Coastal Bottlers Limited v The Commissioner of Domestic Taxes
The bottom line
#The Court of Appeal refused to halt tax recovery because Coastal Bottlers showed no evidence its appeal would be pointless if it paid.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal would be rendered nugatory if stay is refused
No nugatory effect was shown. The principal tax of Ksh.62,000,000 had already been paid without serious effect on operations, no further penalty or interest was accruing, and the balance was under waiver consideration by the Minister; moreover no evidence such as a balance sheet supported the claim of impecuniosity.
The court accepted the respondent counsel's uncontradicted statements that the principal tax had been paid and no further penalty or interest was being charged. The applicant's director's apprehension that payment would paralyze operations was contradicted by the fact of the Ksh.62 million payment and the absence of evidence, e.g. a balance sheet, showing business jeopardy. The nugatory principle from Oraro & Rachier and Reliance Bank was not satisfied on these facts.
Whether there was any order capable of being stayed
The High Court merely rejected the prayers for prohibition, certiorari and mandamus and made no enforceable order, which explains the curious framing of the prayer seeking stay of statutory recovery proceedings rather than of an order.
Because the High Court decision was a rejection of prerogative orders, there was nothing enforceable to stay; the applicant instead framed its prayer against the respondent's statutory recovery mechanisms under the Customs & Excise Act. The court noted this curiously framed prayer but proceeded to determine the application on the nugatory-ness threshold.
Legal principles established
#- An applicant under Rule 5(2)(b) must, in addition to showing an arguable appeal, demonstrate that the success of the intended appeal would be rendered nugatory if stay is not granted.
- Nugatory-ness is assessed by weighing the claims and hardship of both sides, on evidence, not on mere apprehension.
- A stay cannot issue where there is no order capable of being enforced against the applicant.
Court orders
#- 1.The applicant's notice of motion under Rule 5(2)(b) is dismissed
- 2.Costs of the dismissed motion to be in the intended appeal
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Misc. Civil Application No. 1756 of 2005
- Jurisdiction invoked
- Rule 5(2)(b) and Rule 42 of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- F & S Scientific Limited & 1 other v Kenya Revenue Authority & 1 other[2013] KECA 383 (KLR)8 Mar 2013applied
Cite this brief
#Cite this brief
Caselaw, "Coastal Bottlers Limited v The Commissioner of Domestic Taxes", Case Analysis (2009). Civil Application 91 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/190/eng@2009-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.