https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/298

REPUBLIC OF KENYA IN THE TAX APPEALS TRIBUNAL AT NAIROBI TAX APPEAL NUMBER E167 OF 2026 ABSON MOTORS LIMITED……………….……………..……….………...…... APPELLANT -VERSUS- COMMISSIONER OF CUSTOMS AND BORDER CONTROL......................RESPONDENT BACKGROUND JUDGMENT 1. The Appellant is a limited liability company duly incorporated in Kenya and its principal business includes the assembly and sale of motor cycles, as well as three-wheeled motor vehicles and the sale of their spare parts. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws. Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 1 of 20 assessing, collecting and accounting for all revenues in accordance with those laws. 3. On 13th March 2023 and 26th January 2024, the National Treasury and Economic Planning issued letters expressly undertaking and promising to pay applicable customs duties and taxes on behalf of the Appellant in respect of the importation of dates intended for consumption during the month of Ramadhan. The said letters were duly addressed and communicated to the Respondent. 4. Pursuant to the said undertaking, the Respondent communicated the position to officers within Customs and Border Control, whereupon the Appellant was allowed clearance of the goods without immediate payment of the applicable duties and taxes, strictly on the strength of the Government's undertaking to settle the same on the Appellant's behalf. The Respondent maintained that it did not grant any statutory exemption under the law but merely conveyed and relied upon the undertaking issued by the National Treasury. Notwithstanding the foregoing, the said undertaking was never honoured by the National Treasury. 5. Subsequently, the Respondent conducted a Post Clearance Audit of the Appellant's import declarations relating to the said consignments. The audit revealed that customs duties amounting to Kshs 872,680.00 had not been paid in respect of the said importations. 6. Consequently, and in exercise of its mandate, the Respondent issued a demand notice dated 8th December 2025 to the Appellant for the recovery of the short-levied duties. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 2 of 20 7. Dissatisfied by the said demand, the Appellant lodged an Application for Review dated 16th December 2025, contesting the assessment. 8. Upon due consideration of the Application for Review and the material placed before it, the Respondent issued a Review Decision dated 13 th January 2026, thereby confirming the assessment and upholding the demand in its entirety. 9. Aggrieved by the decision, the Appellant filed this appeal vide notice of appeal dated 12th February 2026 and filed on 13th February 2026. THE APPEAL 10. The Appellant filed memorandum of appeal dated 13th February 2026 raising the following grounds of appeal: i. That the Respondent erred in law and in fact by demanding taxes contrary to the National Treasury Undertaking applicable to the importation of dates during Ramadhan. ii. That the Respondent unlawfully disregarded and/or failed to give effect to the National Treasury Undertaking, which had the force of a policy directive applicable to the subject imports. iii. That the Respondent's decision violated the doctrine of legitimate expectation, as the Appellant reasonably relied on the National Treasury Undertaking in clearing the consignments. iv. That the Respondent failed to consider relevant factors, including the existence of the National Treasury Undertaking and the circumstances under which the imports were made. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 3 of 20 v. That the Respondent took into account irrelevant considerations in arriving at its decision to demand taxes. vi. That the impugned decision is unreasonable, unfair, and contrary to the principles of good customs administration under EACCMA. vii. That the demand for taxes is without legal basis, ultra vires, and therefore null and void. viii. That the Respondent's decision is contrary to the spirit and letter of the East African Community Customs Management Act, 2004 (EACCMA). Appellant’s Case 11. The Appellant filed statement of facts dated 13th February 2026, written submissions dated 27th April 2026 and filed on 5th May 2026 and documents attached thereon. 12. The Appellant stated that on 13th March 2023 and 26th January 2024, the National Treasury, vide letters Ref: ZZ/40/06/E and DFN 415/4| L/0011 VOL X (65), communicated that in order to support the Muslim community during the holy month of Ramadhan, the Government had authorized the importation of dates without the payment of taxes, Import Declaration Fee (IDF), and Railway Development Levy (RDL). 13. It stated that the exemption specifically applied to dates imported and cleared during the following periods: 13th March to 30th Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 4 of 20 April 2023; 1st March to 20th April 2024; and the corresponding Ramadhan period in 2025. The Appellant asserted that the imported dates were distributed freely during the month of Ramadhan to members of the public, including non-Muslims, and were not sold or used for any commercial gain. 14. According to the Appellant, the Respondent's actions in seeking to impose taxes in these circumstances undermine and frustrate the Government's stated objective of supporting this noble philanthropic initiative. 