https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/266

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO. E1130 OF 2025** **ALEXANDER HANS DOLL……….………………………………………….….... APPELLANT** VS COMMISSIONER OF DOMESTIC TAXES……………………………………..RESPONDENT **JUDGMENT** BACKGROUND 1. The Appellant herein is an individual taxpayer who, in the year of income 2019, served as Managing Director of Dow Chemical East Africa Ltd ("Dow Chemical"). 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 assessing, collecting and accounting for all revenues in accordance with those laws. 3. The Appellant, was employed as Managing Director of Dow Chemicals Limited in the year of income 2019. It is claimed that the Appellant earned employment income in Kenya during the 2019 year of income. 4. On 14th April 2020, an itax payment registration slip was generated on the Appellant's PIN towards the balance of tax and on 20th April 2020 the payment made. 5. The Appellant sought to amend its returns and was allowed by the Respondent. The Appellant after amendment sought for a refund of Kshs. 54.384.459.67 on 17th October 2022 via the itax portal. 6. Respondent reviewed the application and issued a refund claim rejection on 9th November 2022. The Appellant subsequently made several repeat applications for refund of the same amount, applications which were responded to by rejection orders from the Respondent. 7. Aggrieved by the Respondents rejection of the refund claim dated 11th September 2025, the Appellant filed the instant Appeal vide notice of appeal dated 9th October 2025 and filed on the even date. **THE APPEAL** 1. The Appellant lodged memorandum of appeal dated 23rd October 2025 and filed on the even date raising the following grounds: 2. That the Respondent erred in law and acted ultra vires Sections 28, 31 and 47 of the Tax Procedures Act Cap 469B(TPA) by failing to apply and/or refund an ascertained overpayment, and by rejecting the refund application. 3. That the Appellant is entitled to a cash refund of ascertained overpaid taxes amounting to Kshs 54,384,459.67, the Respondent having failed to apply or remit the same in accordance with the clear statutory order prescribed under Section 47 of the TPA. 4. That the Appellant is entitled to late payment interest at the rate of 1% per month due to Respondent's failure to process refunds within the statutory timelines. 5. That the Respondent erred in law and acted ultra vires Section 47 of the Tax Procedures Act and Sections 37 and the PAYE Rules under the Income Tax Act by misclassifying the Appellant's claim as a PAYE matter (or "tax paid in error") instead of an individual income taxoverpayment duly refundable under Section 47. 6. That the Respondent erred in law and acted ultra vires Section 47 of the TPA by delaying and failing to conclude the audit within the statutory one hundred and twenty (120) days, with the legal consequence that the Appellant's refund application is deemed ascertained and approved. 7. That the Respondent erred in law and acted ultra vires Section 49 of the TPA, Article 47 of the Constitution, and Sections 4 and 6 of the Fair Administrative Action Act by rejecting the Appellant's refund applications without furnishing written reasons rendering the refusals procedurally improper and a nullity. 8. That the Respondent erred in law and acted ultra vires Article 47 of the Constitution, Sections 4 and 6 of the Fair Administrative Action Act, and Section 49 of the TPA by handling the Appellant's refund claim in a manner that was biased, unreasonable, and procedurally unfair. **The Appellant’s Case** 1. The Appellant relied on its statement of facts dated 23rd October 2025 and filed on 23rd October 2025. 2. The Appellant stated that he earned employment income in Kenya during the 2019 tax year. In compliance with the tax laws in Kenya, which requires balance of tax for the tax year to be paid by 30th April of the subsequent year, balance of tax calculations were done and prepared by the Appellant and his tax advisors. 3. He stated that on 14th April 2020, an iTax Payment Registration Slip for Kshs 63,845,265.00 was generated on the Appellant's PIN toward the 2019 balance of tax. On 20 April 2020, A payment/remittance of Kshs 63,845,265.00 was made to the Respondent against that slip, crediting the Appellant's individual ledger. 