and enforcement of this decision because even if the Appeal succeeds the Appellant will suffer irreparable loss and harm in terms of monetary value.

5. The Respondent upon being served with the application, responded by way of a Replying Affidavit sworn by Victoria Mutheu Mutunga, an officer of the Respondent, on the 29th June 2023, stating as follows;a.That the Appellant was issued with various additional assessments on 24th April 2018, 16th April 2018, 18th April 2018, 15th April 2019 and 18th December 2020 totalling to Kshs. 12,809,686. 26. b.That the Appellant failed to Object to the assessment within 30 days as provided for under Section 51 (2) of the Tax Procedures Act and the Appellant filed late objections to all the assessments on 2nd November 2022. c.That in all the late objections the Appellant advanced the reason for lateness as other reasonable grounds without specifically indicating what the said reasonable grounds were.d.That the Respondent notified the Appellant in its email of 8th November 2022 that the Objections were invalid and requested the Appellant to give reasons for the delay with supporting documents, to which the Applicant failed to provide any documents for the lateness.e.That the Appellant was notified vide the letter dated 16th November 2022 that its Objections were invalid and as such the assessments stood unopposed.f.That the additional assessments having crystalized and the same not being paid, enforcement measures were commenced by issuance of agency notices on 5th June 2023. g.That the taxes that the Respondent has sought to enforce collection by the impugned agency notices are uncontested and as such the agency notices should not be lifted.h.That the Appellant has not filed an Appeal and has not sought leave to appeal against the taxes in which the Respondent is seeking to enforce collection.i.That the orders sought by the Appellant cannot be issued in the absence of an Appeal challenging the taxes in which collection is being enforced.j.That based on the foregoing, the instant application is devoid of merit, is misconceived, fatally defective and is a gross abuse of the Court Process and ought to be struck out with costs,

6. The parties having been directed to file and exchange written submissions, the parties filed and exchanged written submissions filed on 19th July 2023, and 5th July 2023 respectively.

7. The Applicant in its submissions reiterated the grounds and averments contained in its application and Affidavit in support thereof, and further submitted that:-a.The Appellant established two (2) issues for determination, being;a.Whether the Appellant should be granted the Orders sought.b.Whether the Respondent followed the laid down procedure before issuing the Agency notice dated 5th June 2023. b.The Appellant was issued with additional assessments to which the Appellant was not agreeable and sought to lodge the notice of objection out of time in line with the provisions of Section 51 (6) of the Tax Procedures Act.c.That the Respondent declined the Appellant’s application by notifying it that its Objections dated 2nd November were invalid because they were filed out of statutory timelines and on ground of “other reasonable cause”.d.That the Respondent in its actions violated Articles 47 (1), 48 and 50 (1) of the Constitution of Kenya.e.That the Respondent’s action to decline the Appellant’s application to lodge the notice of objection to that decision out of time within the provisions of Section 51 (6) of the Tax Procedures Act was not only unreasonable and but also against the rules of natural justice and the same did not take into account the relevant provisions of Fair Administrative Act.f.That it had not lodged an appeal against the Respondent’s decision, it further submitted that it has filed an application seeking leave to file an appeal out of time and the same ought to be deemed to be properly on record.g.That the delay in filing the said application was not intentional as the same was caused by the Appellant’s Director’s illness therefore making him unable to give the Appellant’s Advocates on record instructions to proceed with the matter.h.That it was noteworthy that the Honourable Tribunal issued an interim order on 20th June 2023 staying the enforcement of the Agency notices dated 5th June 2023; an Order that has not been fully complied with. That the Applicant is being denied an access of its bank accounts contrary to the directions of this Honourable Tribunal.

8. The Applicant placed reliance of the following case law, in fortifying its position;i.Commissioner of Income Tax vs. Westmont Power Ltd.ii.Inland Revenue vs. Scottish Central Electricity Company.iii.Bella Vista Restaurant Mombasa Limited vs. Kenya Revenue Authority.

