[2025] KETAT 251 (KLR)

Tavez Connections Limited v Commissioner of Domestic Taxes (Tribunal Case E500 of 2025) [2025] KETAT 251 (KLR) (Civ) (27 June 2025) (Ruling)

Neutral citation: [2025] KETAT 251 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Civil

Tribunal Case E500 of 2025

CA Muga, Chair, AK Kiprotich & T Vikiru, Members

June 27, 2025

Between

Tavez Connections Limited

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Applicant vide a Notice of Motion dated 16th May, 2025 and filed under a Certificate of urgency and supported by an affidavit sworn by Mrs. Kanyaa Musyimi sought for the following Orders:a.Spent.b.That the Tribunal be pleased to extend the time for filing the notice of Appeal, Memorandum of Appeal, Statement of Facts and Tax decision.c.That this Tribunal be pleased to give orders and directions as it may deem fit and just.d.That the costs of this Application be costs in the main Appeal.

2. The Application is premised on the following grounds:a.That vide a letter dated 3rd February 2023, the Applicant received a demand notice from the Respondent demanding a colossal sum of Kshs. 95,693,255. The Applicant objected on 13th February 2023 and received an objection decision on 25th April 2023. b.That the Applicant lodged its Notice of Appeal and Memorandum of Appeal on 27th June 2023, whereupon it waited for the allocation of a case number on the matter and subsequently be listed for directions as is the norm but that never happened. That the Tribunal’s position was that the Applicant had not paid the requisite Kshs. 20,000. 00 filing fees for the matter to progress.c.That upon inquiry it was established that the Applicant had made payment into a different account within the Judiciary.d.That the delay was further aggravated by the passing on of the managing director Mr. Abel Nthenge Makau on the 14th May 2023 at a time when the filing process was in progress.e.That having established what happened the Applicant has resorted to restart the process afresh to protect her constitutional right.f.That the Applicant has an arguable Appeal with high chances of success.g.That the delay in filing the Appeal herein is not inordinate owing to the fact that the error was occasioned by erroneously crediting fees in the wrong account of the Judiciary.h.That the reasons advanced by the Applicant are sufficient to warrant grant of extension of time to file Appeal out of time in accordance with Section 13(4) of the Tax Appeals Tribunal Act, CAP 469A of the Laws of Kenya (hereinafter “TATA”).i.That the Applicant will suffer substantial loss and damage if the Respondent’s objection decision is enforced by the Respondent.j.That the Respondent will not suffer any prejudice if the sought orders are granted.k.That it is just, fair and in the interest of justice that this Tribunal do certify this matter as urgent and grant the prayers sought in the motion.

3. The Respondent upon being served with the Application filed its grounds of opposition on 30th May, 2025 which raised the following grounds opposition to the Application:a.The Application offends the mandatory provisions of Section 13 the TATA as follows:i.The Applicant has not met the reasons set out under the Sections for exemptions; sickness, travelling out of the Country and any other reasonable cause.ii.The failure to follow up on the appeal is more than two years and is unexplained. The delay is inordinate.b.The Application is an abuse of the court process.

4. In compliance with the direction of the Tribunal to the effect that the application was to be canvassed by the way of written submissions, the Applicant filed its written submissions on 11th February, 2025 while the Respondent filed its submissions on 12th of February, 2025.

5. The Applicant submitted as follows:a.Contrary to the Respondent’s assertion that the Applicant has not met the threshold of sickness, travelling out of the Country and other reasonable cause, the Applicant submitted that death of the managing partner falls within the interpretation of sickness within the interpretation section 13 of TATA and if not, then it should fall under any other reasonable cause.b.The above notwithstanding, the Appeal was lodged within reasonable time as evidenced in the Judiciary e-payment slip save for an innocent error where the filing fees were credited in the wrong Judiciary account but still within the Judiciary.c.The death of the managing partner may have dissuaded the surviving director being a widow who had to recover from grief before resuming the normal operations of the Applicant amongst them dealing with tax disputes.d.Section 13(3) and 4) of the TATA stipulates 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).(4)An extension under section (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.”

6. The Applicant submitted that the grief period made the current Director Mrs. Kanyaa Musyimi to lose sight of time and cognitive sense to follow up on the issues that had been commenced before the demise of her beloved husband.

7. The explanation clearly shows that the Applicant did not intentionally seek to delay lodging of the said Appeal as the same had been lodged save for the fact that it was not issued with a case number owing to the innocent mistake of crediting the filing fees in wrong judiciary account.

8. The Applicant submitted that the Tribunal has discretion to and should find that the Notice of Appeal herein is proper both in substance and procedurally.

9. The High Court and other Superior courts have made findings on similar Applications. The Applicant relied on the case of Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 6 others [2013] eKLR, where the Court of Appeal held that a slight delay in service of a notice of Appeal was not fatal to the Appeal.

