1.Upon being granted leave on 17th July 2017 to file their substantive Judicial Review application, the ex-parte applicants (hereinafter, “the applicants”) filed the Notice of Motion dated 19th July 2017 pursuant to Article 47 of the Constitution of Kenya, Section 3(1) of the Fair Administrative Action Act, No. 4 of 2015 and Sections 8, 9, 12 and 28 of the Tax Procedures Act, 2015. They prayed for the following orders:(a)That an order of Prohibition be granted to prohibit the respondent, its employees, servants and or agents, or any other person acting under their authority, from blocking the applicants’ access to their Personal Identification numbers (PIN) online, being No. A003 153 949Z for Hussein Hamid Khamis and No. A001 242 148F for Abubakar Ali Joho, and consequently designating the said identification numbers with the “Status: Stopped” being a decision taken and implemented by the respondent on dates unknown to the applicants in the months of either May or June 2017.(b)That an order of Mandamus be granted, to compel the respondent, its employees, servants and or agents or any other persons acting pursuant to its authority or under any of them, to activate the applicants’ Personal Identification Numbers (PIN) No. A003 153 949Z and No. A001 242 148F for Hussein Hamid Khamis and Abubakar Ali Joho, respectively, and bring the same to “Active Status” so as to enable the applicants to file their annual self-assessment returns for the 2016 year of income.(c)That the costs of the application be provided for.
2.The application was premised on the grounds that, in compliance with Sections 8 and 12 of the Tax Procedures Act, the Commissioner of the Respondent issued the applicants with Personal Identification Numbers (PIN); and that the applicants are therefore allowed by law, and in particular Section 12(2) of the aforesaid Act to use their PINs in connection with and in fulfilling all purposes in relation to the requirements of all tax laws affecting either of them. It was further their contention that they have never notified the respondent that either or any of them intends to be deregistered under any tax law relevant to them under Section 10 of the Act; and no such deregistration has been done by the respondent.
3.The applicants further averred that, contrary to all the provisions of laws relating to tax, the respondent proceeded to block, shut down and top accessibility by the applicants to their respective Personal Identification Numbers in its online accounts and designated them as “Status: Stopped”. They further asserted that the respondent did not notify any of them of the dates or time when it designated the PINS to the “Status: Stopped”; and added that no reason was ever given to them for this highhanded action. They therefore averred that the respondent’s actions are not only unlawful but also ultra vires its lawful mandate.
4.The applicants also pointed out that, by their letters dated 23rd June 2017 to the respondent, they sought to be furnished with reasons for immobilizing their access to their own PINs. They also required the respondent to activate their PINS to “Active Status” and notified the respondent that its conduct was discriminatory; but that the respondent has remained mute and has refused to even acknowledge receipt of the said correspondence. They complained that the respondent’s conduct makes them susceptible to punitive penalties under the applicable tax laws for late filing of returns.
5.The applicants also relied on the Statutory Statement dated 14th July 2017 and the Verifying Affidavit sworn by Hussein Hamid Khamis on 14th July 2017 to which they attached the letter dated 23rd June 2017 by the applicant’s lawyers to the respondent on the de-activation of the applicants’ PINS as well as PIN Checkers for the applicants confirming their “Stopped” status as at Friday 9th June 2017. Thus, the applicants prayed for the judicial review orders of Prohibition and Mandamus.
6.In response to the application, a Replying Affidavit was filed on behalf of the respondent on 21st August 2017, sworn by Justus Kiuvu who described himself as an authorized officer appointed under and in accordance with Section 13 of the Kenya Revenue Authority Act, Chapter 469 of the Laws of Kenya. Mr. Kiuvu conceded that the applicants are registered tax payers under the aforementioned PINs; and that while exercising its mandate, the respondent received information from its Business Intelligence Unit that the applicants were involved in tax evasion schemes. Mr. Kiuvu further deposed that, acting on the intelligence, the respondent requested for bank statements of the applicants for purposes of investigations under Section 59(2) of the Tax Procedures Act which empowers the Commissioner to call for records for purposes of obtaining full information in respect of tax liability of any person or class of persons for the purposes of ascertaining correct declaration of taxes and confirming compliance with the tax laws.