4. The Appellant stated that he filed the original 2019 return on 6 May 2020. He stated that his tax advisers identified an error to the effect that the PAYE had been reconciled using cumulative YTD rather than month-by-month figures, inflating self-assessed balance of tax. **Amended Tax Return and Overpayment Arising** 1. The Appellant stated that on 14 May 2020, he filed an amended 2019 return within time and that the amendment reflected the correct monthly computation and established an overpayment of Kshs 54,384,459.67 on the Appellant's individual account. He stated that the Respondent approved the amendment in its systems and issued a formal Approval Notice on 3rd March 2021, expressly indicating "APPROVED, DOCUMENTS AVAILED." According to the Appellant, no contrary assessment has ever been issued against the Appellant for the year 2019. 2. The Appellant contended that at the material time, TPA Section 31(2)-{3) allowed amendment within five years and required the Commissioner to accept or reject (with reasons) within 30 days. He noted that the Commissioner is empowered to accept or reject an amended return. 3. According to the Appellant, by approving the amended return, the Commissioner ascertained the existence of the Kshs 54,384,459.67 overpaid tax on the Appellant's account, with no further tax due for 2019. The Appellant reiterated that the Commissioner did not issue any additional assessment or adjustment to contradict the approved figures therefore, the overpayment of Kshs 54,384,459.67 stood as an acknowledged credit on the Appellant's income tax ledger. 4. The Appellant averred that under Section 47 of the TPA (as it then stood), a taxpayer who has overpaid tax may apply for a refund of the overpayment within five years. He stated that overpayment arose from a self-assessment correction (not from PAYE withholding errors by the employer), and it resided in his individual tax account as an unapplied credit. Accordingly, the he argued that over paid amount fell squarely under" refund of overpaid tax" in terms of TPA Section 47(1). **Refund Applications** **First Refund Claim - Application and Rejection (2022)** 1. The Appellant stated that having obtained the amended return approval and with the overpayment reflected in iTax, the Appellant filed a formal Income Tax refund application on 17 October 2022 via the iTax portal. Under the law applicable in 2022, the Commissioner was required to consider and determine the refund application within 90 days of receipt. He stated that statutory 90-day clock ran from 17 October 2022, making a decision due by mid-January 2023. However, the Commissioner responded much sooner by issuing a Refund Claim Rejection Order on 9 November 2022. 2. The Appellant stated that the notice of refusal did not provide a substantive explanation addressing the merits of the claim and that it merely stated: "Please amend the return and capture the correct figures as per the P9. The Appellant stated that this remark suggested that the Commissioner believed the return data did not match the refund sought. The Appellant stated that he was perplexed by this response, given that the return had already been amended and approved with the correct figures drawn from the employer's P9A. 3. He averred that the rejection notice amounted to a boilerplate instruction rather than an actual reasoned decision. He averred that no separate statement of reasons accompanied the rejection, contrary to the Commissioner's duty under TPA Section 49 to include a statement of reasons when refusing an application. **Second Refund Claim - Application and Rejection (2022-2023)** 1. Following the first rejection, the Appellant's representatives contacted the assigned Respondent's refunds officer for clarification. It became apparent that the rejection may have been based on a mistaken view that the refund claim was misclassified or that the Appellant's ledger did not show the credit. To allay any confusion, the tax advisors confirmed via iTax that the overpayment credit was available and that the claim type selected was indeed "Income Tax overpayment." They also updated the bank account details on iTax, anticipating the need to address the "correct figures" comment. 