Deep Creek Enterpries Limited v Commissioner of Domestic Taxes [2023] KETAT 216 (KLR)

Deep Creek Enterpries Limited v Commissioner of Domestic Taxes (Tax Appeal 280 of 2020) [2023] KETAT 216 (KLR) (5 May 2023) (Ruling)

Neutral citation: [2023] KETAT 216 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal 280 of 2020

E.N Wafula, Chair, Cynthia B. Mayaka & A.K Kiprotich, Members

May 5, 2023

Between

Deep Creek Enterpries Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Appellant vide a Notice of Motion application dated the November 22, 2022 and filed under a Certificate of urgency on the November 23, 2022 seeks for the following Orders:-a.Spentb.Spentc.That the agency notice issued to Equity bank, Stanbic Bank and KCB Bank to be vacated unconditionally pending the hearing and determination of the intended appeal.d.That this Honourable Tribunal be pleased to set aside the Order issued on November 9, 2021 dismissing the Appellant /Applicant’s Appeal.e.That the Appeal No 280 of 2020, Deep Creek Enterprises Ltd Vs Commissioner of Domestic Taxes filed before this Honourable Tribunal be reinstated.

2. The application which is supported by an Affidavit sworn by Michael Maina Gichungu, the Appellant’s Director, on the November 21, 2022 is premised on the following grounds:-a.That upon filing of the Appeal on the July 16, 2020, through its Director, Michael Gichungu, the Appellant waited for the Appeal to be placed before the Tribunal and a Mention date allocated all in vain.b.That at the time, the Country was experienced harsh realities of the Covid-19 which rendered transport and logistics untenable.c.That the Appellant’s Director, Michael Maina Gichungu, fell sick and was put in isolation, which saw him bedridden and immobile for months.d.That due to the foregoing facts the Appellant missed a couple of its Mentions before the Tribunal resulting in the matter being dismissed for want of prosecution.e.That upon resumption of normal operations the company worked on a way to stabilize and keep things afloat. That it was upon discovery of the dismissal of the matter that the Appellant engaged the services of a tax agent.f.That the Appellant has an arguable case with a high chance of success.g.That it is therefore crucial for the ends of justice to be met that the Appeal be reinstated to enable the proper and formal conclusion of the matter by the Tribunal.h.That the Appellant stands at risk of suffering insurmountable loses should the orders sought for not be granted.i.That the Respondent in turn will not suffer any prejudice should the application be allowed.

3. The Respondent in reply to the application filed Grounds of Opposition dated the November 24, 2022 in which it stated as follows:-a.That the application is contrary to Section 27(5) of the Tax Appeals Tribunal Act, 2013 and cannot thus invoke the powers of the Tribunal to grant the orders so sought.b.That there is inordinate delay and the Appellant is guilty of laches.c.That the application is frivolous, without merit and the same is an utter abuse of the powers of the Tribunal.d.That the application is baseless, inept and not grounded on the law.e.That with such a bare application, the discretion of the Honourable Tribunal cannot be invoked.

Analysis and Findings 4. The parties inspite of the Tribunal’s directions and opportunity to have the application determined by way of written submissions opted not to file any submissions. The Tribunal will determine the application on the factual basis as disclosed in the Affidavit in support thereof and in appreciation of the grounds raised by the Respondent in opposition to the application.

5. The Tribunal has noted that indeed the Appeal documents were signed and filed on behalf of the Appellant by its Director, to wit Michael Maina Gichungu.

6. The Appellant’s said Director is said to have been indisposed and bedridden subsequent to the Covid-19 pandemic and that the illness prevented him from attending any Mentions in the Appeal. This fact is not controverted.

7. The Tribunal takes judicial notice of the fact that this was one of the Appeals filed prior to the onset on the online hearings that were heralded by the challenges posed by the Covid-19 pandemic to physical hearings. It is manifestly clear from the Appeal documents filed before the Tribunal that the Appellant did not provide any official email or telephone contacts to facilitate for any online service of the Tribunal’s proceedings upon the Appellant.

8. The Tribunal finds that the explanation offered by the Appellant for the failure to attend the hearing of the Appeal and for the cause for the delay in the filing of the application for the reinstatement of the Appeal was plausible and reasonable.

9. The Tribunal has infact since adopted the best practice by the Tribunals of its ilk in determining appeals on the basis of the materials placed before the Tribunal by the parties and without any undue demand requiring the parties to attend the proceedings before the Tribunal.

Disposition 10. The Tribunal on the basis of the foregoing analysis proceeds to make the following Orders:-a.The Appeal be and is hereby reinstated.b.The matter is hereby fixed for Mention on the May 18, 2023 for the purposes of taking any further necessary pre-trial directions and fixing of the matter for hearing.c.No orders as to costs

DATED AND DELIVERED AT NAIROBI THIS 5TH DAY OF MAY, 2023. ………………………….ERIC N. WAFULACHAIRMAN……………………………CYNTHIA B. MAYAKAMEMBER……………………………ABRAHAM KIPROTICHMEMBER