9. The Respondent in its submissions established two (2) issues for determination, being;i.Whether the Respondent followed the laid down procedure before issuing the Agency notice dated 5th June 2023. ii.Whether the Appellant should be granted the Orders sought.a.The Respondent submitted that the Appellant was issued with VAT additional assessments and the Appellant failed to raise an objection to the said additional assessments within the stipulated timelines.b.The Respondent stated that in line with Section 51 (7) of the Tax Procedures Act, the Appellant can seek time to lodge the Objection on three grounds, one sickness, two absence in Kenya and three other reasonable grounds.c.The Respondent submitted that the Appellant’s application was based on the reasons of “other reasonable causes”, however, the same were not specified.d.The Respondent asserted that the Appellant being notified that its objection was invalid and requested to support the same with documents, failed to so do, the Respondent issued its decision on 16th November 2022. e.That the decision issued on 16th November 2022 was an Appealable decision and had the Appellant been aggrieved by the same then it ought to have appealed pursuant to Section 52 (1) of the Tax Procedures Act.f.The Respondent submitted that the Appellant had until 17th December 2022 to Appeal against the decision, to date the Appellant has never appealed the decision and the tax remains due and payable.g.The Respondent contented that as at the date of issuance of the Agency Notices the Appellant had neither paid the tax due nor made an application for extension of time to pay the tax due and relied on Section 42 of the Tax Procedures Act.h.The Respondent submitted that the additional assessments having crystalized and the Appellant having not paid the same, the Respondent commenced enforcement measures by issuing Agency Notices date 5th June 2023 and cannot therefore be faulted as it acted within the law.i.The Respondent submitted that the Appellant had not met the threshold to warrant the orders sought to be granted and relied on Section 18 of the Tax Appeals Tribunal Act.j.Further, the Respondent submitted that the Appellant has not filed an Appeal against the decision of the Respondent confirming and demanding taxes due nor filed an application seeking to file the said Appeal out of time. That the Appellant failed to exercise its right to file an Appeal and the Tribunal ought not to exercise it discretion on behalf of a party that has slept on its rights and not availed documents for consideration.k.The Respondent submitted that the Agency Notices were issued seven (7) months subsequent to the lapse of the statutory period within which the Appellant ought to have preferred an Appeal and therefore the Appellant is guilty of latches and is indolent.l.The Respondent urged the Tribunal to find that there was not valid Appeal and the application before it and to dismiss the same with costs to the Respondent.

10. The Respondent placed reliance of the following case law, in fortifying its position:-i.Sebastian Mwangi Kanyari, Paul Kipng’etich T/A Ruoro Kotut & Co. vs. Commissioner of Domestic Taxes in TAT No. 575 of 2021. ii.Shop and Delivery Limited vs. Commissioner of Domestic Taxes [Tax Appeal No. 141 of 2019]

Appellant’s application dated 18th July 2023 11. The Appellant filed an application before the Tribunal under a certificate of urgency by way of Notice of Motion dated the 18th July 2023 and supported by an Affidavit sworn by Benard Ratemo, the Managing Director of the Appellant, on the 18th July, 2023 seeking for the following Orders:-a.Spent.b.Spent.c.Spent.d.That the Honourable Tribunal be further pleased to direct the immediate compliance of an Order dated 20th June 2023 issued by this Honourable Tribunal.e.That this Honourable Tribunal be further pleased to grant the Appellant leave to lodge an Appeal.f.That the costs of this application be in the cause.

12. The application is based on the following grounds, that:-a.The decision in this matter was arrived at and delivered on 5th June, 2023 dismissing the right of a fair hearing and without laid down procedures.b.Being dissatisfied and aggrieved with the whole decision by the Respondent, the Appellant has now exercised its right of Appeal and it seeks leave to lodge an Appeal against the entire Respondent’s decision, albeit out of time.c.The Respondent has already issued Agency Notices and frozen the Applicant’s bank accounts, an action that has exposed the Appellant to incur substantial loses, disrupt and paralyze its core business activities and further this act has put it in a default in terms of remitting its statutory obligations under Value Added Tax (VAT).d.In the foregoing, this application is made in good faith and it seeks an immediate full compliance of the Order dated 20th June 2023 issued by this Honourable Court.e.The intended Appeal would be rendered nugatory should the Respondent continue with execution and enforcement of this decision because even if the Appeal succeeds the Appellant will suffer irreparable loss and harm in terms of monetary value.