2. The Appellant then re-applied for the refund on 15th December 2022, using the prescribed iTax form and attaching the prior correspondence and supporting documents. according to the Appellant, this second claim was submitted within weeks of the first rejection, still well within statutory time. On 3 February 2023, the Commissioner issued another Income Tax Claim Rejection but in this second refusal, the remarks field cited two grounds: (a) a "bank details mismatch," and (b) an assertion that the refund had been filed under the wrong category specifically, it stated the claim should be classified not as "tax paid in error" but as an "overpayment of PAYE." 3. The Appellant asserted that the rejection notice provided no further explanation or lawful basis for these assertions, nor any reference to evidence. According to the Appellant, the "bank details mismatch" presumably referred to an inconsistency between the bank account information in the refund form and the records; however, by February 2023 the Appellant had updated his iTax profile to the correct bank account. 4. He stated that the "wrong refund type" contention appeared to misconstrue the nature of the overpayment: the tax paid on 20 April 2020 was a self-assessment payment, not a payroll withholding remittance by an employer. He stated that the overpaid amount was therefore, an Income Tax overpayment on the Appellant's individual account. He stated that it was not "tax paid in error" in the sense of a mistaken payment to the wrong tax head, nor was it an "over-deducted PAYE" to be addressed under special PAYE rules. The Appellant averred that it was simply an overpaid individual income tax. The Appellant reiterated that the applicable refund provision was TPA Section 47 and the Commissioner's suggestion to classify it differently had no support in the law or the facts. 5. The Appellant contended that despite the inadequacy of these reasons, the Commissioner did not provide a formal statement of reasons alongside the rejection order. He averred that this omission breached the mandatory requirement of TPA Section 49 and the Appellant's right to fair administrative action. **Third Refund Attempt - Audit Referral (2023)** 1. After the second rejection, the Appellant's representatives engaged in further discussions with the Respondent's Domestic Taxes Department. On 7 February 2023, they lodged a third refund application. However, the Commissioner issued another Rejection Order Refund Rejection Order dated 16 March 2023 and the matter to "referred to audit" and stated that the Appellant should follow up with the Nairobi North Tax Service Office (TSO) before reapplying. **Fourth Refund Claim - Pending Audit Excuse (2023)** 1. On 17 October 2023, the Appellant submitted a fourth refund application on iTax (Refund Claim Application dated 17 October 2023. the Commissioner issued yet another Rejection Order vide Refund Rejection Order dated 23rd November 2023 on basis there was audit pending. **Fifth (Final) Refund Claim and Rejection (2025):** 1. The Appellant filed yet another refund application on 15 July 2025 as a protective measure. The Respondent issued a Refund Rejection Order dated 11th September 2025 wherein the Respondent rejected the claim citing recommendations in the Audit Report. 2. The Appellant argued that no actual reasons or copy of the audit findings were provided to the Appellant. As a consequence, the Appellant contended, to date he has never been furnished with the audit report or a reasoned decision letter explaining why the Respondent believes the refund is not payable. 3. The Appellant averred that his tax advisers also sent formal correspondence to the Respondent requesting a written Statement of Reasons for the continued non-payment and a copy of any audit report or assessment related to the claim. 4. It is against the Rejection Order dated 11th September 2025 that the Appellant lodged this appeal. 5. The Appellant stated that he complied with all tax obligations and procedural requirements: he timely paid the original self-assessed tax, self-reported and corrected the overpayment through an amended return and submitted all five refund claims in the prescribed manner within the allowable period. By contrast, the Appellant stated that the Commissioner failed to fulfil multiple statutory duties: failing to issue decisions with reasons within 90 days, refusing to provide a statement of reasons upon request, not concluding the audit or objection process within lawful timeframes, and effectively withholding a verified refund without lawful cause. 6. According to the Appellant, these failures are breaches of the TPA and the Fair Administrative Action Act, as well as Article 47 of the Constitution, all of which guarantee the taxpayer a prompt, fair, and reasoned administrative process. 