15. It stated that the Cabinet Secretary further clarified that any taxes due on dates imported within these specified periods would be borne by the Government. The Appellant contended that pursuant to the exemption, the Appellant imported dates during the Ramadhan periods in 2023, 2024, and 2025. It stated that these imports were undertaken strictly for philanthropic purposes, in line with the spirit and intent of the Government's directive to support the Muslim community during this period. 16. On 8th December 2025, the Respondent issued a Notice of Demand Reference KRA/CBCPCA/832/2025 (NOD) amounting to Kshs.872,680 alleging that taxes were payable in respect of the dates imported during the Ramadan period. The Appellant responded to the Notice of Demand, explaining that the consignments were covered by the National Treasury Undertaking and therefore not subject to the taxes demanded. 17. Notwithstanding the Appellant's representations, the Respondent issued a decision on 13th January 2026, confirming the demand for Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 5 of 20 taxes and maintaining its position that the taxes should be paid by the taxpayer. 18. The Appellant contended that the Commissioner erred in attributing the liability to it and that it had no expectation or reason to believe that the tax burden for the imported dates would fall on it, given the express commitment by the National Treasury. The Appellant believed that once the Government undertake to pay the taxes, the Appellant's obligation was extinguished. It stated that at the very least, the Appellant expected that in the event of non-payment by the Treasury, the Respondent, as a fellow government agency, would resolve the matter internally rather that shifting the burden onto the Appellant. 19. The Appellant was aggrieved by the said decision on the grounds that it disregards the National Treasury's express undertaking and undermines the intended public benefit, thereby frustrating lawful philanthropic initiatives undertaken in Kenya. 20. According to the Appellant, the Respondent's reliance on Cale Infrastructure Lid v Commissioner of Customs & Border Control (Tax Appeal No. E234 of 2024) is misguided and misconceived. The Appellant averred that the facts in that case are materially distinguishable in that the cited case concerned tax on materials consumed in a project where the Government's undertaking was neither specific nor absolute. In the present case, the Appellant argued, the Government granted a specific exemption to support the Muslim community during Ramadhan, expressly covering the importation of dates. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 6 of 20 21. On 20th February 2026, the Appellant applied for Alternative Dispute Resolution (ADR). The parties engaged in negotiations; however, on 23rd February 2026, the Appellant received communication that the matter raised issues of legal interpretation and was therefore referred back to the Tribunal. 22. The Appellant asserted that the Respondent erred in law by misapplying the provisions of the EACCMA. It noted that the National Treasury expressly stated that the taxes will be the responsibility of the Government, thereby assuming liability. According to the Appellant, any such liability, if at all, lies with the Government and not the Appellant. 23. The Appellant averred that if there was any risk of default by the National Treasury, the Appellant and other importers of dates ought to have been duly notified, including through the relevant coordinating body such as SUPKEM. The Appellant averred that no such communication was ever made. 24. The Appellant pointed out that under Sections 75 and 78 of the Public Finance Management Act, the Kenya revenue Authority is mandated to collect revenue, while the National Treasury is responsible for the management and allocation of public finances. It was of the view that any failure by the National Treasury to settle its obligations pursuant to its undertaking constitutes an inter- governmental matter and cannot lawfully be transferred to the Appellant. 25. It maintained that the purpose of the exemption was to support the Muslim community during Ramadhan and must be given effect. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 7 of 20 The Appellant maintained that it acted in good faith to advance public interest objective and that public authorities must be held accountable for their representations. The Appellant’s written submissions 26. The Appellant filed written submissions dated 27th April 2026 on 5th May 2026. The Tribunal notes that the submissions are similar to its statement of facts. 27. Nevertheless, the Appellant submitted that the notice of appeal was filed within time on the basis that the decision subject to appeal was communicated upon the Appellant on 13th January 2026 and that the timelines for filing a notice of appeal within the 30-dayperiod lapsed on 12th February 2026. 