In re Parmar Vinubhai Somabhai, Sangitaben Vinubhai Parmarn & Harsidhi Enterprises Limited [2022] KEHC 187 (KLR)

In re Parmar Vinubhai Somabhai, Sangitaben Vinubhai Parmarn & Harsidhi Enterprises Limited (Miscellaneous Civil Application 717 of 2021) [2022] KEHC 187 (KLR) (Commercial and Tax) (14 March 2022) (Ruling)

Neutral citation: [2022] KEHC 187 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Miscellaneous Civil Application 717 of 2021

A Mabeya, J

March 14, 2022

LEAVE TO APPLY FOR JUDICIAL REVIEW FOR ORDERS OF MANDAMUS, CERTIORARI AND PROHIBITION IN THE MATTER OF THE TAX PROCEDURES ACT, 2015 AND IN THE MATTER OF THE TAX PROCEDURES ACT, 2015 AND IN THE MATTER OF THE KENYA REVENUE AUTHORITY ACT, CAP 469

Ruling

1. Before Court is a Chamber Summons application dated 26/8/2021 brought under order 53 rule 1 of the Civil Procedure Rules.

2. On 16/9/2021, prayers 1 and 2 of the application were allowed by this court. Prayer 2 had sought leave to apply for judicial review orders of prohibition, certiorari and mandamus against the respondents.

3. Prayer 3 of the application sought orders that the leave granted do operate as stay against the Attorney General, the Solicitor General, DPP, KRA, the Commissioner of Income Taxes & The Commissioner, Investigation & Enforcement from prosecuting the Ex Parte applicant in Criminal Case Number E726 of 2021 before the Chief Magistrate’s Court in Nairobi.

4. The application was supported by the affidavit of Parmar Vinubhai Somabhal sworn on 26/8/2021. The grounds were that; the applicant had been charged in the said Criminal Case Number E726 of 2021 for deliberately defaulting to pay tax amounting to Kshs. 510,563,263/=.

5. That the applicant lodged an objection to KRA’s assessment on 13/5/2021 but was rejected on 4/8/2021. That the response contravened section 51 (11) of the Tax Procedure Act as KRA was under the obligation to respond within 60 days of the objection. That this was the reason why KRA opted to pursue the issue through a criminal case causing the applicant to be charged. That the applicant ought not to have been charged for a tax matter whereas the statutory procedures under the Tax Procedure Act had not been exhausted.

6. The 4th, 5th, 6th and 7th respondents responded to the application vide the lengthy affidavit of Abdi Boru Guyo who was an investigating officer of KRA.

7. On 28/10/2021, this court directed that prayer 3 be disposed of by way of submissions on whether this court had jurisdiction to grant the said prayer 3 outside the 7-day window given by the rules. I have considered those submissions alongside the pleadings and evidence.

8. The applicant filed submissions dated 15/11/2021. It was submitted that under Order 53 Rule 1(4) of the Civil Procedure Rules, this court had jurisdiction to grant prayer 3. The 4th, 5th, 6th and 7th respondent’s filed their written submissions dated 5/112021. They submitted that under Order 53 (3) (1) of the Civil Procedure Rules, the applicant was obligated to file the substantive motion within 21 days from the date of leave. That 21 days expired on 7/10/2021 time by which the applicant had not complied, hence the leave granted by court on 16/9/2021 had lapsed on 7/10/2021.

9. That this court thus lacked jurisdiction to grant orders for stay in the absence of leave. That failure to file a substantive motion was not a procedural technicality curable by application of the overriding objective of the law under Article 159(2) of the Constitution.

10. The Court has considered the record. It is true that the applicant had not filed the substantive Motion within 21 days as prescribed. At the time of writing this ruling, about four months had lapsed from the date that 21 days expired being 7/10/2021. Leave having lapsed, there would be no purpose to be served by the stay being sought.

11. More importantly, the rules require that where stay is not granted at the ex-parte stage, the same should be heard and determined within 7 days of leave having been granted. That is the effect of the proviso to Order 53(1) sub rule 4.

12. In the present case, the Court granted leave ex-pare on 16/9/2022 and directed that the prayer for stay be heard on 22/9/2022, which was well within the 7-day period allowed by the law. On the said 22/9/2022 none of the parties appeared. Even as on the 28/9/2021, the applicant had not served the application upon the respondents for the hearing of that prayer.

13. In this regard, the 7-day period allowed by the rules having expired, there was no jurisdiction to entertain the prayer for stay. Accordingly, the prayer for stay is hereby dismissed.

14. Further, for the reason that there was no substantive Motion was filed within 21 days of leave or at all, the leave granted lapsed on 7/10/2021 and the application dated 26/8/2021 has no basis. The same is hereby struck out with costs to the respondents.

It is so ordered.DATED AND DELIVERED AT NAIROBI THIS 14TH DAY OF MARCH, 2022. A. MABEYA, FCIArbJUDGE