13. The Respondent upon being served with the application, responded by way of a Replying Affidavit sworn by Victoria Mutheu Mutunga, an officer of the Respondent, on the 12th September 2023, stating as follows;a.That the Appellant was issued with various additional assessments on 24th April 2018, 16th April 2018, 18th April 2018, 15th April 2019 and 18th December 2020. The Appellant objected to all the assessments on 2nd November 2022. b.That in all the late objections the Appellant advanced the reason for lateness as other reasonable grounds without specifically indicating what the said reasonable grounds were.c.That the application for extension of time before the Commissioner were declined, therefore the only remedy available to the Appellant is to challenge the Respondent’s decision through a judicial review and not in this Honourable Tribunal.d.That there was no appealable decision capable of being appealed against at the Tax Appeals Tribunal and therefore the order for extension of time cannot issue.e.That Section 3 of the Tax Procedures Act defines an Appealable decision to mean an objection decision and any other decision made under a tax law other than a tax decision or a decision in the course of making a tax decision.f.That without prejudice to the foregoing, the Applicant has never given any convincing reasons to the Respondent nor now in the instance application to warrant an enlargement of time, grounds whereupon are provided under Section 13 (3) and (4) of the Tax Appeals Tribunal Act.g.That the application amounts to multiplication of applications which is an abuse of the Tribunal process, there is an application seeking similar orders date 8th June 2023 and which application is pending hearing and determination.h.That the Appellant has not filed and/or attached a Memorandum of Appeal for consideration by the Honourable Tribunal.

14. The parties being directed to file and exchange written submissions, the Respondent did not file any submissions, however, the Applicant filed submissions dated and filed on 8th September 2023.

15. The Appellant in its submissions reiterated the grounds and averments contained in its application and Affidavit in support thereof, and further submitted that;a.The Respondent in its actions violated Articles 47 (1), 48 and 50 (1) of the Constitution of Kenya.b.The principles on which the Court relies on before granting injunctive orders are well settled, the Appellant should show a prima facie case with a likelihood of success and it should be shown that the Appellant is likely to suffer an injury with cannot be adequately compensated by damages if the injunction is not granted.c.The Respondent’s action to decline the Appellant’s application to lodge the notice of objection to that decision out of time within the provisions of Section 51 (6) of the Tax Procedures Act was not only unreasonable and but was also against the rules of natural justice and the same did not take into account the relevant provisions of Fair Administrative Actions Act.d.The Respondent issued its decision delivered on 5th June 2023, a decision arrived at without according to the Appellant a chance to appear and present evidence and/or be heard on merit against an assessment for VAT slapped upon it contrary to the rules and dictates of natural justice of natural justice.e.The Tribunal issued an order on 20th June 2023 staying the Respondent’s decision dated 5th June 2023 and the Appellant seeks an immediate and full compliance of the said order.

16. The Appellant placed reliance of the following case law, in fortifying its position;i.Geilla vs. Cassman Brown and Co Ltd [1973] EA 358. ii.Commissioner of Income Tax vs. Westmont Power Ltd.iii.Inland Revenue vs. Scottish Central Electricity Company.iv.Kanja Kamau Gitau vs. Industrial & Commercial Development Corporation [2006] eKLR.

Respondent’s application dated 26th July 2023 17. The Respondent filed an application before the Tribunal under a certificate of urgency by way of Notice of Motion dated the 26th July 2023 and supported by an Affidavit sworn by Leparan Lemiso, an Advocate of the Respondent, on the even date, seeking for the following orders;a.Spentb.That the Orders of this Honourable Tribunal issued on 20th of July 2023 allowing the Appellant’s application dated 8th June 2023 be set aside and/or vacated.c.That this Honourable Tribunal be pleased to render its Ruling with regards to the Appellant’s application dated 8th June 2023. d.That there be no orders as to costs.

18. The application is based on the following grounds, that;a.On the 16th June 2023, the Appellant filed a Notice of Motion application dated 8th June 2023 seeking among others an order that the Honourable Tribunal be pleased to stay execution of the Respondent’s decision given on the 5th of June 2023. b.The said application dated 8th June 2023 came up for hearing on 19th June 2023. That during the hearing the Respondent’s Counsel informed the Tribunal that the Commissioner was opposed to the application and sought for time to file its response.c.The Tribunal allowed the Respondent time to file its response and adjourned hearing to the 30th June 2023. d.On the 29th June 2023 the Respondent filed an Affidavit dated 29th June 2023 opposing the taxpayer’s application dated 8th June 2023. e.The hearing of the application, on 30th June 2023 was vacated at the instance of the Tribunal and rescheduled to 7th July 2023. f.When the matter came up for hearing on 7th July 2023 the Tribunal directed that the Appellant’s application dated 8th June 2023 be canvassed by way of written submissions and further directed that the matter be mentioned on 21st July 2023 for further directions, which date the Tribunal moved to 20th July 2023. g.Both parties filed their respective submissions. The Commissioner’s submissions are dated 29th June 2023 and filed on 5th July 2023 while the Appellant’s submissions are dated 18th July 2023 and filed on 19th July 2023. h.When the matter came up on 20th July 2023 for directions, the Respondent’s Counsel on record instructed a colleague Counsel to hold brief for him, the instructions issued by Counsel holding brief were to take a Ruling date for the application dated 8th June 2023 since both parties had filed their submissions.i.The Counsel who was instructed to hold brief erroneously informed the Tribunal that the Respondent was not opposed to the application dated 8th June 2023 hence the Tribunal issued orders allowing the application.j.The Respondent seeks to have the said orders of 20th July 2023 which were issued by the Tribunal after it was erroneously misguided to be set aside and the Honourable Tribunal to proceed and render its Ruling on the Respondent’s application dated 8th June 2023. k.It is in the interest of justice, good governance and public interest that the application be heard and determined on priority basis.