28. The Appellant also submitted that the Respondent erred in issuing and confirming a notice of demand; therefore, the same should be vacated. Appellant’s prayers: 29. The Appellant prayed for the following reliefs: i. This Honourable Tribunal be pleased to allow the Appeal and set aside the Notice of Demand dated 8th December 2025; ii. The Tribunal be pleased to find and hold that no tax liability is payable by the Appellant in respect of the subject imports. iii. The Respondent be directed to pursue recovery of the alleged unpaid taxes from the National Treasury in accordance with its undertaking, rather than from the Appellant. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 8 of 20 iv. The costs of this Appeal be awarded to the Appellant. THE RESPONDENT’S CASE 30. The Respondent’s case is premised on its Statement of Facts dated and filed on 9th March 2026 and written submissions dated and filed on 28th April 2026 31. The Respondent stated that the assessment is firmly anchored on Sections 130 and 133 of the EACCMA which unequivocally impose the primary obligation on the owner of goods to pay customs duty upon importation of goods and expressly empower the Commissioner to demand and recover any duty that has been short levied, not levied, or not collected. 32. It stated that the issues raised are neither novel nor unsettled. It stated that they have been conclusively determined by this Honourable Tribunal and, more authoritatively, by the High Court of Kenya in High Court Civil Appeal No. E234 of 2024, Cale Infrastructure Construction Co. Limited v Commissioner of Customs & Border Control. 33. The Respondent argued that the present appeal merely regurgitates arguments that have already been pronounced upon by both this Tribunal and a superior court, in blatant disregard of the principles of legal certainty, finality, and judicial consistency. 34. The Respondent averred that it is not in dispute that the importation of dates does not fall within the exemptions provided under the Fifth Schedule to the EACCMA and is therefore, by operation of law, subject to customs duty. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 9 of 20 35. It averred that the letters issued by the National Treasury constituted nothing more than a promissory undertaking to settle the taxes due on behalf of the Appellant after the importation of the dates. It stated that the failure by the National Treasury to honour that undertaking does not, in law, transfer, extinguish, or nullify the Appellant's primary statutory liability as the importer. Accordingly, it maintained that the issues raised in this appeal fall squarely within, and are fully governed by, Construction Co. Limited v Commissioner of Customs & Border Control. 36. The Respondent asserted that it is immaterial that the undertaking was issued during the Ramadhan period and that this in itself does not distinguish this case from Cale Infrastructure decision in any manner in what the Appellant describes as formal, nationwide fiscal directive. According to the Respondent, that alone does [not] amount to a legally operative exemption capable of extinguishing the Appellant's statutory duty obligation. 37. The Respondent argued that what is material is that the taxes in question were not exempted by law, and that the National Treasury merely issued a promissory note to settle the same on the Appellant's behalf, an undertaking which was never honoured. 38. Further, it argued that the Appellant had adduced no evidence to demonstrate any follow-up or enforcement of the said undertaking against the National Treasury. 39. According to the Respondent, the Appellant's remedy, if any, lies in pursuing a separate cause of action against the National Treasury. In Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 10 of 20 the absence of such action, and pursuant to its statutory mandate, the Respondent is fully entitled and empowered to demand and recover the outstanding customs duties from the Appellant. Respondent’s written submissions 40. The Respondent filed written submissions dated 20th April 2026 wherein it submitted that the notice of appeal was not filed within time on the basis that the decision subject to appeal was communicated to the Appellant on 13th January 2026 and that the timelines for filing a notice of appeal within the 30-dayperiod lapsed on 12th February 2026. It submitted that the notice of appeal, which was filed and communicated on 13th February 2026 was one day late. 41. The Respondent relied on the case of Nicholas Kiptoo Arap Korir Salat v IEBC & 6 others [2013] eKLR to argue that the leave must be obtained to file appeal out of time. 42. The Respondent also submitted that it was justified in issuing and confirming demand issued to the appellant. It relied on the case of Cale Infrastructure Construction Co. Limited v Commissioner of Customs & Border Control Tax Appeal No. E234 of 2024, in which the High Court affirmed the decision of the Tribunal on the same issue. Respondent’s Prayers 43. The Respondent prayed that the Appeal be dismissed with costs to the Respondent and that the review decision and the taxes demanded therein be upheld. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 11 of 20 ISSUES FOR DETERMINATION 44. The Tribunal, having considered the pleadings, puts forth has the determined that the following issues fall for its determination: a) Whether the Appellant’s Appeal is valid? And b) Whether the Respondent was justified in assessing and confirming the import duty; import declaration fee, and Railway Development Levy. ANALYSIS AND FINDINGS A. Whether the Appellant’s appeal is valid? 