7. In support of the position that the Respondent erred in law and acted ultra vires Sections 28, 31and 47 of the TPA by failing to apply and/or refund an ascertained overpayment, and by rejecting the refund application, the Appellant stated that he made a genuine overpayment of income tax for the year of income 2019, which was lawfully ascertained and acknowledged by the Respondent through its own actions. The Appellant averred that he duly filed and paid his self-assessment return, later corrected the computation error through an amended return within the prescribed timelines, and the Respondent formally approved the amended self-assessment-thereby confirming both the existence and the quantum of the overpayment. 8. He stated that the Respondent went on to raise an Overpayment Adjustment Voucher for the exact amount of Kshs 54,384,459.67, a step that constitutes an administrative acknowledgment that the overpayment was valid and due to the Appellant. 9. The Appellant stated that despite this express acknowledgment, the Respondent failed to apply or refund the overpaid amount as required under the Tax Procedures Act, and instead issued a series of five rejection notices citing inconsistent and non-statutory reasons such as "bank mismatch" and "pending audit." The Appellant argued that these actions, taken in totality, demonstrate a contradiction between the Respondent's own established findings and its subsequent refusals. 10. The Appellant argued that he establishes that the Respondent's rejection of the refund claims had no lawful or factual basis, that its failure to act upon an ascertained overpayment was unreasonable and ultra vires, and that the refund remains legally due and payable to the Appellant under the mandatory provisions of Sections 28, 31, and 47 of the TPA. 11. The Appellant averred that the Kshs 63,845,265.00 was paid on 20 April 2020 toward his 2019 individual income-tax self-assessment (payment slip registered 14 April 2020). He subsequently filed an amended 2019 return on 14 May 2020 to correct a computational error (year-to-date versus month-by-month PAYE reconciliation), which established an overpayment of Kshs 54,384,459.67 on his personal ledger. 12. The Appellant further averred that the Respondent approved the amended self-assessment and a formal Approval Notice dated 3rd March 2021 expressly stating "APPROVED, DOCUMENTS AVAILED." No contrary assessment was issued against the Appellant in respect of the 2019 year of income. 13. He averred that he amended the returns within time (14 May 2020) and the Commissioner accepted the amendment (3 March 2021). He asserted that the approved amended return thereby ascertained the overpayment on the Appellant's individual account. 14. The Appellant avers that the refund and application of overpayments are governed by Section 47 TPA and that he complied with the said provisions as he made refund applications. 15. The Appellant placed reliance on the High Court case of **Commissioner of Domestic Taxes v Sony Holdings Limited (Tax Appeal E053 of 2020)**, where the Court affirmed that a taxpayer could reapply for a refund. The Court held: *"I do not find anything in the TPA, nor has the Commissioner pointed to any provision of the law, that states that a taxpayer can only make a refund claim once whereupon the claim is extinguished notwithstanding that it has not been settled."* 1. The Appellant averred that its right to claim a refund accrued on 3 March 2021, when the Respondent approved the Appellant's amended income tax return and that all subsequent refund applications and reapplications were well within the statutory five-year window and cannot be deemed time barred. In this regard The Appellant relied on the case of **Southern Cross Safaris (MSA) Limited v Commissioner of Investigations & Enforcement (Tax Appeal 638 of 2021) [2022] KETAT 1150 (KLR),** where the Tribunal held that time stops running once a taxpayer initiates the process by lodging an application for amendment of returns, and the taxpayer's right to a refund accrues from the date of approval of such amendment. 2. The Appellant stated that on 16 December 2024, the Respondent, having effectively ascertained and approved the Appellant's refund application, raised an Overpayment Adjustment Voucher for Kshs 54,384,459.67 on the Appellant's iTax ledger. Despite this confirmation, the Respondent neither applied the credit to any outstanding liability-none existed-nor paid out the refund, nor provided reasons or the referenced audit report despite repeated follow-ups by the Appellant. 