19. The Appellant upon being served with the application, responded by way of a Replying Affidavit sworn by Benard Ratemo, the Managing Director of the Applicant, on the 2nd August 2023, stating as follows;a.That the Honourable Tribunal issued an interim order on 20th June 2023, staying the enforcement of the Agency Notices dated 5th June 2023 and Order which has not been fully complied with.b.That on 20th July 2023 the Respondent through its legal representative submitted and informed the Tribunal it was were no longer in the opposition of the said application.c.That the Tribunal issued its orders in regard to the same orders that the Appellant’s Advocates on record had advised the Appellant that are binding and the same should never be vacated.d.That the Respondent had filed an application seeking to vacate the said consent orders of the Tribunal, which application the Appellant is strongly opposed to.e.That in the interest of justice the Respondent’s application dated 26th July 2023 ought to be dismissed with cost.

20. The parties being directed to file and exchange written submissions, the parties filed and exchanged written submissions filed on 8th September 2023 for the Appellant and 12th September 2023 for the Respondent in the cause.

21. The Respondent in its submissions reiterated the grounds and averments contained in its application and Affidavit in support thereof, and further submitted that:-a.It established one issue for determination, being.i.Whether the application dated 26th July 2023 is merited.b.That the Tribunal was inadvertently misdirected by Counsel holding brief for the Counsel on record to believe that the Respondent was not opposed to the application dated 8th June 2023 despite having filed its Replying Affidavit and submissions in opposition to the said application.c.That for an application for review and/or setting aside to be granted, the Respondent must establish that there is fresh evidence, mistake or error apparent on the face of the record or any other sufficient reasons and the application must be brought without inordinate delay.d.That the position taken by Counsel was erroneous and not consistent with the position in the Respondent’s pleadings and that amounts to an error and/or mistake, which error can be confirmed by a perusal of the record as the same is therefore apparent on the face of the record.e.That it has established that there was a mistake and/or error apparent on the face of the record and other sufficient reasons to warrant the Tribunal to exercise its jurisdiction.f.That the instant application was filed within seven (7) days, and this cannot amount to inordinate delay.

22. The Respondent placed reliance of the following case law, in fortifying its position;i.Hosea Nyandika Mosagwe & 2 Others vs. County Government of Nyamira [2022] eKLR.ii.Republic vs. Advocates Disciplinary Tribunal Ex parte Apollo Mboya [2019] eKLR.iii.Republic vs. Public Procurement Administrative Review Board & 2 Others [2018] eKLR.iv.National Bank of Kenya vs. Ndungu Njau [1997] eKLR.

23. The Appellant in its submissions reiterated the grounds and averments contained in its Replying affidavit in opposition thereof, and further submitted that;a.The Tribunal issued interim order dated 20th June 2023 in its favour, staying the enforcement of the Agency Notices dated 5th June 2023. b.On 20th July 2023 the Respondent through its legal representative informed and submitted to the Tribunal that it was no longer in opposition of the said Appellant’s application.c.The principles which a Court should rely on are well settled in law, and the Applicant ought to demonstrate that its application meets the threshold, as thus;i.The Orders were obtained, by fraud of deceit.ii.The Order is a nullity, such as, the Tribunal itself was not competent.iii.The Tribunal was misled into giving orders, under a mistaken belief that the parties had consented thereto.d.It is clear that the Respondent did appoint legal representative who submitted information to the Tribunal that it was no longer in opposition of the application dated 8th June 2023 and had authority and instructions from the Respondent to act on its behalf.e.The orders are not a nullity and the Tribunal is competent to issue the same.

