1. I have considered the Notice of Motion Application dated 20 September 2024 seeking a stay of execution together with the affidavit filed in support, the further affidavit sworn by the applicant, and the reply sworn on 12 October, 2024 together with the submissions of the parties and the applicable law.
2. Having considered the same, it is evident to me that the appellant has failed to comply with the ruling of the Tax Appeal Tribunal dated 1st August, 2024 and in particular, has declined to issue the respondent with the relevant exemption certificate within the period of 60 days as directed by the Tribunal.
3. Instead, the appellant continues to collect taxes, at source, and in breach of the said orders to the detriment of the Respondent.
4. The starting point in relation Order 42, Rule 6, is that the applicant must show substantial loss will be incurred. This is the cornerstone for a grant of stay pursuant to the court of appeal decision in Kenya Shell Limited v Benjamin Karuga Kiburu & Others (1982-88) I KAR 1018.
5. Further, based on the decision in Lalji Bhimji Sanghani Builders & Contractors Ltd vs Nairobi Golf Hotels (K) Ltd. H.C.C.C.C 1900/1995 (Nairobi) substantial loss must be proved by way of evidence, and not, to use the words of Ringera, J. by way of “bold statements from the bar”.
6. Finally, where stay is sought in non-monetary circumstances, the court is called upon to take into account the conflicting interests of the parties, and consider the balance of convenience.
7. Guided by the above, I am of the view that the balance of convenience falls in favour of the Respondent. I say so because I do not think that the applicant may benefit from its deliberate disobedience of the orders of the tribunal, and at the same time, seek refuge from the court. The applicant ought to have complied with the orders of the Tribunal while the application for stay was pending before this court. It has not done so.
8. Moreover, the applicant has failed to meet the criteria pursuant to which a stay ought to be granted under Order 42 rule 6. In particular, no security has been furnished by the applicant. The applicant submitted that the respondent is at liberty to apply for refund under Section 47 of the Tax Procedures Act in the event the taxes are not due. I do not think this is the correct interpretation of Order 42, Rule 6.
9. Finally, and in any event, the applicant has not shown that it will suffer substantial loss in the event the orders are not granted.
10. Based on the reasons set out above I find that the Application is without merit. The same is dismissed with costs.