3. The Appellant maintained that the overpayment was lawfully ascertained on two separate occasions: first, through the approval of the amended self-assessment return on 3 March 2021, and second, through the issuance of the Overpayment Adjustment Voucher on 16 December 2024. He stated that once the overpayment had been ascertained, and with no outstanding liabilities under the Appellant's PIN, the Respondent's lawful options were limited to either refunding the amount within the statutory pay out period or applying it prospectively to the Appellant's future tax obligations. He noted that the Respondent did neither but instead, it issued rejection decisions based on non-statutory grounds and withheld payment beyond the statutory timelines, thereby acting ultra vires Section 47 of the TPA. 4. The Appellant stated that the Respondent's issuance of an Overpayment Adjustment Voucher in this case is analogous to the issuance of a Refund Offset Voucher, as discussed in **Nabo Africa Funds v Commissioner of Domestic Taxes (Tax Appeal No. E334 of 2024)** where the Tribunal held that such a voucher constitutes clear administrative acknowledgment that the taxpayer's refund claim has been ascertained and approved. Accordingly, the Respondent's subsequent rejection of the Appellant's refund application was inconsistent with its own actions and contrary to law. 5. The Appellant also relied on the case of **Morgan Air & Sea Freight Logistics Kenya Limited v Commissioner of Domestic Taxes (Tax Appeal No. EO04 of 2023) (2024)** where the Tribunal held that the Respondent's actions in issuing Credit Adjustment Vouchers (CAVS) after rejecting refund applications amounted to an admission that the taxpayer was in fact entitled to a refund. 6. In this case, the Appellant stated that the Respondent's issuance of the Overpayment Adjustment Voucher is equally a clear admission that the Appellant qualified for a refund as applied for. Its subsequent failure to honour that acknowledgment and pay the refund is therefore unlawful, unreasonable, and procedurally unfair. 7. The Appellant therefore averred that the Respondent's refusal to apply or pay the ascertained overpayment-despite acceptance of the amended return and enabling the generation of an overpayment voucher-contradicts the Respondent's own ascertainment, defies the statutory machinery of Section 47, and is unlawful, unreasonable, and ultra vires the TPA. 8. In support of the second ground of appeal that the Appellant is entitled to a cash refund of ascertained over paid taxes amounting to Kshs 54,384,459.67, the Respondent having failed to apply or remit the same in accordance with the clear statutory order prescribed under Section 47 of the TPA, the Appellant averred that he was engaged on an overseas assignment as the Managing Director of Dow Chemical from January 2019 to March 2021. Upon completion of this assignment in March 2021, the Appellant ceased earning any employment income in Kenya and has not derived, and does not foresee deriving, any other form of taxable income in Kenya against which the overpayment could lawfully be applied. The Appellant asserted that he does not have, and will not have, any tax liabilities under Kenyan tax laws for the period in question or prospectively. 9. In view of the fact that no present or future tax liabilities exist to which the overpayment could be set off, the Appellant maintained that Section 47(5) of the TPA unequivocally mandates a cash refund of the ascertained overpayment. 10. The Appellant pointed out that having fully complied with all statutory requirements, and the Respondent having acknowledged the overpayment through its own records, the Appellant asserted that he is entitlement to a full cash refund of the overpaid taxes. 11. The Appellant averred that the provisions of section 47(5) of the TPA are mandatory in nature and leave no discretion to the Respondent and that once an overpayment is established, the Respondent must either apply it to existing liabilities (if any) or refund the remainder. The Appellant asserted that, since no outstanding tax debts exist under his account, the Respondent's continued refusal to issue a cash refund is unlawful and contrary to the express statutory scheme. 