Mwai v Commissioner of Domestic Taxes [2025] KETAT 143 (KLR)

Mwai v Commissioner of Domestic Taxes (Tax Appeal E1388 of 2024) [2025] KETAT 143 (KLR) (21 February 2025) (Ruling)

Neutral citation: [2025] KETAT 143 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E1388 of 2024

RM Mutuma, Jephthah Njagi, D.K Ngala, T Vikiru & M Makau, Members

February 21, 2025

Between

Rachael Nyawira Mwai

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Applicant vide a Notice of Motion dated and filed on 30th November, 2024 and which was supported by an Affidavit sworn by the Applicant, on 31st October 2024 sought for the following Orders;a.Spent.b.That consequently, the said Memorandum of Appeal, Statement of Facts and tax decisions be deemed to have been properly filed within time.c.That the Honorable Tribunal be pleased to refrain the Respondent from issuing a further tax demand and withdraw an Agency Notice against the Applicant pending the hearing and determination of this Application and Appeal.d.That the Applicant be at liberty to apply for further orders as the Honorable Tribunal may deem just to grant.e.That the costs of this Application be in the cause.

2. The application is premised on the following grounds;a.The Respondent vide assessment orders dated 15th November 2019, which demanded principal plus penalty and interest all totaling to Kshs. 973,180. 00 relating to the tax year 2018. b.The Applicant duly objected to the said additional assessments vide the letter of objection acknowledgement receipts. This is due to lack of involvement in decision making by the Respondent.c.The Appellant has already been served with the demand notices and the Respondent has further issued a bank agency notice for the total principal amount plus interest and penalties all totaling to Kshs. 973,180. 00 as per confirmed assessment. This is despite our notification of intention to Appeal even on the KRA portal and in writing.d.There are clear timelines premised in law, which bind both parties herein.e.The Respondent has acted procedurally which action the applicant relied on to its detriment.f.It is important for the Honorable Tribunal to intervene and issues the orders sought.g.This application has not been without any undue delay.h.The Respondent will not suffer any prejudice if the orders sought herein are granted.i.It is in the interest of justice and fairness that the Application is allowed to pave way for hearing and determination of the appeal on merit.

3. The Respondent though directed by the Tribunal to file a response to the application did not file its response and therefore the application is not deemed as unopposed.

The Parties Submissions 4. The Tribunal vide orders made on 29th January 2025 directed that the application be canvassed by way of written submissions, however, none of the parties filed their respective written submissions.

Analysis and Findings 5. The Tribunal is enjoined to determine the question as to Appellant’s prayer for leave to appeal out of time and an order for withdrawal of an agency notice.

6. The power to extend time is discretionary and unfettered but the same must be exercised judiciously and it is not a right to be granted to the Applicant, the power is donated by Section 13 (3) of the Tax Appeals Tribunal Act which provides that:“The Tribunal may, upon application in writing, extend the time for filing the Notice of Appeal and for submitting the documents referred to in subsection (2).”It is therefore a discretionary power and not a right to be granted to the Applicant.

7. In the instant Application, the Tribunal notes that the Respondent’s decision being challenged was issued on 20th November 2024. The Appeal was lodged with the Tribunal vide the Notice of Appeal dated and filed on 30th November 2024. The Memorandum of Appeal and the Statement of Facts were dated and filed on 30th November 2024. This was ten days after the Respondent made the impugned decision.

8. The statutory timelines and provisions to file an Appeal have been clearly set out in the Tax Appeal Tribunal Act. Section 13 (3) of the Tax Appeals Tribunal Act provides as follows with regard to the statutory timelines in commencing an appeal process;“A notice of appeal to the Tribunal shall—a.be in writing;b.be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner. 2. The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the Tribunal, of—a.a memorandum of appeal;b.statement of facts; andc.the tax decision.”

9. In the instant Appeal, the taxpayer met the timelines as provided in the above provision of the law and it was not necessary to present the instant application to the Tribunal to extend time within which to file documents, since the Applicant was already within time.

10. Having found that the Notice of Appeal, the Memorandum of Appeal and the Statement of Facts were filed within the legal timelines, the Applicant’s application is not necessary in law.

11. The Applicant did not present any agency notice it alleged to have been issued to its bankers and it therefore not clear to which bank the notice allude to was issued to and when this was done.

12. The Tribunal is clothed with jurisdiction as envisaged under the provisions of Section 18 of the Tax Appeals Tribunal Act to stay or affecting the operation or implementation of the decision under review, which includes agency notices. Once an Appeal is lodged, the Respondent is obligated by law to desist from issuing or enforcing any recovery mechanism pending the hearing and determination of such an Appeal.

13. That said, the Applicant has not presented or demonstrated before the Tribunal the existences of the agency notice alluded to and as such the Tribunal cannot issue orders in vain.

14. Consequently, the Tribunal finds that the application is unnecessary in law and made in vain, as such the same fails.

Disposition 15. Based on the foregoing analysis, the Tribunal finds that the application is not merited. The Tribunal proceeds to make the following Orders:a.The application dated November 30, 2024 be and is hereby dismissed;b.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 21STDAY OF FEBRUARY 2025ROBERT M. MUTUMA.................................CHAIRPERSONJEPHTHAH NJAGI ......................................MEMBERDELILAH K. NGALA ......................................MEMBERDR, TIMOTHY B. VIKIRU................................. MEMBERMUTISO MAKAU..............................................MEMBER