7.At paragraphs 11, 12, 13, 14 and 15 of the Replying Affidavit, Mr. Kiuvu deposed that the investigation revealed that the applicants had filed nil returns yet their bank statements painted a different picture in terms of annual income. Accordingly, the respondent concluded that the applicants were involved in tax evasion schemes and accordingly blocked their PINs as an administrative action to pave way of in-depth investigation without any interference. Thus, Mr. Kiuvu averred that the orders sought, if granted as prayed, will interfere with the ongoing investigations into the tax affairs of the applicants; and that it is therefore only fair and just that the respondent be allowed to undertake its statutory duties unhindered, to safeguard the much needed government revenue and the integrity of its systems.
8.In response to the assertions made in the respondent’s Replying Affidavit, the applicants filed a Further Affidavit, sworn on 1st October 2019 by the 1st applicant. He denied that the respondent has ever requested for any documents from him, and therefore that the bank statements allegedly scrutinized by the respondent were not supplied by him. The 1st applicant reiterated that his complaint is about their PINs being blocked; and pointed out that, two years down the line, the respondent had not reversed the impugned action. Thus, the 1st applicant reiterated their prayer that the respondent be ordered to respect the law.
9.The application was urged by way of written submissions which were highlighted on 31st May 2023. In his written submissions filed on 21st July 2020, Mr. Buti reiterated the factual basis of the application; and in support of the application he relied on various provisions of the Tax Procedures Act and pointed out that, in obedience to the provisions of Sections 8 and 11 of the Act, the applicants applied for and were issued with PINs as follows:(a)Hussein Hamid Khamis, the 1st applicant – No. A003153949Z(b)Abubakar Ali Joho, the 2nd applicant – No. A001242148F
10.He further submitted that, after the two applicants were blocked from making their returns, they wrote to the respondent, seeking to know why that action had been taken and asking that they be given access to the respondent’s system to enable them submit their returns but their letter remained unanswered up to the time of filing this suit. Counsel submitted that the respondent has no power to either deactivate or stop any person’s PIN; and that the only time a PIN can be stopped is if the individual PIN holder applies to the Commissioner for deregistration under Section 10 of the Act. Accordingly, Mr. Buti submitted that the respondent’s action is ultra vires, having been done without jurisdiction; and is therefore null and void ab initio.
11.The second limb of Mr. Buti’s submissions was that, in taking the impugned action, the respondent violated the provisions of Article 47 of the Constitution and Section 4 of the Fair Administrative Action Act, in that no written reasons were given to the applicants for the action. In addition, counsel pointed out that the respondent relied on documents that were never obtained from the applicants. He accordingly urged the Court to find that the respondent deviated from the correct decision making process in arriving at the impugned decision. Reliance was placed by counsel in this regard on Mombasa Municipal Council v Umoja Consultants  eKLR to buttress his arguments. He consequently urged that the application be allowed.
12.On behalf of the respondent, written submissions were filed herein by Ms. Chelang’at on 31st March 2023. She similarly reiterated the factual basis of the respondent’s case as set out in the Replying Affidavit sworn by Mr. Kiuvu and pointed out that the preliminary investigations carried out by the respondent revealed discrepancies indicative of tax evasion. She further asserted that the respondent resorted to blocking the applicants’ PINs to protect the integrity of its system from further abuse and to enable it conduct further investigation without any interference from the applicants. Thus, counsel proposed one issue for determination, namely, whether the respondent acted within its statutory mandate in blocking the applicants’ PINs.
13.Ms. Chelang’at submitted that it is the statutory mandate of the respondent, under Sections 5(1) and (2) of the Kenya Revenue Authority Act, to enforce collection of revenue and ensure compliance with the revenue laws. She further submitted that, pursuant to that mandate, the respondent initiated investigations into the tax affairs of the applicants; which investigations included a consideration of the self-assessment tax returns submitted by them as well as bank statements obtained from the two applicants pursuant to Section 24(2), 58 and 59(1)(a) of the Tax Procedures Act.