12. He relied on the case of **Nabo Africa Funds v Commissioner of Domestic Taxes (TAT Appeal No. E334 of 2024)**, where the Tribunal emphasized that Section 47(5) "clearly stipulates the steps the Respondent ought to follow while processing a taxpayer's refund claim for overpaid taxes" and held that, where no tax liability exists, "the Respondent's action of issuing the taxpayer with a refund offset voucher is an exercise in futility." 13. The Appellant further relied on **Samasource Kenya EPZ Limited v Commissioner of Domestic Taxes (TAT No. 1084 of 2022)**, where the Tribunal found that the Respondent's rejection of a VAT refund without due consideration of Section 47(5) was "inordinate and in contravention of the law." The Tribunal reiterated that the Commissioner is obligated to apply an overpayment in the statutory sequence and refund any remainder to the taxpayer. 14. The Appellant cited the cases of **Sanjeev Khagram v Kenya Revenue Authority (TAT No. E329 of 2023);** and **Republic v Commissioner of Domestic Taxes, Large Taxpayers Office ex parte Barclays Bank of Kenya Ltd [2012] eKLR** to support its case. 15. In support of the position that the Appellant is entitled to late payment interest at the rate of 1% per month due to Respondent's failure to process refunds within the statutory timelines, the Appellant averred that under Section 47 of the TPA, the Respondent is required to process and refund overpaid taxes within specific statutory timelines, failing which the overpaid amount attracts late payment interest at the rate of one percent (1%) per month or part thereof. 16. The Appellant further averred that the Respondent failed to refund the Appellant's overpaid income tax within the statutory two-year period from the date of the refund application, thereby triggering the statutory obligation to pay interest on the delayed refund. 17. He averred that his refund claim arises from an approved amended self-assessment return for the year 2019, which reflected an overpayment of Kshs 54,384,459.67. He stated that the first refund application was lodged on 17 October 2022, followed by subsequent applications dated 15 December 2022, 7 February 2023, 17 October 2023 and 15 July 2025. 18. The Appellant maintained that the Respondent failed to ascertain and determine the refund claim within the statutory timelines under Section 47(2) and (4A) of the TPA and failed to make payment within two years from the date of the original application. The Appellant stated that as of the expiry of the two-year period, the Respondent became liable to pay late payment interest on the outstanding refund amount. 19. According to the Appellant, section 47(6) of the TPA imposes a mandatory duty on the Respondent to pay interest once the statutory refund period lapses and that the obligation arises automatically by operation of law, without the need for further demand or administrative discretion. The Appellant further averred that this provision is intended to ensure fairness and accountability in the handling of taxpayers' funds and to deter unjustified retention of overpaid taxes by the Respondent. 20. In support of the position that the Respondent erred in law and acted ultra vires Section47 of the TPA and Section 37 and the PAYE Rules under the Income Tax Act by misclassifying the Appellant's claim as a PAYE matter (or "tax paid in error") instead of an individual income tax over payment duly refundable under section 47 of the TPA, the Appellant argued that the Respondent fundamentally erred in law by mischaracterising the Appellant's duly substantiated claim for refund as a PAYE matter or "tax paid in error" rather than as an individual income-tax overpayment properly falling under Section 47 of the TPA. The Appellant further averred that this misclassification led to the unlawful rejection of refund applications, notwithstanding that the overpayment had been ascertained through an approved amended self-assessment return. 21. The Appellant averred that his 2019 balance-of-tax, amounting to Kshs 63,845,265.00, was duly paid under his personal PIN on 14 April 2020, with bank remittance made on 20 April 2020. Subsequently, on 14 May 2020, the Appellant amended the 2019 self-assessment to correct a computation error. He stated that the Respondent approved the amended return on 3 March 2021. 