45. The Respondent averred that the instant Appeal is incompetent on the basis that the Appellant appealed out of time without leave. 46. The Tribunal notes that the review decision is dated 13th January 2026. The Appellant filed the notice of appeal on 13th February 2026. 48. The Tribunal notes that review decisions and appeals therefrom are governed by Section 230 (1) and (2) of the EACCMA, which provide as follows: “230. (1) A person dissatisfied with the decision of the commissioner Under section 229 may appeal to a tax appeals tribunal established in accordance with section 231. (2) A person intending to lodge an appeal under this section shall Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 12 of 20 Lodge the appeal within forty-five days after being served with the decision, and shall serve a copy of the appeal on the Commissioner.” (Emphasis added) 49. It is thus clear that an appeal against a review decision should be filed within 45 days of the issuance of the said decision. This position was supported in TAT Judgment E-0417 of 2023, Unicorn Pump Services & Automation Limited Vs Commissioner of Customs & Border Control whence the Tribunal stated that: “The Appellant was required to file its Notice of Appeal within 45 days.” 50. The appeal in this case was filed within the 45-day period and therefore valid. The Respondent’s preliminary objection is accordingly dismissed. B. Whether the Respondent was justified in assessing and confirming the import duty; import declaration fee, and Railway Development Levy 47. The Appellant adduced three letters from the Cabinet Secretary responsible for matters finance dated 13th March 2023, 26th January 2024; 15th February 2025 and wherein the Cabinet Secretary wrote to the Respondent to allow duty free importation of dates for the purposes of celebration of Ramadan. The Appellant also relied on the doctrine of legitimate expectation to support its appeal on the basis that the National Treasury created legitimate expectation that the consignments were covered by the government directive and would not attract additional or retrospective taxes. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 13 of 20 48. On the other hand, the Respondent argued that the letters issued by the National Treasury constituted nothing more than a promissory undertaking to settle the taxes due on behalf of the Appellant after the importation of the dates. The Respondent contended that failure by the National Treasury to honour the undertaking does not, in law, transfer, extinguish, or nullify the Appellant's primary statutory liability as the importer. 49. The Tribunal examined the letter dated 13th March 2023 and noted that indeed the Cabinet Secretary in charge of National Treasury issued a letter to the Respondent notifying it that the government had allowed duty-free importation of dates for use by Muslim faithful or pay the relevant duties in the absence of legal provisions for waivers. In the said letter, the Cabinet Secretary noted that dates imported between 13th March to 30th April 2023 be done without payment of taxes, import declaration fee, and Railway Development Levy. The letter stated that, ‘‘the taxes due on the dates imported and cleared during that period will be the responsibility of the Government." 50. The Cabinet Secretary issued another letter dated 26th January 2024 whose content was similar to that of the letter dated 13th March 2023. However, the period for the letter dated 26th January 2024 was 1st March 2024 to 20th April 2024. 51. In the letter dated 11th February 2025, the Cabinet Secretary stated that import duty would be paid by the Government, while it granted exemptions from IDF and RDL for the dates imported under that period. Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 14 of 20 52. The Tribunal notes that nothing under the EACCMA grants the Cabinet Secretary powers to exempt anyone from paying import duty. That is why the Cabinet Secretary in the letters stated that where an exemption is not provided, the Government undertook to pay for the imports on the dates imported within the prescribed period. 53. Section 120 (1) and (3) of the EACCMA provides that the time of entry determines the rate of duty and when duty should be paid as follows: 120. (1) Subject to subsection (3) and section 94, import duty shall be paid at the rate in force at the time when the goods liable to such duty are entered for home consumption: Provided that in the case of goods imported overland, the time of entry of such goods for home consumption shall be deemed to be the time when the import duty on the goods is paid. (3) Where goods are entered in accordance with section 34 before the arrival at the port of discharge of the aircraft or vessel in which such goods are imported, the import duty upon the goods shall be paid at the rate in force at the time of arrival of such aircraft or vessel at such port of discharge. 