Access to justice
Access to justice: Why amendment to Section 32 of the Tax Appeals Tribunal Act, No 40 of 2013 will be an infringement of Article 48 of the Constitution of Kenya.
The Finance Bill 2023 (the Bill) is perhaps one of the most debated and analysed proposed legislation. It has invited the interests of citizens from all walks of life. While the Bill contains a raft of amendments to a number of existing statutes, discussions on the same have seemingly been focused on the proposed housing levy through amending the Employment Act vide Clause 76 of the Bill.
Lost in the discussions around the Bill is the proposed amendment of Section 32 of the Tax Appeals Tribunal Act, No 40 of 2013 (the Act). Clause 36 of the Bill provides that Section 32 of the Act is amended by obligating a party wishing to appeal the decision of the Tax Appeals Tribunal to the High Court to deposit an amount equivalent to 20% of the disputed tax amount with the Commissioner before filing the appeal. In the alternative, the party shall be required by law to provide security equivalent to 20% of the disputed tax before filing the appeal if the amendment is allowed.
The amendment threatens the enjoyment of the right of access to justice enshrined in Article 48 of the Constitution and the right to fair hearing provided for in Article 50. Also, at risk is the well-established principle of equality before the law. The Constitution mandates the state to ensure access to justice for all persons to the extent that if any fees are required, the same is supposed to be reasonable and not impede access to justice.
Majanja, J, expounded on the right of access to justice in the case of Dry Associates Limited V Capital Markets Authority & Another Interested Party Crown Berger (K) Ltd [2012] Eklr wherein the Honourable judge opined that “ Access to justice is a broad concept that defies easy definition. It includes the enshrinement of rights in the law; awareness of and understanding of the law; easy availability of information pertinent to one’s rights; equal right to the protection of those rights by the law enforcement agencies; easy access to the justice system, particularly the formal adjudicatory processes; availability of physical, legal infrastructure; affordability of legal services; provision of a conducive environment within the judicial system; expeditious disposal of cases and enforcement of judicial decisions without delay.”
By making it a requirement for one to deposit 20% of the tax amount in dispute or provide security of equivalent value, Clause 36 of the Bill, if passed as it is, will make it difficult for a party dissatisfied with the decision of the Tax Appeals Tribunal to explore to exhaustion the options available through the judicial system for a just determination of the dispute at hand. One must be alive to the fact that tax disputes that find themselves before the Tax Appeals Tribunal ordinarily involve a substantial amount of money, making raising 20% of the amount in dispute a daunting task.
Under Section 53 of the Tax Procedures Act, No 29 of 2015 as well as Section 32(1) of the Tax Appeals Tribunal, Act No. 40 of 2013, a party wishing to file an appeal from the decision of the Tribunal to the High Court is required to do so within 30 days of being notified of the decision or within such further period as the High Court might allow. Per the proposed amendment to Section 32 of the Act, aggrieved parties must raise the equivalent of 20% of the tax amount in dispute or equivalent security before the lapse of 30 days for their appeal to be properly on record.
A party that fails to raise the 20% deposit of the disputed tax amount within the prescribed 30 days risk having their right of appeal extinguished, notwithstanding their dissatisfaction with the Tribunal’s findings. Consequently, the decision will remain enforceable for lack of an order staying, varying, or setting it aside. Hence the requirement to deposit part of the disputed tax amount impedes the right of access to justice.
Article 50 of the Constitution guarantees that every person will be heard fairly through the judicial system. This means every person shall have their dispute get a fair and just determination. Both the Tax Procedures Act and the Tax Appeals Tribunal Act recognize a party’s inherent right of appeal to the High Court, which is meant to ensure a fair determination of tax disputes.
The amendment to Section 32 of the Tax Appeals Tribunal Act makes the right to a fair hearing a “qualified right” within the context of tax disputes. The net effect is that parties that fail to deposit the required 20% or provide equivalent security will be locked from exercising their right to a fair hearing through appeals.
Within the ambits of the rule of law is the principle that everyone is equal before the law. This principle presupposes equal treatment for all by and before the law. Clause 36 of the Finance Bill 2023 introduces an asymmetrical obligation on the parties before the tribunal.
The requirement to deposit 20% of the tax amount in dispute is only required of a party other than the Commissioner. In other words, the Commissioner has a free pass to appeal to the High Court, while the ordinary citizens have to meet a rather punitive requirement set by the law.
The rule of law postulates that everyone is equal before the law. Therefore, no statute or law should contain within its provisions sections that shield one party from its provisions while applying to one party; to do so will be equivalent to a breach of Article 27 of the Constitution, which protects against all forms of discrimination while guaranteeing that everyone is equal before the law worthy of equal protection and benefit of the law.
As observed by Majanja, J, in Kenya Bus Service Ltd & Another V Minister For Transport & 2 Others [2012] eKLR, “where the state is at the front, left and centre of the citizen’s life, the law should not impose hurdles on accountability of the Government through the courts.”
Thus the right of access to justice enshrined in Article 48 of the Constitution involves the right of ordinary citizens to access remedies and relief from the court. Hence such conditions that fetter the right of persons to seek the assistance of the court of law should not find a place within statutes.
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