The High Court in Nairobi has allowed the Kenya Revenue Authority to collect taxes amounting over Sh 25 million from Manuchar Kenya Limited.
Justice David Majanja, sitting at the Milimani Law Court’s Commercial and Tax Division dismissed an application filed by Manuchar Kenya Limited seeking extension to file an appeal out of time to dispute the amount of taxes KRA is demanding.
Manuchar Kenya Limited moved to court on 11th August, 2020 in an application seeking extension to file an appeal out of time after Tax Appeals Tribunal in its judgement affirming KRA’s demand of Sh 25,431,177 in taxes.
KRA had carried out an audit against Manuchar Kenya Limited for the years 2010 – 2012 and raised an assessment for Sh 18,902,123.00 for Corporation Tax and Sh 6,529,054.00 for VAT on 17th March 2016.
The case was dismissed due to delay in lodging of the case. The company filed Notice of Appeal on 25th April 2018 evincing its intention to appeal against the Tribunal’s judgment and filed the application seeking extension on 11th June 2020.
“While the applicant lodged a Notice of Appeal on 25th April 2018, it did not lodge an appeal within the time prescribed by the law despite the fact that the Tribunal supplied the parties with certified copies of the proceedings and judgment by letters dated 17th May 2018 and 8th November 2018,” reads the judgement in part.
The applicant, while giving the reason for the delay, submitted that it only received positive legal advice this year from its new advocates on record. But Court noted that given the amount that the applicant (Manuchar Kenya Limited) had to pay following dismissal of its appeal, it would have sought a second legal opinion since it knew it had a substantial tax liability.
“That tax liability remained on its books for the entire period and must have stuck out like a sore thumb. It now seeks to revive its right of appeal after two years because it has received fresh legal advice. The fact that it received wrong advice in the first place does not assist the applicant,” the Judge further noted.
Justice Majanja held that “Timelines are an integral part of litigation and are necessary to ensure that parties’ rights are determined fairly and expeditiously. While a party has a right to appeal against a judgment, the right is not open ended.”
The Judge further stated that the right to appeal must be exercised timeously as a judgment settles the legal rights of the parties and marks the end of the dispute.
“Having failed to surmount the first hurdle of explaining the two-year inordinate delay in filing the appeal, I am not inclined to exercise the court’s discretion in the applicant’s favor,” Justice Majanja ruled.