One Petroleum Limited & 3 others v Kenya Revenue Authority [2021] eKLR

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

CONSTITUTIONAL AND JUDICIAL REVIEW DIVISION

JUDICIAL REVIEW APPLICATION NO. E012 OF 2020

CONSOLIDATED WITH

JUDICIAL REVIEW APPLICATION NO. E010

JUDICIAL REVIEW APPLICATION NO. E009
JUDICIAL REVIEW APPLICATIONNO. E011

1. ONE PETROLEUM LIMITED

2. ONE GAS LIMITED

3. AFRICAN GAS & OIL COMPANY LIMITED

4. GRAIN BULK HANDLERS LIMITED.........................................APPLICANTS

VERSUS

KENYA REVENUE AUTHORITY....................................................RESPONDENT

RULING

1. This ruling is with respect to four Judicial Review applications as follows:

(i) Judicial Review Application No. E012

(ii) Judicial Review Application No. E010

(iii) Judicial Review Application No. E009

(iv) Judicial Review Application No. E011

2. The above four Applicants filed separate but similar Notices of Motion applications dated 5/1/2021 and filed in court on 6/1/2021

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pursuant to leave granted by the court on 16/12/2020.

3. Because the application raise similar issues, the parties, with the concurrence of the court agreed to consolidate the applications
for hearing and determination together. For the purposes aforesaid, this particular file, being Judicial Review Application No. E012
of 2020 was adopted as the lead file in which pleadings and submissions were made.

4. Therefore, the ruling herein applies to all the four applications before the court, as varied.

The Application

5. Pursuant to the leave granted by this court on 16/12/2020, the Ex parte Applicant filed the Notice of Motion herein dated
5/1/2021 praying for Judicial Review orders as follows:

a. THAT an order of certiorari do issue to remove into this Court and quash the entire decision of the Commissioner of Tax
communicated to the Ex Parte Applicant vide an email dated 27th October, 2020 revoking and withdrawing the Ex Parte
Applicant’s Tax Compliance Certificate No. KRALTO1168147120 effective the same date.

b. THAT an order of Mandamus do issue directed to the Commissioner of Tax to re instate the Ex Parte Applicant’s Tax
Compliance Certificate No. KRALTO1168147120 dated 20th March, 2020 and to deem the aforesaid Tax Compliance
Certificate as Valid, legitimate and legal for all purposes as from the date of revocation and/or withdrawal.

c. THAT an order of Prohibition do issue directed to the Respondent prohibiting the Respondent and its agents from further
withdrawal Ex Parte Applicant’s Tax Compliance Certificate No. KRALTO1168147120 without notice and without due
process permitted to the Ex Parte Applicant.

d. The costs of the application be borne by the Respondent.

6. The motion is premised on the grounds set out therein and is supported by other documents as follows:

a. Statement of facts dated 15th December, 2020;

b. Verifying Affidavit deponed on 15th December, 2020;

c. Supporting affidavit deponed on 15th December, 2020; and

d. Supporting affidavit deponed on 5th January, 2021;

7. The Ex parte Applicant’s case is that it is engaged in the business of trading in petroleum products having been incorporated in
the year 2010 and it is a registered tax payer with the Respondent agency vide Personal Identification Number P0513448561. The
Ex Parte Applicant contends that it has dutifully and without fail been submitting its due tax returns to the Respondent agency in
line with the provisions of Section 24 (1) of the Tax Procedures Act No. 2015, and has always been issued with the pertinent Tax
Compliance Certificate, the latest having been issued on 20/3/2020.

8. The Ex Parte Applicant contends that it has received accolades from the Certified Public Accountants of Kenya for being a top
tax payer in the country and that its accounts and audit is done by the internationally reputable firm of Deloitte & Associates. The
Ex Parte Applicant further avers that over the years, any issues arising as regards its tax liability and compliance have always been
dealt with through mutual co-operation involving full disclosure of information and furnishing of the relevant supporting
documents, if and when required to do so.

9. It is the Ex Parte Applicant’s case that the Respondent carried out an audit for the period January, 2015 to December, 2018
where the Corporation and Withholding Tax due from the Ex Parte Applicant were assessed and subsequently the Ex Parte

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Applicant settled the amounts including penalties and interests.

