George M. Ndirangu vs Kenya Revenue Authority & The Director of Pensions (2016)

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Facts Of The Case

The Applicant, George M. Ndirangu was a disabled person, certified by the National Council for Persons with Disabilities.

He was an employee of the Housing Finance Company Limited up until May 2007. His terminal dues and pension were to be subjected to the Income Tax deductions

His former employer deducted a sum of Kshs.1,161,902/50 and forwarded it to Kenya Revenue Authority despite his protests that he was exempted from tax in view of the provisions of the Persons with Disabilities Act 2003.

Before his dues were paid, the applicant had sought exemption from the Ministry of Finance who informed him that the modalities for operationalizing the provisions of the Persons with Disability Act on Tax exemption on employment income had not yet been finalized.

His employer, Housing Finance, therefore computed the terminal dues and pension taking into account the tax element.

Issues For Determination

1.Whether the applicant had a cause of action against the intended defendants.

2.Whether the applicant was a pauper.

3.Whether the correct procedure had been followed in bringing the application before the court.

Court Determination

The judge stated that the preamble to the Persons with Disabilities Act states that the Act shall come into operation on such dates as the minister may by Notice in the Gazette appoint and different dates may be appointed for different provisions.

Legal Notice No. 64 – No 14 of 2003 bought into force the Persons with Disabilities Act other than Sections 22, 23, 24, 35,(1) 35,(2) 39 and 40. Therefore, all the provisions of the Persons with Disabilities Act, 2003, came into force on 16th June 2004 except provisions under Sections 22, 23, 24, 35(1),35(2), 39 and 40.

Section 35(1) states:

“All persons with disabilities who are in receipt of an income may apply to the Minister responsible for Finance for exemption from income tax and any other  levies on such income.”

The application was in respect of Sections 35(1) and 35(2) of the said Act which came into force vide Legal Notice No. 182 of 2009 on the 1st January 2010.

Also, Legal Notice No 36 of 2010 (Income Tax Deductions and Exemptions) Order 2010 rules prescribed the procedure to be followed in an application for exemption. This procedure was not in force as at the time the applicants dues were deducted and when he sought exemption from income tax from his employment dues.

The court found that the provisions of Section 35(1) of the Act under consideration cannot be applied retrospectively, meaning, the applicant’s cause of action against the defendants having taken place before coming into force of the said section.

As to whether the applicant was a pauper to take advantage of the provisions of Order 33 of Civil Procedure Rules, no material was placed before the court to show that the applicant lacked sufficient means to pay court fees despite the disability.

On the third issue, whether the correct procedure was followed in bringing the application to court.  Section 35(5) (a) the court shall reject an application for permission to sue as a pauper if it not framed and presented.

The application ought to be presented in person unless  the applicant is exempted from appearance in court by Section 82 of the Act. It also ought to be signed by the applicant and he had not shown the court that he is unable to sign the application personally or to appear in person to qualify to be represented by an agent.

The applicant’s advocate Mr. Kimatta urged the court to allow the application by virtue of Article 159 of the Constitution that justice is to be administered without undue regard to procedural technicalities.

However,  Section 33 (2) and (3) is coached in mandatory terms, that if the prescribed procedure is not followed it ought not be allowed, The judge stated that  Article 159 of the Constitution was not made to rubbish all other statutory procedural requirements, but can only come to aid when it is clear that the procedural technicality it seeks to cure would be for the wider interest of justice.

In totality, the court found that the application lacked merit and was therefore dismissed with no orders as to costs.