22. He relied on Section 37 of the Income Tax Act (Cap. 470) (ITA) and the Pay As You Earn (PAYE) Rules, which provide that an employer acts as an agent of the Respondent to deduct and remit PAYE from emoluments paid to employees. The Appellant avers that this regime governs withholding by the employer and applies exclusively to payroll remittances and reconciliations under the employer's PAYE account. It does not apply to self-assessment tax payments made directly by an individual taxpayer under their own PIN. The Appellant asserted that the overpayment herein does not stem from any employer deduction error; it is an overpayment on the Appellant's own self-assessment and thus lies outside the PAYE regime. 23. The Appellant also relied on Section 47A of the TPA, which deals with tax paid in error-specifically instances where payments are made to the wrong tax head, period, or taxpayer. The Appellant averred that this Section is inapplicable to the present case, as there was no misposting or error in remittance. 24. The Appellant relied on **National Bank of Kenya Ltd v Commissioner of Domestic Taxes (TAT No. 474 of 2020, 2021),** where the Tribunal held that overpayments must be processed under Section 47 of the TPA. He also relied on **Kenya Cuttings Ltd v Commissioner of Domestic Taxes (TAT, 16 May 2025),** where the Tribunal found that once the Respondent's audit acknowledges a refund, the taxpayer has a legitimate expectation of its processing under the proper statutory route and that any relabelling or misclassification of the refund is procedurally unfair and unlawful. 25. The Appellant maintained that the Respondent's view on treating the claim as a PAYE or "tax paid in error" matter was a fundamental misdirection in law and fact. 26. Apart from the foregoing, the Appellant argued that the Respondent erred in law and acted ultra vires Section47 of the TPA by delaying and failing to conclude the audit within the statutory one hundred and twenty (120) days with the legal consequence that the Appellant's refund application is deemed ascertained and approved. He cited the case of **Kenya Cuttings Limited v Commissioner of Domestic Taxes (Tax Appeal E982 of 2024) [2025] KETAT 242 (KLR) (Civ) (16 May 2025)**, where the Tribunal held that: *"Accordingly, the finding by the Tribunal is that the Appellant is entitled to the refund claims of Kshs. 7,342,452.00 since the Tribunal had set aside the rejection orders on the same and also because a refund rejection order made more than 120 days after an audit has been carried out is deemed as having been ascertained and approved.’’* 1. To support the position that the Respondent is mandated to adhere to timeliness, the Appellant also cited the following case laws: 2. Synresins Limited v Commissioner of Domestic Taxes (Tax Appeal 1164 of 2022) [2024] KETAT 155 (KLR); 3. Samaritan's Purse v Commissioner of Domestic Taxes (TAT 82 of 2016), 4. Royal Floraholland Kenya Limited v Commissioner of Domestic Taxes (TAT Appeal No. E050 of 2023); 5. Cipla Kenya Limited v Commissioner of Domestic Taxes (Tax Appeal E338 of 2024); 6. Prudential Life Assurance (K) Limited v Commissioner of Domestic Taxes (TAT E665 of 2024); and Kenya General Industries Limited v Commissioner of Domestic Taxes (Tax Appeal E643 of 2023) [2024] KETAT717(KLR). 7. That the Respondent erred in law and acted ultra vires Section 49 of the TPA, Article47 of the Constitution, and Sections 4 and6 of the Fair Administrative Action Act by rejecting the Appellant's refund applications without furnishing written reasons-rendering the refusals procedurally improper and a nullity. The Appellant cited the case of **Joseph M. Ndirangu t/a Ndirangu Hardware v Commissioner of Domestic Taxes [2023] KEHC19357** wherein the court held the Respondent has to give reasons for its decision. The Appellant also relied on the cases of **Suchan Investment Limited v Ministry of National Heritage & Culture & 3 Others [2016] eKLR;** and **PZ Cussons East Africa Limited v Kenya Revenue Authority [2013] eKLR** to support his position. 8. Finally, the Appellant argued that the Respondent erred in law and acted ultra vires Article 47 of the Constitution, Sections 4 and 6 of the Fair Administrative Action Act, and Section 49 of the TPA by handling the Appellant's refund claim in a manner that was biased, unreasonable, and procedurally unfair. The Appellant relied on a number of case laws including **Eaton Towers Kenya Limited v Commissioner of Domestic Taxes (TAT Appeal No. E050 of 2024); Republic v Kenya Revenue Authority ex parte Shake Distributors Ltd [2012] eKLR; Geothermal Development Company Ltd v Attorney General & Others [2013] eKLR**; among others to state that the Respondent has a duty to act fairly without