54. Pursuant to the foregoing, the Appellant could not be pursued by the Respondent if the National Treasury had paid for the import duties on the imports at the time when the dates were entered for home Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 15 of 20 consumption. It should not be lost that the duty to pay import duty falls upon the owner of the goods. 55. The National Treasury having failed to pay the duties as and when they fell due, the Appellant was still liable to pay the import duty. 56. This means that the Appellant is supposed to pay the import duty to the Respondent, then lodge a claim with the National Treasury for a refund. 57. The Tribunal notes that the Appellant cannot lawfully rely on the doctrine of legitimate expectation against the Respondent for the reason that the Respondent did not make the promise, but the Cabinet Secretary in charge of the National Treasury did. 58. The Tribunal's mandate is limited to determining whether the impugned tax decision is correct in fact and law under the applicable tax statutes. Pursuant to Section 30 of the Tax Appeals Tribunal Act, the burden rests on the Appellant to prove that the Respondent's decision is incorrect. The Appeal must therefore be determined on the basis of the relevant statutory provisions and the evidence on record, rather than on broad equitable or public law doctrines. Consequently, the issue before the Tribunal is whether the assessment was lawfully issued and not whether any expectation arose outside the framework of the tax laws. 59. In this regard, the Tribunal relies on the Supreme Court in Communications Commission of Kenya & 5 others v Royal Media Services Ltd & 5 others (Petition 14, 14A, 14B & 14C of 2014 (Consolidated)) [2014] KESC 53 (KLR) where the Supreme Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 16 of 20 Court had the following to say about the doctrine of legitimate expectation at paragraph 269 of the judgment: [269] The emerging principles may be succinctly set out as follows: a. there must be an express, clear and unambiguous promise given by a public authority; b. the expectation itself must be reasonable; c. the representation must be one which it was competent and lawful for the decision-maker to make; and (d) there cannot be a legitimate expectation against clear provisions of the law or the Constitution. 60. Based on the foregoing, the Tribunal finds and holds that the Respondent did not err in demanding import duty from the Appellant. 61. With regard to import declaration fee and Railway Development Levy, the Tribunal notes that the Miscellaneous Fees and Levies Act Cap. 469C donates to the Cabinet Secretary for the time being responsible for Finance the power to grant tax exemptions. In particular, Part A and B of the Second Schedule to the said Act provide for goods exempt from import declaration fee when imported or purchased before clearance through customs; and goods exempt from the railway development levy when imported or purchased before clearance through customs. 62. Paragraphs (xxvi) and (x) of Parts A and B of the Second Schedule to the Miscellaneous Fees and Levies Act Cap. 469C empower the Cabinet Secretary for the time being responsible for Finance to grant exemptions to goods in the public interest. Having perused the letters that the Appellant provided, it is the Tribunal’s view that the Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 17 of 20 Cabinet Secretary lawfully issued tax exemptions in relation to the imported dates. 63. Considering the foregoing, the Respondent had no business assessing import declaration fee and Railway Development Levy on dates that the Appellant imported. 64. The Respondent cited the case of Cale Infrastructure Construction Co. Limited v Commissioner of Customs & Border Control Tax Appeal No. E234 of 2024 to support its case. The Tribunal examined the said case law and noted that the only common factor in the said case law and this appeal is that the taxpayer was granted tax exemptions on imports used to construct the Nairobi express way on condition that the imports must be used on the said project. All other facts were not similar. 65. Consequently, the Tribunal finds and holds that the Respondent was justified in confirming assessments in relation to import duty, but erred in confirming import declaration fee and Railway Development Levy. FINAL DETERMINATION 66. The upshot of the foregoing is that the Tribunal finds and holds that the Appeal is partially meritorious and consequently makes the following orders; - a) The appeal be and is hereby partially allowed; b) The review decision dated 13th January 2026 be and is hereby varied as follows: Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 18 of 20 i. Assessments in relation to import duty are hereby upheld; and ii. Import Declaration Fee and Railway Development Levy are set aside; and c) Each party to bear its own costs. 67. It is so ordered. DATED and DELIVERED at NAIROBI this…………10th ……..…..day of…..… July………..…2026 ………..…………………………….. … DR. RODNEY ODHIAMBO OLUOCH CHAIRPERSON ……………………………… ……..….…….. …………….. CYNTHIA MAYAKA DR. ERICK KOMOLO MEMBER MEMBER Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 19 of 20 ……………………………..…. ABDULLAHI DIRIYE MEMBER Judgment No. TAT E167 of 2026 Abson Motors Limited V Commissioner of Customs & Border Control Page 20 of 20