The Kenya Revenue Authority has been allowed to collect more than Sh25 million taxes from Manuchar Kenya Limited.
The chemicals company was two years late in seeking to appeal the tax judgment.
Justice David Majanja, sitting at the Milimani law court’s Commercial and Tax Division, dismissed an application filed by Manuchar Kenya Limited seeking an extension to file an appeal out of time disputing the tax demanded.
Manuchar Kenya Limited filed an application on August 11 seeking an extension after the Tax Appeals Tribunal affirmed KRA’s demand for Sh25,431,177.
KRA had audited the company for 2010-12 and raised an assessment for Sh18,902,123.00 for corporation tax and Sh6,529,054.00 for VAT on March 17, 2016.
The case was dismissed because of the delay in lodging the case. The company filed a notice of appeal on April 25, 2018, and filed the application seeking extension on June 11 this year.
“While the applicant lodged a Notice of Appeal on April 25,2018, it did not lodge an appeal within the time prescribed by the law despite the fact that the Tribunal supplied the parties with certified copies of the proceedings and judgment by letters dated 17th May 2018 and 8th November 2018,” the judgment reads.
The applicant, explaining the delay, said it only received positive legal advice this year from its new advocates. The court said it should have sought a second legal opinion as it knew it had a substantial liability.
“That tax liability remained on its books for the entire period and must have stuck out like a sore thumb. It now seeks to revive its right of appeal after two years because it has received fresh legal advice. The fact it received wrong advice in the first place does not assist the applicant,” the judge said.
Justice Majanja ruled, “Timelines are an integral part of litigation and are necessary to ensure parties’ rights are determined fairly and expeditiously. While a party has a right to appeal against a judgment, the right is not open ended.”
(Edited by V. Graham)