10. It was averred by the Ex Parte Applicant that pursuant to Section 59 of the Tax Procedure Act No. 29 of 2015, the
Commissioner of Tax may in the course of establishing the Tax Compliance status of an individual request for the relevant
information and supporting documentation and it is an offence for an individual not to comply once such a request has been made.
It further averred that since it was granted the latest Tax Compliance Certificate, it has not received any requests by the Respondent
or its agents for further information as regards its tax compliance status.

11. Accordingly, therefore, the Ex Parte Applicant avers that it was surprised when it received an e-mail on 27/10/2020 from the
Respondent’s Commissioner for Domestic Tax Department that the Ex Parte Applicant’s Tax Compliance Certificate No.
KRALTO1168147120 had been withdrawn and the Ex Parte Applicant was at liberty to consult their local tax office for any
queries. Upon the receipt of the said e-mail, the Ex Parte Applicant wrote to the Respondent seeking further particulars vide a letter
dated 28/10/2020. However, the said letter is yet to elicit any response.

12. The Ex Parte Applicant contends that the decisions to withdraw the Tax Compliance Certificate was made without reference to
it and without providing reasons thereof; was irrational and fails the proportionality test, a principle which mandates an
administrative authority when exercising discretionary power to maintain proper balance between the adverse effects of its decision
vis-à-vis the rights of persons and the purpose which it pursues.

13. Further the Ex Parte Applicant avers that the impugned decision fails the balancing and necessity test; that where there is any
assessment done by the respondent or the need for clarification of any tax information or liability from the Ex Parte Applicant, the
Respondent is mandated to afford the entity in question the basis and details of the said query and accord them adequate opportunity
to respond to the same. This was not done in the Ex Parte Applicant’s case.

14.It is the Ex Parte Applicant’s case that the Respondent’s decision is unconstitutional, illegal, unreasonable, and without
justification and is made in excess of jurisdiction, and for that reason, the same should be quashed by this Court.

The Response

15. In response to the application by the Ex Parte Applicant, the Respondent filed an application under Certificate of Urgency dated
and filed on 6/1/2021 seeking orders to vacate stay orders issued on 16/12/2020 to the Ex Parte Applicant. However, on 25/1/2021
Mr. Ngare learned counsel for the Respondent informed the Court that the Respondent’s application dated 6/1/2021 was
abandoned and the same was deemed as a response to the substantive motion dated 5/1/2021 by the Ex Parte Applicant. To that
extent, the motion herein is opposed by the Respondent vide a supporting affidavit sworn on 6/1/2021 and a replying affidavit sworn
on 22/1/2021 both by Cynthia Agutu (an officer with the Respondent).

16. The Respondent avers that the Ex Parte Applicant is an associated company to Africa Gas and Oil Company Limited, One Gas
Ltd and Grain Bulk Handling Limited in terms of common directorship with the shared directors being; Mutjaba Mohamed Jaffer,
Ali Abbas Jaffer and Mohamed Husein Jafer.

17. It is the Respondent’s case that it conducted investigations into the tax affairs of the Ex Parte Applicant and its associates.
Through Mombasa Misc Application No. 314 of 2020 the Respondent obtained search orders dated 16/10/2020 and pursuant to
Section 60 (1) of the Tax Procedures Act, it proceeded to conduct a search and seizure operation, and the preliminary analysis of the
recoveries made pointed at African Gas & Oil Ltd as an importer of LPG, and a reseller of the same to the various purchasers
including the Ex Parte Applicant.

18. The Respondent contends that Africa Gas and Oil Company Limited was a LPG handler from 2013-2016 and an importer from
2017-2019. The Respondent further contends that the investigation entailed analysis of voluminous documents seized from the Ex
Parte Applicant lawfully and that evidence analysis is still ongoing.

19. The Respondent avers that preliminary finding of the analysis of the Ex Parte Applicant revealed massive under declaration or
omission of sales occasioning the Respondent a revenue loss of Kshs. 68 million which led the Respondent to withdraw the Tax
Compliance Certificate held by the Ex Parte Applicant pursuant to the provisions of Section 72 (3) of the Tax Procedures Act.

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20. The Respondent avers that there is a notice that appears on the face of a Tax Compliance Certificate that the Respondent
reserves the right to withdraw the Tax Compliance Certificate if new evidence materially alters the tax compliance status of the
holder.

21. It further contends that this Court lacks the requisite jurisdiction to grant the orders sought by the Ex Parte Applicant as the
matter entails a tax dispute which jurisdiction falls with the Tax Appeals Tribunal.

