Interactive Gaming & Lotteries Limited v Kenya Revenue Authority [2018] KECA 307 (KLR)
The bottom line
#The Court of Appeal confirmed that Kenyan taxpayers must use statutory objection and appeal procedures before going to court, and interpleader wins don't block KRA tax assessments.
What this practically means
#Executive summary
#Key legal issues
#Availability of an alternative statutory remedy barring judicial review
The objection and appeal procedures in the Income Tax Act and the Value Added Tax Act were available and suitable; judicial review was incompetent.
Sections 84 of the Income Tax Act and 50-52 of the Value Added Tax Act provide elaborate procedures obliging a taxpayer disputing an assessment to object to the Commissioner first, with appeal to the Tax Appeals Tribunal and thereafter the High Court. Judicial review is concerned with the decision-making process, not the merits of the decision. Where a statute donates power to a body, that body should carry out its mandate without court interference. The appellant bypassed these mechanisms improperly.
Effect of the interpleader judgment in HCCC No. 115 of 2011
The interpleader judgment determined only ownership of the funds held by Safaricom; it did not determine and could not bar KRA's claim for taxes.
Interpleader proceedings are brought by a stakeholder with no claim to funds to determine who among competing claimants owns them. Tax liability was never an issue in those proceedings, and a court in interpleader could not determine taxes due to KRA. KRA's on-record position in that suit that it made no claim against the appellant did not estop it, since estoppel cannot operate against a statute.
Scope of judicial review
Judicial review is concerned with the decision-making process, not the merits of the decision; the court cannot determine the correctness of a tax assessment in review proceedings.
Relying on Pili Management Consultants and Municipal Council of Mombasa, and on Professor Wade's doctrine of reasonableness, the Court endorsed the principle that a court in judicial review examines the process by which a public body reached its decision and must not usurp the discretion conferred by Parliament on the deciding authority, so long as the decision falls within the bounds of legal reasonableness.
Legal principles established
#- Where a statute provides an elaborate alternative remedy, a party must pursue that remedy rather than invoke the judicial review jurisdiction of the court.
- A judgment in interpleader proceedings determines only ownership of money or property held by a stakeholder and cannot determine or bar tax liability; it does not preclude the revenue authority from later assessing taxes.
- Estoppel cannot operate against a statute.
Court orders
#- 1.The appeal is dismissed
- 2.Costs of the appeal are awarded to the respondent
- On appeal from
- High Court at Nairobi
- Judicial Review Misc. Appl. No. 251 of 2014
- Jurisdiction invoked
- First appeal from the High Court in judicial review proceedings under the Court of Appeal's appellate jurisdiction (judgment issued under rule 32(3) of the Court of Appeal Rules)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Interactive Gaming & Lotteries Limited v Kenya Revenue Authority [2018] KECA 307 (KLR)", Case Analysis (2018). Civil Appeal No. 175 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/307/eng@2018-09-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.