10. The circumstances of the case herein deserve the refuge of article 159(2)(d) of the Constitution of Kenya ,2010 (hereinafter “the Constitution”). Article 159(2)(d) of the Constitution provides that justice shall be administered without undue regard to procedural technicalities

11. On the issue of the Tribunal’s discretion to determine this matter, the Applicant further relied on the cases of:a.The Supreme Court of Uganda, in Karisa v Attorney-General and Another [1990-1994] EA 218;b.Kamlesh Patni v Director of Public Prosecution & 3 Others [2015] eKLR; andc.Stecol Corporation Limited v Susan Awuor Mudemba [2021] eKLR.

12. Dismissing the Application would render the Applicant unheard as explained by the Court of Appeal in County Government of Narok v British Pharmaceuticals Limited [2021) eKLR:“[24].The test is to weigh the prejudice that is likely to be suffered by the innocent party against the prejudice to be suffered by the offending party if his pleading or document is stuck down. The striking out the appeal means striking down the case for the appellant in a summary manner. I have said time without number that striking down a party's suit is only comparable to proverbial drawing of the sword of the Damocles, in effect, driving such party away from the seat of judgment unheard. Such is a cruel way of resolution of disputes, a return to the bill of attainder; an assuredly, arbitrary taking away of the right to be heard. This does not mean, however, that a record of appeal cannot be struck down for good reason. Except, in the circumstances of this case, the kind of prejudice that the appellant/respondent is likely to suffer if this appeal is struck out is graver than the prejudice that the respondent/ applicant will suffer if tile appeal is heard on merit. I am answering to a higher calling of the Constitution, and in the interest of Justice, the court will give an opportunity to the appellant/respondent to take directions on and set the appeal down for hearing."

13. The Applicant has explained the very brief delay and prays that Tribunal allows the Application as the Applicant stands to suffer substantial loss and damage if the Respondent's objection decision is enforced by the Respondent yet the Respondent will not suffer any prejudice if the matter is heard and determined on merit.

14. The Respondent submitted as follows:a.The Applicant stated that it lodged an Appeal on 27th June, 2023 at the Tribunal and waited for a case number to be allocated only to be informed that there was no proper appeal before the Tribunal on account of non-payment of court fees.b.The Applicant further averred that the payment was credited to a different account within the judiciary.c.On whether the Application meets the threshold set out under Section 13(3) and (4) of the Tata The Respondent provides as follows:“(3)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).(4)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.”d.The Court in the Ugandan case of Ojara v Okwera (Miscellaneous Civil Application 2017/23) [2018] VGHCCD 42 held as follows:“An order for enlargement of time to file the appeal should ordinarily be granted unless the applicant is guilty of unexplained and inordinate delay in seeking the indulgence of the court.”e.The Respondent submitted that the Applicant filed an appeal at the Tribunal and did not make any attempt to follow up on the development of the case. That the Court in the case of Charles Odhiambo Akal & another v Caxton Chege Muigai & 2 others [2019] KEELC 4745 (KLR) held as follows:“I am in agreement with the submission by the 1st defendant’s advocate that this suit belonged to the plaintiffs and as such they had a duty to follow up on the progress of the same. The alleged inactivity on the part of their former advocate is therefore not a sufficient reason to set aside the order dismissing this suit for want of prosecution. The plaintiffs’ failure to actively follow up on the progress of their case with their former advocate was a sign of lack of interest in the case. This being a court of equity, it cannot aid the indolent.”f.It is important for any person who files a case before the Court to pursue it with reasonable amount of diligence. After approaching the Tribunal in May, 2023, the Applicant should have made reasonable steps to follow up on the case filed.g.The Applicant did not attach a stamped copy of the appeal that was lodged before the Tribunal in 2023. The Respondent submitted that the document was vital to demonstrated to the Court the existence of the document and to bring forth the grounds of the intended appeal. The respondent relied on the court in the case of Wasike V Swala [1984] KLR where the court provided the hierarchy of the factors to consider when it stated the following:“An applicant must now show, in descending scale of importance, the following factors: -That there is merit in his appeal.That the extension of time to institute and/or file the appeal will not cause undue prejudice to the respondent; andThat the delay has not been inordinate.”h.The Court in the case of Leo Sila Mutiso v Rose Hellen Wangari Mwangi, Civil Application Nai 251 of 1997, set out principles to look at to consider the Application seeking to filing an appeal out of time:a.Whether there is a reasonable cause for the delay.b.The merits of the complained action.c.Whether there will be prejudice suffered by the Respondent if the extension is granted.d.Whether there is a reasonable cause for the delay … whether it could have been avoided by the party by the exercise of due care and attention”.i.The Applicant did not attach a draft Memorandum of Appeal and Supplementary Statement of Facts for scrutiny by the Tribunal or the Respondent.j.The extent and/ or scope of the intended amendment was therefore not known to either the Respondent or the Tribunal. An application of this nature required an Applicant to be forthright about the intended amendment and outrightly disclose the facts in issue otherwise, it would only set up the Respondent for trial by ambush. The Respondent will be prejudiced if the orders of amendment of pleadings are granted blindly.k.The Respondent submitted that the Applicant has not met the threshold of Section 13 (3) and 13 (4) of the Tatal.The Respondent urged the Tribunal to dismiss the Application with costs to it.