22. The Ex Parte Applicant had also filed a replying affidavit in opposition to the Respondent’s notice of motion dated 6/1/2021
sworn by Joseph Mwella on 15/1/2021.

23. The Ex Parte Applicant stated that the alleged associated companies are distinct entities with separate legal identities from their
respective shareholders and directors. That pursuant to Section 46 of the Tax Procedures Act, the only circumstances in which the
Respondnet can raise a tax assessment on a legal entity by virtue of common shareholding is where such legal entity has a tax
liability and the entity has transferred its business and/or assets to its related entities.

24. It was averred by the Ex Parte Applicant that a tax can only be deemed to be due pursuant to a self-assessment by a tax payer or
by the respondent through a default, advance or amended assessment under Sections 29, 30 and 31 of the Tax Procedures Act and,
therefore the Respondent has no power under the law to withdraw the Ex Parte Applicant’s Tax Compliance Certificate simply
because it is conducting an investigation into the Applicant’s tax affairs.

25. The Ex Parte Applicant maintains that the Respondent has not demonstrated any investigations into the tax affairs of the Ex
Parte Applicant, and neither has there been any investigation on going or otherwise into its tax affairs. It is the Ex Parte
Applicant’s case that it has never been furnished by the Respondent with the findings of the alleged investigations hence it could
not be asked to disclose what was not within the knowledge of her officers.

26. The Ex Parte Applicant contends that the Respondent’s decision to withdraw the Ex parte Applicant’s Tax Compliance
Certificate is not a tax decision within the meaning of Section 3 (1) of the Tax Procedures Act No. 29 of 2015 thus it is not barred
by Section 51 (1) of the Tax Procedures Act from carrying out its mandate. The Ex Parte Applicant further contends that the
withdrawal of the Tax Compliance Certificate was an administrative action by the Respondent. Therefore, it is not barred by either
the Tax Procedures Act or the Tax Appeals Tribunal Act, 2019 from subjecting an administrative action by the Respondent to
judicial scrutiny by way of Judicial Review.

27. The Ex Parte Applicant stated that the rules of fairness under Article 47 of the Constitution mandates that the taxpayer be given
the reasons for the withdrawal of the Tax Compliance Certificate and may be heard on any issue that may result in the withdrawal
before the withdrawal is effected.

Submissions

28. The application was canvassed through written submissions which were highlighted on 23/3/2021. The Ex parte Applicants filed
submissions on 5/2/2021 and supplementary submission on 17/3/021 while the Respondent filed submissions on 11/3/2021.

29. Dr. Nyaundi, learned counsel for the Ex Parte Applicant submitted that the withdrawal of the Tax Compliance Certificate was
not preceded with any request for information or documents or anything in accordance with Section 59 of the Tax Procedures Act,
and that the Ex Parte Applicants’ Tax Compliance Certificate were just withdrawn one morning without any demand which
amounts to a blatant violation of any tax payer’s legitimate expectation that Tax Certificate once issued will remain for the duration
of the tax period.

30. Dr. Nyaundi submitted that the Respondent’s actions also offend Articles 47 and 50 of the Constitution and the Fair
Administrative Actions Act 2015. It was submitted by Dr. Nyaundi that the withdrawal of Tax Compliance Certificate places the tax
payer’s business into jeopardy, and can only be withdrawn, if at all, after due process of the law because improcedural withdraw
will lead the Applicant to suffer fractional risk with their bankers and other operatives.

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31. Dr. Nyaundi further submitted that the Tax Compliance Certificate for Grain Bulk has been withdrawn without any allegation
that they are not paying tax. Instead it was withdrawn on allegations that there were active investigations on Africa Gas and Oil Ltd
which is a related Company, which reason is not sufficient to annul the Tax Compliance Certificate of any of the companies herein.

32. Counsel submitted that the Ex Parte Applicant is an independent entity and pays taxes independently. He cited Section 72 of the
Tax Procedures Act and submitted that the provisions thereunder are not applicable herein, and that it’s not enough on basis of
investigations to withdraw a tax payer’s Tax Compliance Certificate. There must be a finding which is communicated to the
Applicant to remedy, a demand note and a notice to the tax payer before a Tax Compliance Certificate is cancelled and/or annulled.

