Judgment summary
This is a ruling of the Tax Appeals Tribunal at Nairobi on a Notice of Motion filed by Guliyes Group Ltd, under a Certificate of Urgency, seeking an extension of time to file its Notice of Appeal, Memorandum of Appeal and Statement of Facts against a tax decision of the Commissioner Domestic Taxes.
The applicant also sought a stay of the tax decision and any consequent tax demands pending determination of the application.
The Tribunal considered Section 13 of the Tax Appeals Tribunal Act (Cap. 469A) and case law on extension of time, and dismissed the application for lack of merit, ordering each party to bear its own costs.
Background
The Applicant filed a Notice of Motion dated and filed on 23rd June, 2026, under a Certificate of Urgency, supported by the Supporting Affidavit of Muhamud Ahmed Mohamed [1].
The application sought orders including certification of urgency, extension of time to file the Notice of Appeal, Memorandum of Appeal and Statement of Facts against the Respondent's decision issued on 19th July 2021, that these documents be deemed properly on record, and that the tax decision and any consequent tax demands be stayed pending hearing of the application [1].
The Applicant relied on grounds including that its director was sick during the assessment and objection period, that it had engaged a tax representative who failed to act within statutory timelines, that it only learned of the failure after receiving a tax demand from the Respondent, that it could not reach the former tax representative who had left his place of work, and that it therefore engaged a new agent to institute the appeal [2].
Core dispute
The dispute concerned whether the Tribunal should exercise its discretion under Section 13 of the Tax Appeals Tribunal Act (Cap. 469A) to extend time for the Applicant to file its Notice of Appeal, Memorandum of Appeal and Statement of Facts, well beyond the statutory period.
The Applicant argued it had reasonable cause for the delay, namely its director's sickness and the failure of its former tax agent to act, and that it had an arguable appeal which would not prejudice the Respondent if the extension were granted [4].
The Respondent contended that the Applicant had not met the conditions of Section 13(4) of the Tax Appeal Tribunal Act, that the delay was not sufficiently explained and amounted to indolence, that the appeal disclosed no arguable grounds, and that granting the application would prejudice the Respondent by delaying tax collection [3], [5].
Court findings
The Tribunal noted that its power under Section 13 of the Tax Appeals Tribunal Act (Cap. 469A) is discretionary and must be exercised with caution, and cited the factors from Leo Sila Mutiso -vs- Rose Hellen Wangari Mwangi, namely the length of the delay, the reasons for the delay, the chances of the appeal succeeding, and the degree of prejudice to the respondent [6], [7].
The Tribunal found that the Applicant asserted its director was unwell and that its former tax agent had failed to act, but attached no supporting evidence, such as medical documentation or communication with the agent, to the supporting affidavit [8].
Under Section 30 of the TAT Act, the burden of proof lay on the Applicant, and this burden was not discharged [9].
The Tribunal held that the Applicant's later attempt to attach medical documents to its submissions was of no effect, since submissions are legal argument and not evidence, citing Daniel Toroitich Arap Moi vs. Mwangi Stephen Muriithi & Another [2014] eKLR [10], [11].
The Tribunal noted that the objection decision was issued on 21st May 2021, and the application for leave to appeal out of time was filed five years later, requiring the Applicant to explain the length of the delay, the reason it took five years to realise the appeal had not been filed, why it did not follow up with the tax agent, why no evidence was provided of the company's directors or of another director's ability to act, and why the company continued to operate despite the alleged illness of the responsible director [12].
The Tribunal concluded that the absence of answers to these matters meant the Applicant had failed to discharge its burden of proving the cause of the delay under Section 13(4) of the TAT Act and the principles in Nicholas Kiptoo Arap Korir Salat V Independent Electoral and Boundaries Commission & 7 others [2014] eKLR [13].
Outcome
The Tribunal held that the Applicant's application had not met the threshold set out under Section 13(4) of the Tax Appeals Tribunal Act (Cap 469A) [14].
The Application was dismissed for lack of merit, and each party was ordered to bear its own costs [15].
Major issues / areas of contention
- Whether the Applicant met the conditions of Section 13(4) of the Tax Appeals Tribunal Act (Cap. 469A) for an extension of time to file its Notice of Appeal, Memorandum of Appeal and Statement of Facts.
- Whether the five-year delay in filing the appeal or the application for extension was adequately explained.
- Whether evidence of the director's alleged sickness and the former tax agent's alleged failure was properly before the Tribunal.
- Whether submissions could be used to introduce evidence not contained in the supporting affidavit.
- Whether the Applicant demonstrated a prima facie arguable appeal.
- Whether granting the extension would prejudice the Respondent.