14.Counsel referred the Court to the South African case of Metcash Trading Limited v Commissioner for the South African Revenue Service & Another  ZACC 21 as to the powers of a tax authority such as the respondent, to request for the production of records and additional information. She also relied on Tumaini Distributors Company (K) Limited v Commissioner of Domestic Taxes  eKLR to underscore her submission that it was the duty of the applicants to provide all the documents needed by the Commissioner for purposes of the investigations.
15.Thus, Ms. Chelang’at submitted that the applicants are not entitled to the orders sought granted that tax evasion is a criminal offence under Section 97(a) as read with Section 104(3) of the Tax Procedures Act. She urged the Court to find that the respondent acted within its mandate in blocking the applicants’ PINs and to dismiss the applicants’ Notice of Motion dated 19th July 2019 with costs to the respondent.
16.In the light of the foregoing summary of the averments and submissions made herein by the parties, there is no dispute as to the mandate of the respondent. Indeed, that mandate is explicitly set out in Section 5 of the Kenya Revenue Authority Act; and it includes collection and receipt of all revenue on behalf of the Government. In the discharge of its mandate, the respondent has the powers to administer and enforce all provisions of the written laws set out in Part I and Part II of the First Schedule and for that purpose, to assess, collect and account for all revenues in accordance with those laws.
17.Section 8 of the Tax Procedures Act, mandates the respondent, through its Commissioner, to register all persons who are eligible to pay income tax for purposes of the Income Tax Act as soon as such liability accrues. Hence, Section 11 of the Act stipulates that:
18.Thus, the parties are in agreement that the two applicants duly applied to the respondent’s Commissioner for registration and had been issued with their respective PINs, being No. A003153949Z for Hussein Hamid Khamis and No. A001242148F for Abubakar Ali Joho. It is also common ground that the applicants’ respective PINs were deactivated by the respondent and that they were consequently unable to make returns for the year ending December 2016. The applicants exhibited screenshots of the respondent’s Pin Checker for Friday 9th June 2017 to confirm that the status of the PINs in the respondent’s system as “Stopped”.
19.The applicants availed credible proof that, on the 23rd June 2017, they wrote to the respondent’s Commissioner, Domestic Taxes Department, complaining about the deactivation of their PINs; and indicated that they were unable to access their KRA online accounts and file 2016 tax returns in spite of several complaints to the respondent’s Commissioner.
20.Needless to say that judicial review is concerned, not with the merit of an impugned decision, but the process leading up to the decision. Thus, in Municipal Council of Mombasa v Republic & Umoja Consultants Limited  eKLR the Court of Appeal held that:
21.Accordingly, the two issues emerging for determination in this suit are:(a)whether the decision to deactivate the applicants’ PINs is ultra vires; in other words, whether the respondent acted within its statutory mandate in making the impugned decision; and,(b)Whether the impugned action is an infringement of Article 47 of the Constitution and Section 4 of the Fair Administrative Action Act.
A. On Ultra Vires:
22.In Okiya Omtatah Okoiti & 3 Others v Anne Waiguru, the Cabinet Secretary, Devolution and Planning & 6 others  eKLR it was held:
23.Moreover, the decision of Lord Diplock in Council of Civil Service Unions versus Minister for the Civil Service  AC 374,410, which has been quoted with approval in numerous cases locally, was that:
24.Hence, the applicants took the posturing that there are no powers of any description donated to the respondent to either deactivate or stop any person’s PIN once such PIN has been issued by the respondent’s Commissioner. Indeed, a perusal of the Tax Procedures Act makes no provision for stoppage or deactivation of a PIN once issued. What it provides for, in Section 10 of the Tax Procedures Act, is deregistration at the instance of the PIN holder. The provision reads:
25.The contention of the applicants was that at no time did they apply for deregistration of their PIN; and counsel for the respondent did not point to any specific provision of the Tax Procedures Act, or any other statute or regulation that authorizes the deactivation of a PIN at the instance of the respondent. In the circumstances, I am satisfied that, in so far as the stoppage of the applicants’ PINs was not backed by any provision of the law, it was ultra vires of the respondent’s mandate.
