Bildin Company Limited v Commissioner of Domestic Taxes (Civil Application E339 of 2024) [2025] KECA 360 (KLR)
The bottom line
#Kenya's Court of Appeal blocked KRA from collecting Kshs 460 million from Bildin Company pending appeal, but only after the company deposits Kshs 30 million in court.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the applicant has satisfied the threshold for grant of orders under Rule 5(2)(b) of the Court of Appeal Rules, namely an arguable appeal and whether the appeal would be rendered nugatory if the orders sought are not granted
- 2.Whether the intended appeal is arguable
- 3.Whether the intended appeal would be rendered nugatory if the tax of Kshs. 460,866,860 is enforced pending appeal
- 4.Whether any conditional terms (security deposit) should attach to the relief sought
Key legal issues
#Whether the intended appeal is arguable
The appeal was held arguable because the issue of the 60-day timeline for determination of the objection, and the assessment of tax liability generally, required a full hearing.
The court found that the parties disagreed on when the 60-day statutory timeline for determining the objection started running, and that the issues raised in the draft memorandum of appeal on the tax assessment required a full hearing for effective determination. It therefore concluded the applicant satisfied the arguability limb, applying the settled standard that a single bona fide arguable ground suffices.
Whether the intended appeal would be rendered nugatory if enforcement proceeds
Given the colossal sum of Kshs. 460 million involved and its likely impact on the applicant's operations, the court was persuaded the nugatory limb was satisfied, notwithstanding the respondent's refund mechanism.
The court weighed the conflicting claims: the respondent had a statutory refund mechanism under Section 47 of the Tax Procedures Act, but the applicant stated remitting the amount would lead to winding up. The court held that any company in such a position would most likely suffer harm if asked to pay such a huge contested amount before the appeal is determined.
Whether relief should be conditional (security deposit)
A conditional injunction was granted, requiring a deposit of Kshs. 30 million within 90 days, default entailing automatic dismissal of the application.
Following Caltex Oil (Kenya) Ltd v Evanson Njiiri Wanjihia, the court balanced the hardships of both parties and, invoking the overriding objective under sections 3A and 3B of the Appellate Jurisdiction Act, found that a conditional stay/injunction would serve the interests of both parties given the huge sums involved.
Legal principles established
#- The jurisdiction of the Court of Appeal under Rule 5(2)(b) is original, independent and discretionary, and must be exercised judiciously and rationally, not out of impulsiveness or sympathy.
- An applicant under Rule 5(2)(b) must satisfy both twin principles: an arguable appeal and that the appeal would be rendered nugatory if the orders sought are not granted.
- A company facing payment of a huge contested sum will likely suffer harm if required to pay it before its appeal is heard, and where the hardships of both parties are balanced, the court may grant a conditional stay or injunction.
Court orders
#- 1.A temporary injunction restraining the respondent from enforcing the collection of taxes claimed from the applicant in the sum of Kshs. 460,866,860 in any manner, on condition that the applicant deposits the sum of Kshs. 30 million in Court within 90 days
- 2.In default of the deposit, the application to automatically stand dismissed
- 3.Costs of the application to abide the outcome of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court at Nairobi
- Commercial Tax Appeal No. E116 of 2023
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, read with sections 3, 3A and 3B of the Appellate Jurisdiction Act
Relief refused
#Unconditional temporary injunction without any security deposit
The court found it prudent, given the colossal sum and hardship on both sides, to issue a conditional injunction requiring a Kshs. 30 million deposit
Costs
The costs of the application shall abide the outcome of the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The jurisdiction of this Court under Rule 5(2)(b) is original, independent, and discretionary. However, we must exercise this discretion judiciously and rationally, and not out of impulsiveness or sympathy.
It is trite that the applicant must prove that there is an arguable appeal, that is, the appeal is not frivolous, and upon satisfying that principle, the applicant has the additional duty to demonstrate that the appeal if successful, would be rendered nugatory should the orders sought not be granted.
In the result, we grant a temporary injunction restraining the respondent from enforcing the collection of taxes claimed from the applicant in the sum of Kshs. 460,866,860 in any manner, on condition that the applicant deposits the sum of Kshs. 30 million in Court within 90 days. Upon default, the application will automatically stand dismissed. The costs of the application shall abide the outcome of the appeal.
Issues in the judgment
#The judgment refers to a Tax Appeals Tribunal judgment 'dated 14th July 2023' in the respondent's affidavit while the High Court judgment under appeal is described as 'delivered on 30th May 2024'; the affidavit elsewhere describes a High Court conditional stay 'on 14th December 2023', creating internal inconsistency in the chronology of dates as between the tribunal, High Court judgment and stay order.
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.
- Silet v Kenya Ports Authority (Miscellaneous Application E054 of 2024) [2025] KEELRC 810 (KLR)[2025] KEELRC 810 (KLR)13 Mar 2025applied
Cite this brief
#Cite this brief
Caselaw, "Bildin Company Limited v Commissioner of Domestic Taxes (Civil Application E339 of 2024) [2025] KECA 360 (KLR)", Case Analysis (2025). Civil Application (Rule 5(2)(b)) arising from Commercial Tax Appeal No. E116 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/360/eng@2025-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.