24. The Appellant relied on the following case law;i.Senate of Kenya & 3 Others vs. Speaker of the National Assembly & 10 Others (Application 7 (E013) of 2022) (2023) KESC 1 (KLR) (18 January 2023).

Analysis and Determination 25. From the record, particularly relating to the proceedings of 20th July 2023 and regarding the application dated 8th June 2023, the Respondent’s Counsel indicated to the Tribunal that the Respondent was no longer opposed to the application. Consequently, the Tribunal made orders allowing the application by consent of the parties.

26. The application dated 8th June 2023 was determined on the 20th July 2023 and the Tribunal shall not belabour on the same. The Tribunal shall, therefore proceed to analyse and determine the applications dated 18th July 2023 and 26th July 2023.

27. The Tribunal having considered all the applications and rival arguments of the parties herein is of the view that the issues that recommend themselves for determination are as follows;a.When was the appealable decision issued by the Respondent?b.Whether the application dated 18th July 2023 is merited?c.Whether the application dated 26th July 2023 is merited?

28. The Tribunal shall analyse the issues as herein under;

When was the appealable decision issued by the Respondent? 29. The Respondent herein alluded to the fact that the appealable decision was the one made on 16th November 2022 rejecting the Appellant’s late objection lodged on 2nd November 2022, while the Appellant appears to deem as such the Respondent’s decision to enforce the assessment via Agency Notices made on 5th June 2023.

30. Section 52 (1) of the Tax Procedures Act defines what decisions the Tribunal may entertain, the same being appealable decisions and not any other decisions. The Section provides as follows:-“A person who is dissatisfied with an appealable decision may appeal the decision to the Tribunal in accordance with the provisions of the Tax Appeals Tribunal Act.”

31. Further, Section 3 of the Tax Procedures Act defines what constitutes an appealable decision, which provides;“appealable decision” means an objection decision and any other decision made under a tax law other than—(a)a tax decision; or(b)a decision made in the course of making a tax decision;”

32. The test is to establish whether the contents of the letter of 5th June 2023 constitute a tax decision or a decision made in the course of making a tax decision.

33. The Respondent on 5th June 2023 wrote a correspondence to the Appellant’s bankers and kept the Appellant in copy, the same was an agency notice directing the Appellant’s bankers to pay to the Respondent tax owing in the sum of Kshs. 12,809. 686. 00.

34. An Agency Notice is a method that the Respondent can apply in recovery of taxes, which taxes have already been deemed due and payable. The Agency Notice is therefore a mechanism of enforcement of an already issued tax decision.

35. It is the position of the Tribunal that the Agency Notice in itself is not an appealable decision, but a means of enforcement of an appealable or a tax decision.

36. On the other hand, the rejection of late objection is an appealable decision, and in this instance the appealable decision is the one made in rejecting the Appellant’s late notice of objection.

37. Whereas, the Respondent issued the appealable decision on 16th November 2022, the Tribunal notes from the notices presented by the Appellant that the same was communicated to the Appellant via the iTax platform vide the Late Objection Rejection Notice on the 12th January 2023.

38. It is the Tribunal’s view that the appealable decision was the one made rejecting the Appellant’s late objection on 16th November 2022 and communicated to the Appellant on 12th January 2023.

Whether the application dated 18th July 2023 is merited? 39. The Applicant in its application dated 18th July 2023, seeks leave to file its appeal out of time and for orders directing the immediate compliance with the Order made on 20th June 2023.

40. The power to enlarge time to file an appeal before the Tribunal is donated by Section 13 (3) of the Tax Appeals Tribunal Act, which provides as follows:-“The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).

41. Further, the grounds upon which a party presenting an application of this nature is to rely on are provided for under Section 13 (4) of the Tax Appeals Tribunal, the provision reads as follows:-“An extension under subsection (3) may be granted owing to absence from Kenya, or sickness, or other reasonable cause that may have prevented the applicant from filing the notice of appeal or submitting the documents within the specified period.”

42. The period allowed by law within which any person or entity being aggrieved by an appealable decision for lodging a notice of appeal is within thirty (30) days of date of issuance of such decision, the Appellant did not comply with the same, the Appellant, therefore invites this Tribunal to exercise it discretion.

