Bright Technologies Limited v Kenya Revenue Authority

Appellant’s Preliminary Objection 6. The Appellant, on the other hand, raises a preliminary objection to the Respondent’s Notice of Motion dated 21st February 2025, contending that the motion improperly invites this Court to finally determine the appeal at an interlocutory stage. 7. The Appellant further argues that neither the compounding order nor the Tribunal judgment can be summarily upheld through a preliminary objection, as the appeal raises substantive constitutional and procedural questions that require full adjudication on merit. Analysis and determination 8. From the pleadings and submissions, the following issues arise for determination: i. Whether the two objections meet the threshold of a proper preliminary objection. ii. Whether section 109 of the Tax Procedures Act ousts this Court’s jurisdiction in the circumstances of this appeal. iii. Whether either or both preliminary objections should be upheld. 9. The locus classicus on preliminary objections remains Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, where the Court held that a preliminary objection must raise a pure point of law, argued on the assumption that all facts pleaded by the other side are correct, and which, if upheld, would dispose of the suit. 10. A preliminary objection cannot be raised where facts are disputed or where the Court is called upon to exercise judicial discretion. 11. Jurisdiction, being a pure question of law, is properly raised by way of a preliminary objection. As was emphatically stated in Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR: “ Jurisdiction is everything. Without it, a court has no power to make one more step.” 8. The Respondent’s objection is anchored on Section 109(3)(e) of the Tax Procedures Act, which provides that a Compounding Order issued by the Commissioner: “ shall be final and not be subject to appeal” and section 109(3)(f), which further provides that such an order may be enforced in the same manner as a decree of the Court. 8. Section 109 permits the Commissioner to compound a tax offence and provides that where an offence is compounded, the taxpayer shall not be prosecuted for that offence. The provision further states that a compounding decision is final. 9. The Respondent submits that the Appeal before this Court directly challenges a Penalty Order arising from a Compounding Order and is therefore statutorily barred. 10. The Appellant, on the other hand, contends that it is not appealing against the Respondent’s statutory discretion to compound offences per se, but rather challenges the procedural fairness, legality, and constitutionality of the process that culminated in the issuance of the Compounding Order and the consequential Penalty Order. In that regard, the Appellant invokes Article 47 of the Constitution and https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/803/eng@2026-01-29 2

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the provisions of the Fair Administrative Action Act, 2015, asserting that the impugned administrative action was undertaken in violation of the guarantees therein. 11. This Court is mindful that statutory ouster or finality clauses must be construed restrictively. Nonetheless, where Parliament has in clear and unequivocal terms provided that a particular decision shall be final and not subject to appeal, the courts are enjoined to give effect to such legislative intent, save where a properly pleaded and demonstrable constitutional question is raised. 12. While it is correct that alleged violations of constitutional rights may, in appropriate cases, clothe this Court with jurisdiction notwithstanding a statutory finality clause, such questions cannot be conclusively determined at the level of a preliminary objection where they are fact-intensive and require evidentiary interrogation. At this stage, the Court is unable to determine whether the alleged procedural improprieties occurred without delving into contested factual matters. 13. Whether a statutory finality clause ousts the jurisdiction of the High Court in the face of alleged constitutional violations is therefore not an issue amenable to summary determination, as such an inquiry transcends the narrow parameters of a preliminary objection as defined in Mukisa Biscuit (Supra). 14. Turning to the Appellant’s preliminary objection, the Court agrees that a preliminary objection or an interlocutory application cannot be employed as a surrogate for the final determination of an appeal. The Respondent’s motion, in substance, invites the Court to conclusively dispose of the appeal without the benefit of the full record, the proceedings and reasoning of the Tax Appeals Tribunal, and a substantive examination of the constitutional questions raised. 15. The Court of Appeal in Suchan Investment Ltd v Ministry of National Heritage & Culture & 3 Others [2016] eKLR cautioned against the summary disposal of matters where allegations of procedural unfairness are raised, emphasizing that such claims ordinarily require evaluation on evidence and a reasoned determination on the merits. 16. To that extent, while the Respondent’s Preliminary Objection raises a jurisdictional question properly taken in limine, its determination is inextricably intertwined with contested factual and constitutional issues that cannot be resolved at this interlocutory stage. 21. In the result, and for the reasons set out herein, the Court makes the following orders: a. The Respondent’s Notice of Preliminary Objection dated 21st February 2025 is hereby dismissed. b. The Appellant’s Notice of Preliminary Objection dated 8th April 2025 is hereby upheld to the extent that the Respondent’s Notice of Motion dated 21st February 2025 seeks to summarily determine the appeal. c. The appeal shall proceed to hearing on its merits. d. Costs of the two Preliminary Objections shall abide the outcome of the appeal. It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 29TH DAY OF JANUARY 2026. P.M. MULWA JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/803/eng@2026-01-29 3

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In the presence of: Mr. Mwaniki h/b for Mr. Mbae for Appellant Mr. Wainaina h/b for Ms. Muthoni for Respondent Court Assistant: Carlos https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/803/eng@2026-01-29 4

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