33. Dr. Nyaundi submitted that Under Section 3 of the Tax Appeal Tribunal Act, the Respondent’s unilateral action is not an
appealable decision and that there is no decision by the Respondnet that can be appealed from. Counsel maintained that the
Respondent’s actions are illegal and illegitimate and places undue pressure on the applicant. Dr, Nyaundi further submitted that at
the time of making the application herein the Tax Compliance Certificates had not yet expired making the actions by the
Respondent’s illegal.

34. Mr. Ngare, learned counsel for the Respondent on the other hand submitted that part 9 of the Tax Procedures Act clothes the
Respondent with powers of enforcement; Section 59 requires production of records; Section 58 donates the power to inspect books
and records; while Section 60 gives the powers to search and seize property, documents and data.

35. Mr. Ngare submitted that the Ex Parte Applicant failed to disclose that the respondent had obtained a lawful order from the
lower Court to search and seize the Ex parte Applicant’s goods. The said Order allowed the Respondent to search, seize and carry
out data for purposes of investigations. Counsel further submitted that pursuant to Section 60 (7), (8), and (9) (g) of the Tax
Procedures Act, such seized data or record can be held by the Respondent for up to 6 months. Therefore, investigations can also take
up to six months.

36. Mr. Ngare submitted that the Tax Compliance Certificate bears a caveat to the extent that the Respondent has the right to
withdraw the certificate if there is reason. Therefore, the issue of legitimate expectation does not arise. Counsel further submitted
that the Respondent is entitled to carry out investigations and the said investigations are still ongoing. Further due to the relationship
between the companies, investigations cannot be limited to the Ex Parte Applicants alone. Mr. Ngare submitted that no legitimate
expectation can accrue to a party against express provisions of the law. See Mololine Traders Limited & Another v Tourism
Regulatory Authority & 4 Others [2020] eKLR.

37. Mr. Ngare submitted that where the Tax Compliance Certificates have expired, an order of Mandamus cannot issue, and that
there is also no evidence that the Ex Parte Applicant has applied to renew the said Certificate as provided for under Section 72 of
the Tax Procedures Act. Counsel urged this Court to dismiss the application with costs.

38. Dr. Nyaundi in response to the submissions by Mr. Ngare submitted that this Court has not been shown any provisions in the
Tax Procedures Act which provides for a unilateral cancellation of a Tax Compliance Certificate. He further submitted that the
order issued by the lower Court was not in respect to all the Ex Parte Applicants. They were only granted in respect of African Gas
and Oil Company Limited. Counsel submitted that there is no investigation against all the other Ex Parte Applicants herein and
hence there was nothing to disclose and in any event, one can only disclose where there is already a finding as a result of the
investigations.

Determination

39. I have carefully considered the Ex Parte Applicant’s case and the responses by the Respondent and their respective advocates’
submissions and authorities relied on. Several questions flow from the said submissions, but the main issue is whether the
Applicant is entitled to the Judicial Review orders sought. I am guided by the decision of the House of Lords in R v Chief
Constable of North Wales, ex p. Evans [1982] UKHL 10 (22 July 1982) where it was held as follows:

“the remedy of judicial review was said to be available for the purposes of preventing excessive exercise of power by
administrative bodies or officials; to ensure that an individual is given fair treatment by administrative authorities; to keep
administrative excesses in check, that is to check maladministration; and to provide remedy to those aggrieved as a result of

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excessive exercise of power by administrative bodies.”

40. It is trite that Judicial Review proceedings are not concerned with the merits of the decision but rather with the decision making
process. In Cortec Mining Kenya Limited v Cabinet Secretary, Attorney General & 8 others [2015] eKLR the Court of
Appeal discussed the judicial review remedies as follows:

“…certiorari issues to quash decisions for errors of law in making such decisions or for failure to act fairly towards the
person who may be adversely affected by such decision. Prohibition is directed to an inferior tribunal or body from
continuing proceedings in excess of its jurisdiction or in contravention of the laws of the land. The order of mandamus
compels the performance of a public duty imposed by statute where the person or body on whom the duty is imposed fails or
refuses to perform the same.”

41. The Ex Parte Applicants contend that the Respondent arbitrarily withdrew their Tax Compliance Certificates without citing any
reasons and or affording them an opportunity to be heard. They also contend that prior to the withdrawal of their Tax Compliance
Certificates, the Respondent did not issue them with any demand notice that they failed to comply with to warrant the drastic action
taken to withdraw the Tax Compliance Certificate.