43. It is noteworthy that the extension of time to file an appeal out of time is not a right of a party, this is an equitable remedy that is only available to a deserving party at the discretion of the Tribunal, which discretion ought to be exercised judicially.

44. The Applicant to an application of this nature has the burden of laying a basis to the satisfaction of the Tribunal and in accordance with the provisions of Section 13 (3) and (4) of the Tax Appeals Tribunal Act.

45. The grounds for the delay must be explained to the satisfaction of the Tribunal, more so if the Applicant elects to rely on “other reasonable cause” as the ground for the delay.

46. The Court of Appeal in Cecilia Wanja Waweru vs. Jackson Wainaina Muiruri & Ano. [2014] eKLR, relating to what constitutes inordinate delay, stated as thus:-“There is no set rule as to what constitutes inordinate delay. Whether or not a party is guilty of inordinate delay depends on the circumstances of that case. We are of the considered view that the learned Judge in considering the application, should have looked at the Appellant’s conduct from the time the appeal was field up to the date the application for reinstatement was filed…………”

47. The appealable decision having been issued on 16th November 2022 and communicated to the Appellant on 12th January 2023, the Appellant having moved the Tribunal 8th June 2023, the delay in presenting the application seeking leave to file Appeal out of time is therefore not inordinate.

48. Whereas the Appellant in its application dated 18th July 2023 together with the Affidavit in support thereof, did advance the grounds for the delay in filing the appeal within the prescribed timelines, the Tribunal, however, noted that the Appellant in its written submissions dated 18th July 2023, submitted that the delay was not intentional and that the Director of the Appellant was taken ill therefore making him unable to issue instructions to the Appellant’s Advocates to institute the instant applications.

49. The Tribunal has observed that the Respondent alluded that it shall suffer prejudice if the Orders sought are granted, but has not demonstrated to the Tribunal what nature and extent of prejudice it would suffer if the Appellant is granted extension of time to lodge the appeal.

50. The Tribunal having considered all matters is of the view that the Respondent shall not suffer any prejudice if the Appellant is granted extension of time to appeal.

51. In view of the foregoing, The Tribunal having considered the length of the period of delay, the grounds advanced for delay, and whether prejudice is likely to be suffered, finds that the delay not to be inordinate and with plausible reasons having been given for the delay .

52. It is the Tribunal’s finding that on a balance of convenience, the application dated 18th July 2023 is merited and ought to be allowed.

Whether the application dated 26th July 2023 is merited? 53. The Respondent presented the application dated 26th July 2023 seeking to set aside or vary the Order issued by consent on 20th July 2023 and thereafter the application to be determined on merit.

54. The said orders were grant pursuant to the Appellant’s application dated 8th June 2023, which sought to have the Respondent restrained from enforcing the recovery of taxes via the Agency Notices issued on 5th June 2023.

55. The Tribunal, having made a finding herein above that the Appellant be granted leave to file an Appeal out of time, it would be prejudicial and a move in retrogression to allow the Respondent’s application dated 26th July 2023 to recover the taxes which shall be subject of the Appeal.

56. The Tribunal is therefore in the interest of justice inclined to disallow the Respondent’s application dated 26th July 2023 and grant the parties herein an opportunity to ventilate their issues before the Tribunal on their proper merits.

Disposition 57. The upshot of the foregoing analysis is that, the Tribunal finds the application dated 18th July 2023 to be merited and allows the same and the application dated 26th July 2023 is found wanting and is dismissed.

58. Consequently, in exercise of its discretion, the Tribunal makes the following Orders;a.That the Appellant be and is hereby granted leave to file an appeal out of time.b.The Notice of Appeal, Memorandum of Appeal, Statement of Fact and the Objection decision filed on the 16th June, 2023 are hereby deemed as duly filed and served.c.That the Respondent to file and serve its Statement of Facts together with documents in support thereof within thirty (30) days of the date of delivery of this Ruling.d.That the Respondent shall forthwith comply with the orders of this Tribunal issued on the 20th July 2023, for the avoidance of doubt the Agency Notices issued to Absa Bank on 5th June 2023 stands lifted unconditionally.e.No orders as to costs.

59. It is so ordered.

DATED and DELIVERED at NAIROBI this 1st day December, 2023ERIC NYONGESA WAFULA - CHAIRMANMUTISO MAKAU - MEMBERELISHAH N. NJERU - MEMBEREUNICE N. NG’ANG’A - MEMBERABRAHAM K. KIPROTICH - MEMBER