Twiga Stationeries & Printers Limited v Commissioner of Customs & Border Control [2023] KETAT 626 (KLR)

Twiga Stationeries & Printers Limited v Commissioner of Customs & Border Control (Tax Appeal E297 of 2023) [2023] KETAT 626 (KLR) (3 November 2023) (Ruling)

Neutral citation: [2023] KETAT 626 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E297 of 2023

E.N Wafula, Chair, AK Kiprotich, EN Njeru, M Makau & E Ng'ang'a, Members

November 3, 2023

Between

Twiga Stationeries & Printers Limited

Appellant

and

Commissioner of Customs & Border Control

Respondent

Ruling

1. The Appellant vide a Notice of Motion application dated 5th day of June 2023 filed under a certificate of urgency on the 13th June, 2023 sought for the following orders:-a.Spentb.That pending hearing and determination of the instant application and the Appeal the Honourable Tribunal be pleased to issue a stay of execution of the impugned demand notice dated 2nd February, 2022 demanding payment of the sum of Kshs. 11,662,451. 00c.That pending hearing and determination of the instant application and the Appeal this Honourable Tribunal be pleased to stay the implementation of any of the Respondent’s Agency Notices to any of the Applicant’s bankers for the sum of Kshs. 11,662,451. 00d.That this Honourable Tribunal be pleased to issue any other order in the interest of justice.e.That the costs of this application be provided for.

2. The application which is supported by an Affidavit sworn by Nilesh Shah, the managing Director of the Appellant, on the 5th day of June, 2023 is premised on the following grounds: -a.That the Respondent issued a demand notice to the Appellant dated 2nd February, 2022 demanding payment of the sum of Kshs. 11,662,451. 00 within 7 days.b.That the Appellant issued an objection to the foregoing demand notice on 25th February, 2023. c.That the Respondent did not issue any review decision within the statutory timelines.d.That the Respondent arbitrarily froze the Appellant’s accounts on 23rd May, 2022. That the agency notices were subsequently lifted following the orders of the Tribunal issued on 27th May, 2022. e.That the Appellant filed an appeal before the Tribunal on the basis of the impugned demand notice and which Appeal was subsequently struck out by the Tribunal for want of appealable decision.f.That the Appellant on receipt of a demand notice dated 21st May, 2023 applied for review noting that its objection of 25th February, 2022 was allowed any operation of the law.g.That by an email dated 2nd June, 2023 the Respondent purported that a review decision was issued to the Appellant.h.That the Respondent’s foregoing position is traversed in Bad faith and is to misguide the Honourable Tribunal.i.That the Appellant is apprehensive that the Respondent will once again freeze its accounts to recover the sum of Kshs. 11,662,451. 00 thereby endangering the Appellant’s operations.j.That is in the interest of justice that the Appellant’s application is determined on priority basis to ensure the Appellant is not prejudiced by the arbitrary actions of the Respondent.k.That the Appellant stands to suffer great prejudice should the order not be granted and the balance of convenience requires that this Honourable Tribunal adopts the path of lower risk of injustice by staying any execution of enforcement action by the Respondent.l.That the application has been made timeously and expeditiously without any unreasonable delay.m.That the Honourable Tribunal has jurisdiction to stay any enforcement actions by the Respondent and to give such orders that serve the interest of justice.

3. The Respondent in opposition to the application filed a Replying Affidavit sworn by Mutahi Wambui, an officer of the Respondent, on the 6th day of July, 2023 and filed on the 7th day of July, 2023 in which the Respondent raised the following grounds: -a.That the Respondent vide an email dated 31st May, 2022 forwarded a demand notice to the Appellant dated 2nd February, 2023 demanding payment of Kshs. 11,662,451. 00 in 7 days.b.That the demand was issued following a post clearance audit of the Appellant’s importations that revealed a short levy on consignments of paper.c.That the Appellant had earlier objected to the demand on 25th February, 2022. d.That the Appellant filed an Appeal before the Tribunal that was subsequently struck out for being incompetent.e.That the application is fatally defective and ought to be struck out.f.That the Appellant has not demonstrated any actual threat.g.That the court does not act on speculation but an actual threat.h.That Appellant admits that there is no agency notice issued against it and that to that extent no actual threat exists.i.That the application is therefore unattainable in law as the Tribunal cannot be made to predict a future breach.j.That the application is premature, bad in law, misconceived, incompetent and an abuse of the court’s time.

Analysis & Findings 4. The Respondent in compliance with the directions of the Tribunal in regard to the manner the application was to be conversed proceeded to file its written submission which have been duly considered in arriving at the findings hereinafter.

5. The jurisdiction for the Tribunal to consider an application for stay of enforcement of any demand or actions on the part of the Respondent that is likely to adversely impact on the proper determination of a matter before the Tribunal is founded under Section 18 of the Tax Appeals Tribunal Act which provides as follows;-“Where an appeal against a tax decision has been filed under this Act, 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 proceedings and determination of the appeal.”

6. The Respondent in opposing the application indicates that no agency notice has been issued against any of the Appellant’s bankers and that no action has been taken on the part of the Respondent with a calculated intention of enforcing payment of taxes in issue in the Appeal and that to that extent the application is based on mere speculation.

7. The Tribunal notes that the Appellant has not demonstrated any actual threat to its exercise of its right of appeal as against the Respondent’s decision that is said to form the substrum of this Appeal.

8. The Tribunal is not to issue any orders in speculation or rather in vain and will only exercise its discretion under section 18 of the Tax Appeals Tribunal Act for the purposes of preserving the efficacy of the proceedings in an appeal where there is clear evidence of actions being taken by the Respondent that are likely to undermine proceedings before the Tribunal.

Disposition 9. In the circumstances the Tribunal finds that the application lacks merits and the Orders that recommended themselves are as follows;a.The application be and is hereby dismissed.b.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF NOVEMBER, 2023ERIC NYONGESA WAFULA - CHAIRMANABRAHAM KIPROTICH - MEMBERELISHAH NJERU - MEMBERMUTISO MAKAU - MEMBEREUNICE NG’ANG’A - MEMBER