42. The Respondent, on the other hand, avers that the Ex-Parte Applicants are under investigations for massive under declaration or
omission of sales thus occasioning the Respondent on behalf of the general public revenue loss of Kshs. 68 million. Therefore, the
Respondent was empowered under Section 72 of the Tax Procedure Act No. 29 of 2015 to withdraw the Ex Parte Applicants’ Tax
Compliance Certificates.

43. It was also contended by the respondent that they obtained an order from the lower Court dated 16/10/2020 which allowed them
to conduct a search and seize operation, and as a result thereof, a preliminary analysis of the recoveries made pointed at Africa Gas
& Oil Company Limited which is an associated company to the Ex Parte Applicant’s herein.

44. The Court of Appeal in Suchan Investment Limited v Ministry of National Heritage & Culture & 3 others, [2016]
eKLR noted with emphasis that Article 47 of the constitution as read with the ground of review provided by Section 7 of
the Fair Administrative Action Act bring forth new jurisprudence in judicial review in that judicial review henceforth included
aspects of merit review of administrative action. However, the reviewing court has no authority to substitute its own decision for
that of the administrator.

45. From the reading of Section 7 of the Fair Administrative Actions Act, it is evident that there are other grounds for judicial
review such as rationality, and reasonableness of a decision, its proportionality; whether legitimate expectations have been violated
by the decision, and whether the decision was made for proper or improper purposes. other than the commonly known grounds
being jurisdictional and procedural aspects of decision making.

46. In the present case, the Ex Parte Applicants contend that the cause of action herein arose as a result of failure to be accorded a
right to fair hearing and fair administrative action. It is not in dispute that prior to the Respondent’s decision to withdraw the Ex
Parte Applicants’ Tax Compliance Certificates, no demand and or notice was issued to them by the Respondent. It is also not
disputed that even when the Ex Parte Applicant herein wrote to the Respondent requesting for reasons for the withdrawal, the
Respondent failed and or declined to respond to the said letter. It was also averred by the Respondent that this Court lacks
jurisdiction to grant the orders sought herein and that the Ex Parte Applicants should have channeled their grievances to the Tax
Appeals Tribunal. This assertion is clearly incorrect pursuant to the foregoing and the discourse hereunder.

47. Section 72 of the Tax Procedure Act No. 29 of 2015 provides as hereunder:

1. Any person may apply to the Commissioner for a Tax Compliance Certificate.

2. The Commissioner may issue a Tax Compliance Certificate, which shall be valid for the period specified in the certificate,
upon the applicant fulfilling conditions that the Commissioner may impose.

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3. The Commissioner may revoke a Tax Compliance Certificate issued under sub-section (2) if the Commissioner finds that
the person has failed to honour a demand for tax issued by the Commissioner or has violated the provisions of a tax law.

48. It is not in dispute that all the Ex Parte Applicants herein were issued with Tax Compliance Certificates for the year 2020 by the
Respondent which were set to expire on different dates and months in the year 2021. In Republic v Kenya Revenue Authority &
Another ex parte Tradewise Agencies [2013] eKLR the Court extensively dealt with the issue of the effect of the issuance of a
Tax Compliance Certificate as follows:

“Although the respondent contends that a person who complies with the provisions of the Seventh Schedule paragraph 7 is
eligible for a Tax Compliance Certificate because the said person has filed tax returns and paid what he has assessed
himself as due to the Commissioner and that a Tax Compliance Certificate does not mean that a person’s accounts are
perfect or beyond reproach and only an audit conducted by the First Respondent can certify accounts to be beyond reproach
for tax purposes the same certificates indicate that the authority reserves the right to withdraw the certificate if new
evidence materially alters the tax compliance status of the recipient. Why would the certificate be withdrawn if it is not
evidence of compliance" If it is only evidence of submission of remission of taxes in which event it is not binding on the
authority there would be reason for it to be withdrawn by the authority. The only conclusion one would draw is that the
certificate is prima facie evidence of compliance and until withdrawn the same is proof of fulfilment of the obligation to pay
taxes...Whereas this Court cannot hold that the applicant was not obliged to pay any taxes, the 1st respondent was expected
to notify the applicant of any discovery of new evidence which was likely to materially alter the applicant’s tax compliance
status and hear the applicant’s side of the story before taking an action which was contrary to its earlier conduct. By not
affording the applicant an opportunity to explain its position after issuing the tax compliance certificates, it is my view and I so
find that the 1st respondent was guilty of abuse of power.”