Analysis And Findings 15. The Applicant moved the Tribunal on 16th May 2025 seeking leave to file its Appeal against the decision of the Respondent dated 25th April 2023 out of time. The Tribunal’s jurisdiction to entertain applications of this nature is anchored on Sections 13 (3) and (4) of the Tata Section 13 (3) of the TATA 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).”

16. The reasons and/or ground upon which a party seeking for extension of time to file an appeal out of time can rely upon are contained within the provisions of Section 13 (4) of the TATA, which provides as follows:“(4)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.”

17. Similarly, Rule 10 (3) of the Tax Appeals Tribunal (Procedure) Rules, 2015, in relation to grounds upon which a party can rely on in making of an application for extension of time, provides as follows:“The Tribunal may grant the extension of time if it is satisfied that the applicant was unable to submit the documents in time for the following reasons-(a) absence from Kenya;(b) sickness; or(c) any other reasonable cause.”

18. It therefore follows that the Applicant is obligated to demonstrate such grounds upon which its application is anchored within the provisions of Section 13 (4) of the TATA as read together with Rule 10 of the Tax Appeals Tribunal (Procedure) Rules.

19. It was the Applicant’s submission that it lodged its Appeal in time on 27th June 2023 against the Respondent’s decision of 25th April 2023. That however, the Tribunal failed to allocate it a case number for the reason it had not paid filing fees when it had indeed paid the fee on 27th June 2023 a receipt of which it attached to this application.

20. The Applicant submitted that upon further scrutiny it was established that the filing fee had been credited in a wrong account within the Judiciary causing its Appeal to stall.

21. In supporting its application which was filed more than 2 years since the impugned objection decision was issued, the Applicant stated that the delay in lodging its Appeal was aggravated by the passing on of one of the directors Mr. Abel Nthenge Makau on 14th May 2023 when the initial filing process was in progress.

22. In opposing the Application, the Respondent submitted that the Applicant filed an appeal at the Tribunal and did not make any attempt to follow up on the development of the case. that equity does not aid the indolent. The Respondent posited that after approaching the Tribunal in May, 2023, the Applicant should have made reasonable steps to follow up on the case filed.

23. The Respondent also averred that the Applicant had not attached a stamped copy of the Notice of Appeal that was lodged before the Tribunal in 2023, neither had it attached a draft Memorandum of Appeal and Supplementary Statement of Facts for scrutiny by the Tribunal or the Respondent. In which case the extent and/ or scope of the intended amendment was therefore not known to either the Respondent or the Tribunal. That without informing the Respondent on the intended amendment and outrightly disclosing the facts in issue, it would only set up the Respondent for trial by ambush. The Respondent therefore submitted that the Applicant had not met the threshold of Section 13 (3) and 13 (4) of the Tata

24. In addressing whether the prayers sought by the Applicant herein should be granted, the Tribunal was be guided by the case of Nicholas Kiptoo Arap Korir Salat v Independent Electoral And Boundaries Commission & 7 Others [2014] EKLR where it was held as follows:“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.A party who seeks for extension of time has the burden of laying the basis to the satisfaction of the court. Whether the court should exercise the discretion to extend time is a consideration to be made on a case-to-case basis. Whether there is a reasonable reason for delay, the delay should be made to the satisfaction of the court.”

25. The Tribunal has perused the Applicant’s grounds as outlined in the application and Affidavit in support of the application thereof and observed the following:a.Whereas the Applicant averred that it has lodged an Appeal on 27th May 2023 it did not attach a copy of the said record of appeal.b.The Applicant did not attach a death certificate as proof of the death of one of its directors as part of the reasons for the long delay in pursuing the Appeal.c.The Applicant also failed to attach the draft Memorandum of Appeal and statement of facts for the Tribunal’s perusal to ascertain if indeed it had an arguable case.

26. In view of the foregoing, the Tribunal finds that the Applicant has failed to explain the 2-year delay in filing this application or pursuing its supposed Appeal that had been filed earlier. The Applicant has failed to fulfil the requirements of Section 13(4) of the TATA to persuade the tribunal to find in its favor.

Disposition 27. Based on the foregoing analysis, the Tribunal finds that the Application is lacks merit and accordingly proceeds to make the following Orders:a.The Application be and is hereby dismissed.b.No orders as to costs.

28. It is so Ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 27TH DAY OF JUNE, 2025. ………………………………….CHRISTINE A. MUGACHAIRPERSON…………………………... ……….……….…………