B. On whether the respondent infringed Article 47 of the Constitution:
26.Articles 47 of the Constitution provides that:(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.”
27.The above provision is reiterated in Section 4 of the Fair Administrative Action Act thus:(1)Every person has the right to administrative action which is expeditious, efficient, lawful, reasonable and procedurally fair.(2)Every person has the right to be given written reasons for any administrative action that is taken against them.
28.I note that the respondent explained at length why it deactivated the applicants’ PINs and added that it has the exclusive mandate to enforce the provisions of the tax laws. The explanation is to be found at paragraphs 8 to 17 of the Replying Affidavit; and while I have no quarrel about the reason for the deactivate, it is plain that those averments are averments touching on the merits of the decision and not the process leading to or following the decision. The applicants’ complaint was that, at no time did the respondent notify them of the intention to deactivate their PINs. In particular, they averred, at paragraph 12 of the Supporting Affidavit, that in spite of their letter to the respondent dated 23rd June 2017, no response or communication of any kind was made by the respondent as to why or when the PINs had been deactivated. There is nothing in the Replying Affidavit to show that the applicants’ letter dated 23rd June 2017 was ever responded to or to show that the justification given in the Replying Affidavit was ever communicated to the applicants. It is plain therefore that, in that regard, the respondent acted not only in breach of Article 47(2) of the Constitution but also flouted the provisions of Section 4 of the Fair Administrative Action Act.
29.As for the applicants’ complaint that the respondent relied on documents, and in particular, bank statements that were never supplied by them, I am satisfied that Sections 58 and 59 of the Tax Procedures Act are wide enough to cover the recovery of bank statements from financial institutions; and therefore that the bank statements in question were properly obtained. Indeed, Section 59(2) of the Act is specific that:
30.Thus, while I find no merit in the applicants’ contention that the bank statements were irregularly obtained, it is my finding that the applicant has proved that the impugned decision was made without jurisdiction and is therefore an illegal decision; and that the same was made in contravention of the provisions of Article 47(2) of the Constitution and Section 4 of the Fair Administrative Action Act. Indeed, in Republic v Kombo & 3 Others, Ex parte Waweru  3 KLR (EP) 478 it was held that:
31.And where an infringement of the right is proved, Article 23 is explicit that the High Court may then grant appropriate relief including an order of judicial review. In Kenya National Examinations Council v Republic, Ex-Parte Geoffrey Gathenji Njoroge & Others  eKLR the Court of Appeal held that:
32.The Court then proceeded to state thus:
33.As for the order of Mandamus, the Court of Appeal had the following to say:
34.In the light of my findings herein above, I am satisfied that the ex-parte applicants’ application dated 19th July 2017 is meritorious. The same is hereby allowed and orders granted as hereunder:(a)That an order of Prohibition be and is hereby granted to prohibit the respondent, its employees, servants and or agents, or any other person acting under their authority, from blocking the applicants’ access to their Personal Identification numbers (PIN) online, being No. A003153949Z for Hussein Hamid Khamis and No. A001 242 148F for Abubakar Ali Joho, and consequently designating the said identification numbers with the “Status: Stopped”.(b)That an order of Mandamus be and is hereby granted, to compel the respondents, its employees, servants and or agents or any other persons acting pursuant to its authority or under any of them, to activate the applicants’ Personal Identification Numbers (PIN) No. A003153949Z and No. A001242148F for Hussein Hamid Khamis and Abubakar Ali Joho, respectively, and bring the same to “Active Status” so as to enable the applicants file their annual self-assessment returns as by law required.(c)That each party shall bear own costs of the application.
It is so ordered.