49. Similarly, in Republic v Kenya Revenue Authority Ex Parte Cooper K-Brands Limited [2016] eKLR, the Court held that:

“It bears repeating that Tax Compliance Certificates are not a final proof of payment of taxes. However, where there is
evidence that the taxpayer did not actually pay the taxes, the tax authority ought to furnish the taxpayer with the grounds
on the basis of which the tax authority believes that the information giving rise to the Certificate was incorrect before
seeking to recover what in its view is the correct amount of tax due.”

50. The Court in Republic v Kenya Revenue Authority Ex parte Tom Odhiambo Ojienda SC t/a Tom Ojienda & Associates
[2017] eKLR in dealing with a similar issue held that:

“a Tax Compliance Certificate may subject to the due process being followed be withdrawn.”

51. The Respondent contends that they had obtained a lawful order from the lower Court that allowed them to carry out a search and
seizure operation and a preliminary analysis of their recoveries informed their decision, but they have not demonstrated notification
to the Ex Parte Applicants. It is this Court’s finding that prior to the e-mail communication withdrawing the Ex Parte Applicant’s
Tax Compliance Certificates, the Respondent was required by law to issue the Ex Parte Applicants with a demand note and or
notice so as to give the Ex Parte Applicants opportunity to be heard before their Tax Compliance Certificate were withdrawn. That
failure clearly affords the Ex Parte Applicant a hearing before this Court, which alone has the jurisdiction to safeguard the Ex Parte
Applicants’ rights to a fair hearing and right to fair administrative action.

52. The Ex Parte Applicants contended that their legitimate expectations were violated while the Respondent submitted that no
legitimate case can arise against provisions of the law. In National Director of Public Prosecutions v Phillips and Others [2002]
(4) SA 60 (W) para 28, Hehe J, stated:

“The law does not protect every expectation but only those which are 'legitimate'. The requirements for legitimacy of the
expectation, include the following:

(i) The representation underlying the expectation must be 'clear, unambiguous and devoid of relevant qualification';

(ii) The expectation must be reasonable:

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(iii) The representation must have been induced by the decision-maker;

(iv) The representation must be one which it was competent and lawful for the decision-maker to make without which the
reliance cannot be legitimate.”

53. The Ex Parte Applicants herein are tax payers who had applied for Tax Compliance Certificates from the Respondent. The same
Compliance Certificates were issued to them with the expectation that they would enjoy the benefits that come with the said
Certificates. Further, there was an expectation that should the said Tax Compliance Certificates become wanting in any way so as to
affect their continued use or purpose, such resultant status would be notified to the Ex Parte Applicants before any drastic action,
such as withdrawal of the same, would be taken. Since this was not done in the present case, I find that the Respondent violated the
Ex Parte Applicants’ legitimate expectations. This was the position in Keroche Industries Limited v Kenya Revenue Authority
& 5 Others Nairobi HCMA No. 743 of 2006 [2007] KLR 240 where it was held that:

“…….legitimate expectation is based not only on ensuring that legitimate expectations by the parties are not thwarted, but on
a higher public interest beneficial to all including the respondents, which is, the value or the need of holding authorities to
promises and practices they have made and acted on and by so doing upholding responsible public administration. This in
turn enables people affected to plan their lives with a sense of certainty, trust, reasonableness and reasonable expectation.
An abrupt change as was intended in this case, targeted at a particular company or industry is certainly abuse of power.”

54. In my view an administrative action cannot be said to be procedurally fair when a decision is arrived at based only on opinion
formed as a result of the consideration of only one party in a controverted matter involving two parties. Where one’s right or
fundamental freedom is likely to be affected by an administrative action, that person has a right to be given written reason for the
action. See Baker v Canada (Minister of Citizenship & Immigration) 2 S.C.R. 817 6.

55. Article 47 of the Constitution of Kenya 2010 provides as follows:

“Fair administrative action

1. Every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.

2. If a right or fundamental freedom of a person has been or is likely to be adversely affected by administrative action, the
person has the right to be given written reasons for the action.

3. Parliament shall enact legislation to give effect to the rights in clause (1) and that legislation shall—

a. provide for the review of administrative action by a court or, if appropriate, an independent and impartial tribunal; and

b. promote efficient administration.”

56. Parliament enacted the Fair Administrative Actions Act to effect Article 47 of the constitution. The Ex parte Applicant herein is
protected under that Act and under the constitution as stated above.

