Jumbo Foam Matrresses Industries Limited v Commissioner of Customs and Border Control [2024] KETAT 1491 (KLR)

Jumbo Foam Matrresses Industries Limited v Commissioner of Customs and Border Control (Miscellaneous Tax Appeal E081 of 2024) [2024] KETAT 1491 (KLR) (31 October 2024) (Ruling)

Neutral citation: [2024] KETAT 1491 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Miscellaneous Tax Appeal E081 of 2024

CA Muga, Chair, BK Terer, EN Njeru, E Ng'ang'a & SS Ololchike, Members

October 31, 2024

Between

Jumbo Foam Matrresses Industries Limited

Applicant

and

Commissioner of Customs and Border Control

Respondent

Ruling

1. The Applicant by way of a Notice of Motion dated 29th August, 2024 and filed on 30th August, 2024 sought the following Orders:a.Spent.b.That the Applicant be granted to file its Appeal out of time.c.That the costs of this Application be provided for.

2. The Application which was supported by an Affidavit sworn by the Applicant’s clearing agent, Mr. Michael Okach Omondi on the 29th day of August, 2024 was premised on the following grounds:a.That the Applicant is a registered Limited company mainly dealing with milling and selling steel.b.That the Applicant filed Tax Appeal No. E429 of 2023 Jumbo foam Matresses Industries Ltd vs Commissioner of Customs and Border Control within the timeframe provided under the Tax Appeals Tribunal Act, CAP 469A of the Laws of Kenya (hereinafter “TATA”).c.That grounded on the aforesaid Appeal the Applicant filed an application under certificate of urgency seeking to stay the Respondent’s decision against liquidation of the bank guarantee of KShs. 1,438,595. 00 by the Respondent held at I & M Bank Ltd pursuant to the Respondent's demand Notice Ref 22EMKIM401676184-3 dated 6th April, 2023. d.That incidentally the Tribunal did not deal with the urgency of the matter but dealt with the appeal and on 16th August, 2024 delivered a Judgment where it struck out the Appeal for being incompetent.e.That based on the Tribunal’s aforesaid decision the Applicant desired to file a fresh Appeal which it could not do unless granted leave by the Tribunal, the limitation period having lapsed during the pendency of Tax Appeal N0. E429 of 2023 Jumbo Foam Matresses Industries Ltd Vs Commissioner of Customs & Border Control hence the Applicant made this Application.f.That it was necessary for this Tribunal to give it leave before filing of the Appeal in view of the lapse of time as above mentioned.g.That the Respondent would not be prejudiced in any way, if leave is granted and, that in any case, the Respondent will have an opportunity to respond when the substantive appeal is filed.

3. On 5th September, 2024 the Tribunal directed the Respondent to file its Replying Affidavit on or before the 9th of September, 2024. When the matter was heard on 11th September, 2024 the Respondent had not complied and was given an opportunity to file its Replying affidavit by 9 pm on 11th September, 2024. The Respondent failed to comply as directed by Tribunal by filing its Response at 16. 45 hours on 12th September, 2024. The Respondent’s grounds of opposition have not therefore been considered by the Tribunal.

Analysis and Findings 4. The Tribunal notes that both parties complied with its directions of filing submissions with each party filing its respective submissions on 17th September, 2024. The Tribunal has only analysed the submissions of the Applicant in making its findings since the Respondent’s pleadings have not been considered.

5. The Tribunal notes the Applicant failed to file its Notice of Appeal as required by Section 12 of TATA pursuant to the Judgement delivered by the Tribunal on 16th August, 2024 in respect of Tax Appeal No. E429 of 2023 Jumbo Foam Matresses Industries Ltd Vs Commissioner of Customs and Border Control. Further, the Applicant failed to file its Statement of Facts pursuant to section 13 (2) of the TATA. The Applicant did not therefore file a proper record of Appeal. For those reasons, the Appeal of the Applicant was struck out as incompetent.

6. Section 18 of TATA dictates as follows:“18. Order to stay or affect the implementation of the decision under reviewWhere an appeal against a tax decision has been filed under this Act [emphasis ours] the Tribunal may make an order staying or otherwise affecting the operation or implementation of the decision under review as it considers appropriate for the purposes of securing the effectiveness of the proceeding and determination of the appeal.”

7. The foregoing section provides for the stay of any implementation of the Respondent’s decision to liquidate the bank guarantee of Kshs. 1,438,595. 00 where an Appeal has been filed with the Tribunal. From a review and perusal of the evidence of the parties, the Tribunal has not sighted a record of Appeal filed by the Applicant and served on the Respondent. Accordingly, the finding of the Tribunal is that Orders to stay the liquidation of the bank guarantee of Kshs. 1,438,595. 00 could only be granted if the Application for stay was interlocutory and could only have been appropriately entertained after an Appeal was filed with the Tribunal.

8. The Tribunal notes the failure of the Applicant in filing its proper record of Appeal pursuant to section 12 and 13 of the TATA led to the striking out of the Appeal and this also means that the Tribunal is unable to grant orders staying execution of the liquidation of the bank guarantee.

9. The Tribunal infers that the Respondent’s action of failing to comply with the Tribunal’s directions indicate its unwillingness to respond to the Application and that it is therefore not opposed to this Application. The Tribunal however, finds that in any case, the Respondent will not suffer prejudice if this Application is allowed as it will still be able to collect the taxes plus interest and penalties should the Applicant be found to be at fault.

Disposition 10. Based on the foregoing analysis, the Tribunal finds that the Application succeeds and accordingly proceeds to make the following Orders:a.The Application be and is hereby allowed.b.Leave be and is hereby granted for the Applicant to file and serve its Notice of Appeal, Memorandum of Appeal and Statement of Facts within 14 days of this Ruling.c.The Respondent to file and serve its response to the Appeal within 30 days of the date of being served with the Applicants, Notice of Appeal, Memorandum of Appeal and Statement of Facts.d.No orders as to costs.

11. It is so Ordered.

DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF OCTOBER, 2024. CHRISTINE A. MUGA...........................CHAIRPERSONBONIFACE K. TERER...........................MEMBERELISHAH N. NJERU............................MEMBEREUNICE N. NG’ANG’A......................... MEMBEROLOLCHIKE S. SPENCER........................MEMBER