Automated Summary
Key Facts
Shop N Buy Limited applied for an extension to file a tax appeal against assessments totaling KShs.494,937,222 for 2020-2022. The applicant claimed the delay was due to the director traveling abroad when the objection decision was issued on 30 September 2024 and subsequent illness beginning November 2024. The Tax Appeals Tribunal granted the application, finding the delay was justified by reasonable cause, the appeal is arguable on legal and factual grounds, and no prejudice would result to the respondent (Commissioner of Legal Services and Board Coordination).
Tax Type
The dispute involves Corporate Income Tax and Value-Added Tax (VAT) assessments for the period 2020-2022.
Issues
- Whether the applicant's absence from Kenya (as evidenced by passport records) and subsequent chronic illness (supported by medical reports) constitute a reasonable cause for the delay in filing the appeal beyond the statutory 30-day period under Section 13 of the Tax Appeals Tribunal Act, 2013.
- Whether the appeal raises arguable legal and factual issues sufficient to warrant consideration, referencing case law (e.g., Stanley Kangethe Kinyanjui Vs Tony Keter [2013] eKLR) that defines an 'arguable appeal' as one with plausible grounds to overturn the original tax assessments of KShs 494,937,222.
- Whether granting the extension would cause irreparable prejudice to the respondent (Commissioner of Legal Services and Board Coordination), considering their ability to enforce tax collections and penalties even if the appeal proceeds, as per legal principles in Patrick Maina Mwangi v Waweru Peter [2015] eKLR.
Tax Years
- 2020
- 2022
- 2021
Holdings
- The Tribunal concluded that the Appeal is merited and raises arguable legal and factual issues, referencing precedents such as Samuel Mwaura Muthumbi V Josephine Wanjiru Ngungi & Another (2018) eKLR, which emphasize that an arguable appeal is not required to guarantee success but must not be frivolous.
- The Tribunal found that the Respondent would not suffer prejudice if the extension was granted, as the taxes, interest, and penalties could still be enforced if the Applicant was found at fault, and the Applicant's right to pursue justice outweighs procedural delays.
- The Tribunal determined that the Applicant demonstrated reasonable cause for the delay in filing the Appeal, as the director had traveled out of the country around the time of the objection decision and subsequently fell ill with a chronic disorder, supported by passport records and a medical report.
Remedies
- Notice of Appeal and Appeal documents dated 10th July 2025 and filed on the 13th July 2025 be and are hereby deemed as duly filed and served
- The application is hereby allowed
- No orders as to costs
Tax Issue Category
Other
Legal Principles
- The Tribunal utilized the purposive approach to interpret the requirement for an 'arguable' appeal, focusing on whether the applicant raised plausible factual or legal grounds rather than demanding a high probability of success. This aligns with the principle that appeals should be heard if they are not frivolous and require full consideration.
- The Tribunal applied judicial review principles to assess the reasonableness of the delay in filing the appeal, considering factors like the period of delay, reasons for the delay, and potential prejudice to the respondent. It emphasized the discretionary nature of time extensions and the need to balance the applicant's right to appeal with the respondent's potential prejudice.
Disputed Tax Amount
494937222.00
Precedent Name
- Samuel Mwaura Muthumbi V Josephine Wanjiru Ngungi & Another
- Charles Karanja Kiiru v Charles Githinji Muigwa
- Edith Gichugu Koine vs. Stephen Njagi Thoithi
- Stanley Kangethe Kinyanjui Vs Tony Keter & others
- Kenya Commercial Bank Limited Vs Nicholas Ombija
- Sammy Mwangi Kiriethe & 2 others v Kenya Commercial Bank Ltd
- Balwant Singh v Jagdish Singh & Ors
Cited Statute
Tax Appeals Tribunal Act, 2013
Judge Name
- Robert M. Mutuma
- Jimmy M. Malla
- Eunice N. Ng'ang'a
- Elishah N. Njeru
- Gloria A. Ogaga
Passage Text
- The Respondent will not suffer prejudice since it will still be able to collect the taxes plus interest and penalties should the Applicant be found to be at fault.
- Looking at the draft Memorandum of Appeal filed, I am unable to say that the intended Appeal is inarguable... The Applicants have easily met that standard.
- An extension under subsection (3) may be granted owing to absence from Kenya, or sickness, or other reasonable cause that may have prevented the applicant from giving notice of appeal within the specified period.