57. The Ex Parte Applicants are seeking for a judicial review order of certiorari in the motion before this court. The Court of Appeal
held in Kenya National Examinations Council v Republic Ex parte Geoffrey Gathenji Njoroge Civil Appeal No. 266 of 1996
as follows as regards the orders of Judicial Review:

“Prohibition looks to the future so that if a tribunal were to announce in advance that it would consider itself not bound by
the rules of natural justice the High Court would be obliged to prohibit it from acting contrary to the rules of natural justice.
However, where a decision has been made, whether in excess or lack of jurisdiction or whether in violation of the rules of
natural justice, an order of prohibition would not be efficacious against the decision so made. Prohibition cannot quash a
decision which has already been made; it can only prevent the making of a contemplated decision…Prohibition is an order
from the High Court directed to an inferior tribunal or body which forbids that tribunal or body to continue proceedings

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therein in excess of its jurisdiction or in contravention of the laws of the land. It lies, not only for excess of jurisdiction or
absence of it but also for a departure from the rules of natural justice. It does not, however, lie to correct the course, practice
or procedure of an inferior tribunal, or a wrong decision on the merits of the proceedings…. Only an order of certiorari can
quash a decision already made and an order of certiorari will issue if the decision is without jurisdiction or in excess of
jurisdiction, or where the rules of natural justice are not complied with or for such like reasons.”

58. In light of the foregoing, the Ex Parte Applicants are entitled to the orders of certiorari sought to quash the impugned decision
by the Respondent on 27/10/2020.

59. It was averred by Mr. Ngare, learned counsel for the Respondent, and this averment was conceded by Dr. Nyaundi, learned
counsel for the Ex parte Applicants, that during the cause of these proceedings two Applicants viz African Gas and Oil Company
Limited and One Petroleum Limited have since had their Tax Compliance Certificates expire. However, Dr. Nyaundi submitted that
the said expiry of the Tax Compliance Certificates preceded a period of contempt of court order by the Respondent, who had
refused to reinstate the Tax Compliance Certificate pursuant to order of this court issued on 16/12/2020. Further, at the time of
making the order on 16/12/2020, the said Tax Compliance Certificates were active and therefore the action which was taken by the
Respondent was illegal.

60. I am persuaded by the Ex parte Applicants’ submissions that the Respondent acted illegally and unprocedurally and against the
Fair Administrative Actions Act at the time they withdrew the said Tax Compliance Certificates. A public body must at all times
operate with the law. Since the Tax Compliance Certificates have expired, the Ex parte Applicant is at liberty to apply for a fresh
Tax Compliance Certificate.

61. In the upshot I make orders as follows:

i. THAT an order of certiorari do hereby issue to remove into this Court and quash the entire decision of the Commissioner
of Tax communicated to the Ex Parte Applicant vide an email dated 27/10/2020 revoking and withdrawing the Ex Parte
Applicant’s Tax Compliance Certificate in respect of all the Judicial Review Applicants herein.

ii. THAT an order of Mandamus do issue directed to the Commissioner of Tax to reinstate the Ex Parte Applicant’s Tax
Compliance Certificates in relation to One Gas Limited and Grain Bulk Handlers Limited and to deem the aforesaid Tax
Compliance Certificates as valid, legitimate and legal for all purposes as from the date of revocation and/or withdrawal.

iii. THAT an order of Prohibition do issue directed to the Respondent prohibiting the Respondent and its agents from
further withdrawal of Ex Parte Applicant’s Tax Compliance Certificates which are lawful and valid without due process.

iv. It is noted for record that even though the Tax Compliance Certificate for Ex parte Applicants in JR/E009 and JR E012
have expired, the proceedings leading to the grant of ex parte orders on 16/12/2020 started when the said Tax Compliance
Certificates were valid, and therefore the Respondent’s action of withdrawing the same remains illegal, and hence is
quashed in terms of prayer No (i) above.

v. The costs of the application be borne by the Respondent.

It is so ordered.

DATED, SIGNED AND DELIVERED AT MOMBASA THIS 15TH DAY OF APRIL, 2021.

E. K. OGOLA

JUDGE

Ruling delivered via MS Teams in the presence of:

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 One Petroleum Limited & 3 others v Kenya Revenue Authority [2021] eKLR

Mr. Clapton holding brief Dr. Nyaundi for Applicant

Mr. Ngare for Respondent

Ms. Peris Court Assistant

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