Mobi Link Limited v Commissioner of Domestic Taxes [2023] KETAT 215 (KLR)

Mobi Link Limited v Commissioner of Domestic Taxes (Appeal 149 of 2023) [2023] KETAT 215 (KLR) (Civ) (5 May 2023) (Ruling)

Neutral citation: [2023] KETAT 215 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Civil

Appeal 149 of 2023

E.N Wafula, Chair, Cynthia B. Mayaka, A.K Kiprotich, Rodney Odhiambo Oluoch & E.N Njeru, Members

May 5, 2023

Between

Mobi Link Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Appellant vide a Notice of Motion application dated the 16TH February, 2023 filed under a Certificate of Urgency on the 17t February, 2023 seeks for the following Orders:-a.Spentb.That the Honourable Tribunal do issue an order lifting, vacating and setting aside the Respondent’s Agency Notices issued to the Managing Director of KCB Bank requiring them to pay PAYE of Kshs 370,000. 00 pending the full hearing and determination of this application and Appeal herein.c.That the Honourable Tribunal do issue an order restraining the Respondent either by itself, its agents, employees, servants or through any other person at its behest, from issuing any other agency notices against the referred bank accounts, or any account held and/or owned by the Appellant in any other company, and/or lift, vacate and set aside any other agency notice issued against any other bank or other account owned or held by the Appellant in any other company until this application and main Appeal is heard and determined.d.That the cost of this application be in the cause.e.That this Honourable Tribunal be pleased to issue any such orders as it deems just and expedient.

2. The application which is supported by an Affidavit sworn by Gladys Kemboi, a Director of the Appellant, on the 16th day of February, 2023 is premised on the following grounds:-a.That due to factors beyond the control of the intended Appellant it missed the statutory deadline for filing the Notice of Appeal and Appeal documents before the Tribunal.b.That the Appellant’s Director was ill and was under home care based remedy for months. That the Appellant learnt of the same this month after it assessed its emails and itax ledger.c.That the intended Appellant has approached this Honourable Tribunal at the earliest juncture and failure to file the Notice of Appeal within the stipulated timelines is as a result of factors beyond the Appellant’s control as the Director is located upcountry and was unable to access itax emails and was following up on his health.

3. The Respondent in opposition to the application filed a Replying Affidavit sworn by West Njururi, an officer of the Respondent, on the 22nd day of March, 2023 and filed on the 24th March, 2023 in which it stated as follows:-a.That the Respondent issued a demand on PAYE penalty amounting to Kshs 370,000. 00 for the period September 2018 to September 2021 based on failure to file monthly PAYE returns.b.That the Respondent issued a 7-day demand letter on 14th December, 2022. That the Appellant failed to honor the demand and its bank accounts were put on agency notice.c.That the Appellant did not and has never lodged an objection application for review in respect to the demand issued by the Respondent in accordance with Section 51 of the Tax Procedure Act.d.That the Appellant’s silence and inaction was construed as concession of the agency notices from the debt collection division.e.That vide a letter dated 14th December, 2022 the Appellant was clearly informed about the tax arrears and the Appellant was requested to provide relevant documents for review.f.That the Appeal is pre-mature and it does not meet the threshold of a proper appeal pursuant to the provisions of Sections 12 and 13 of the Tax Appeals Tribunal.g.That the application and Appeal have been filed before the wrong forum and as such the Tribunal lacks jurisdiction to hear and determine the application and the Appeal as it does not arise from an appealable decision.

Analysis and Findings 4. The parties inspite of the Tribunal’s directions and having been availed an opportunity to file written submissions opted not to file any submissions for consideration by the Tribunal.

5. The Tribunal notes that the Appellant inspite of its having been granted leave to file a Supplementary Affidavit for the purposes of making the agency notices and other relevant documents pertaining to the dispute available for consideration by the Tribunal failed to file any such Affidavit annexing the desired documents.

6. The Tribunal notes further that neither of the parties annexed to its separate Affidavit the documents alluded to in the Affidavits and the Appellant did not equally attach the tax decision in issue or any other document whatsoever to the Statement of Facts filed on its part before the Tribunal on the 17th day of February, 2023.

7. The Appellant in the Notice of Appeal dated 16th February, 2023 and filed before the Tribunal on the 17th February, 2023 indicates that it is dissatisfied with and intends to appeal against the whole of the tax decision issued by the Commissioner on the 14th February, 2023. This suggests that the Appeal was indeed filed timeously.

8. In both the Memorandum of Appeal and the Statement of Facts both dated the 16th day of February, 2023 and filed on the 17th February, 2023 the Appellant indicates that it is aggrieved by the decision of the Commissioner to demand for PAYE through a letter dated 14th December, 2022 and that the appeal is as against that decision for the demand made on 14th December, 2022.

9. The Respondent is clear that the Appellant did not lodge any notice of objection as against the demand for PAYE of Kshs 370,000. 00 made on the 14th December, 2022 and that to that extent there is no appealable decision and the Appeal filed is premature.

10. With the confusion manifest on record as to what decision the Appellant has commenced an appeal against it is difficult in the absence of documentation for the Tribunal to make an appropriate decision as to whether there is any proper appeal before the Tribunal to be preserved pending the full hearing and determination thereof.

11. With the glaring possibility of an absence of an appealable decision capable of being vindicated against by the Appellant before the Tribunal, the Tribunal is unable to discern if there are any taxes that had accrued for payment or otherwise and to determine whether the Respondent properly or otherwise exercised its discretion under Section 42 of the Tax Procedures Act to enforce the payment of accrued taxes through the issuance of the agency notices.

12. The Appellant has failed to appropriately prosecute its application and the Tribunal is in the circumstances unable to exercise its discretion under Section 18 of the Tax Appeals Tribunal Act, to issue any orders of stay or lifting of any agency notices with a calculated intention of preserving the efficacy of the appeal proceedings.

Disposition 13. The upshot of the foregoing is that the application lacks merit and the Tribunal accordingly proceeds to make the following Orders:-a.The application be and is hereby dismissed.b.No orders as to costs

DATED AND DELIVERED AT NAIROBI THIS 5TH DAY OF MAY, 2023. ..................................ERIC N. WAFULACHAIRMAN..................................CYNTHIA B. MAYAKAMEMBER..................................ABRAHAM KIPROTICHMEMBER..................................RODNEY O. OLUOCHMEMBER..................................ELISHAH NJERUMEMBER