African Banking Corporation Limited v Commissioner of Domestic Taxes

4. We have considered the application, the supporting adavit of Louis Omukhulu, the applicant’s written submissions dated 24th July 2023 which were orally highlighted before us on 25th October 2023 by learned counsel Miss. Wambui Njue holding brief for Ms. Diana Chepkemoi. We have also considered the replying adavit sworn by Philip Mugoya, an ocer of the respondent, the respondent’s written submissions dated 7th August 2023 which we orally highlighted before us by Mr. E. Nyapara learned counsel for the respondent. 5. The applicant’s grievances with the impugned judgment include complaints that the learned Judge of the High Court erred in determining that exported services are excisable despite absence of express provision in that regard under the Customs and Excise Act; and that the Judge wrongly applied provisions of the Finance Act 2013 retroactively. The respondent on the other hand has contended that the appeal is not arguable as the issues were satisfactorily resolved in the judgment of the High Court. Bearing in mind that an arguable appeal is not one that must necessarily succeed (See Kenya Industrial Estate Limited & anor v. Matilda Tenge Mwachia [2021] eKLR), we are persuaded that the intended appeal is not frivolous. It is arguable. 6. As to whether the appeal will be rendered nugatory unless the orders sought are granted, it was submitted by counsel for the applicant that the amount of Kshs.86,076,985 demanded by the respondent is colossal and enforcement of the entire amount pending the determination of the appeal will signicantly impact the cash ows of the applicant. The applicant has oered to provide security by way of bank guarantee. 7. Counsel for the respondent on the other hand submitted that what is sought to be stayed is reversible and the appeal will not be rendered nugatory; that the respondent is capable of refunding the amount in question should the appeal ultimately succeed. Counsel urged that should the Court be inclined to grant the orders sought, it should be conditional upon the applicant paying over “sucient security being 60% of the total taxes demanded” The decision in Caltex Oil (Kenya) Ltd v. Evanson Njiiri Wapuihia [2009] eKLR was cited. 8. Having considered the rival positions, we are inclined to agree that payment of the entire amount pending the determination of the appeal may aect the applicant’s operations. See Equity Bank of Kenya Limited v. Commissioner of Domestic Taxes [2022] KECA 128 (KLR). Balancing the interests of the parties, what commends itself to us is to order, which we hereby do, a stay of execution of the demand by the respondent conditional upon the applicant paying over to the respondent, within 30 days from the date of delivery of this ruling, an amount of Kshs.25,000,000.00. In default, the order of stay granted herein shall automatically lapse and the respondent shall be at liberty to proceed with execution. 9. The costs of the application shall be costs in the appeal. DATED AND DELIVERED AT NAIROBI THIS 15TH DAY OF DECEMBER 2023 S. GATEMBU KAIRU, FCIArb ..................................... JUDGE OF APPEAL F. TUIYOTT ..................................... JUDGE OF APPEAL https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1669/eng@2023-12-15 2

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J. LESIIT ..................................... JUDGE OF APPEAL I certify that this is a true copy of the original. signed DEPUTY REGISTRAR https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1669/eng@2023-12-15 3

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