bias. **Appellant’s written submissions** 1. The Appellant filed written submissions dated 26th May 2006. In summary, the Appellant submitted that the Respondent’s preliminary objection is misconceived and ought to be dismissed; that the Respondent breached sections 28, 31 and 47 of the TPA by failing to apply and refund the Appellant’s ascertained overpayments of tax; that the Appellant is entitled to cash refund under section 47 of the TPA; that the applications for refund stood allowed by operation of law; and that the Respondent breached section 49 of the TPA, Article 47 of the Constitution and the provisions of Fair Administrative Action Act by failing to give reasons for its decision. 2. The Appellant also submitted that the Respondent’s decision was biased contrary to the Article 47 of the Constitution and the provisions of Fair Administrative Action Act. He also submitted that he is entitled to a refund together with interest thereon. **Appellant’s Prayers** 1. In light of the preceding, the Appellant urged this Tribunal to make the following orders: 2. That the appeal be allowed; 3. The Respondent Refund Decisions dated 11th September 2025 be declared null and void and be set aside; 4. The Respondent Refund Decisions dated 9th November 2022, 03rd February 2023, 16th March 2023 and 23rd November 2023 be declared null and void and be set aside; 5. The Appellant's overpayment of Income Tax amounting to Kshs 54,384,459.67 for the year 2019 be allowed, and the amounts claimed therein be refunded as cash refunds to the Appellant within 60 days from the date of the Tribunal's decision; 6. Late payment interest at the rate of 1% per month be paid to the Appellant due to Respondent's failure to process refunds within the statutory timelines; 7. The costs of and incidental to this Appeal be awarded to the Appellant; and 8. Any other orders that the Tribunal may deem fit. **THE RESPONDENT’S CASE** 1. In response to the appeal, the Respondent lodged a Statement of facts dated 3rd December 2025. The Respondent also filed supplementary statement of facts dated 16th January 2026. 2. The Respondent relied on section 47 of the TPA to support its case. 3. The Respondent stated that the Appellant has never made an application for refund in person. A letter appointing a tax representative is not enough and interview of the Appellant is important. 4. The Respondent's review of the Appellants returns showed that the taxpayer earned income declared and paid the said taxes. 5. The Respondent stated that there is no refund due and it's the Appellant who can make such a claim for refund should therefore be made by the Appellant and not the employer. The Respondent noted that the applications and emails were not emanating from the Appellant or PWC who were appointed thus this claim the Respondent states is not valid and adequately supported. 6. It relied on Section 56(1) of the TPA which provides that the burden of proving that the tax assessment is wrong lies with the taxpayer and the taxpayer herein failed to prove to the satisfaction of the Commissioner that the assessment was wrong. 7. The Respondent further averred that the Appellant is not deserving of a refund for the taxes paid as they were due and payable and should be upheld by this Honourable Tribunal. 8. The Respondent in the supplementary statement of facts dated 16th January 2026 wherein it stated that the Appellant was employed as managing director of Dow Chemical East Africa Limited during the 2019 tax year between 1st January 2019 to 31st December 2019 and that he applied for the Income Tax refund. 9. The claim was recommended for audit on 15th December 2022 since it was over Kshs.10 million as per the refund processing guidelines and in light of the discrepancies noted in the return declarations, the claim was also rejected and the Appellant advised accordingly and that there is no pending refund application. 10. It stated that the 90 Days refund processing timeline was adhered to but the Appellant kept communicating and thus a refund decision was issued in the past years thus the Appellant ought to have moved the Tribunal from that time since the Respondent had already issued an appealable decision. 11. The Respondent noted existence of discrepancies. It stated that there were varying declarations in both the original and amended returns. Gross Pay as per the original return was Kshs 235,778,845 while amended had Kshs 54,599,710.63. 12. PAYE as per the original return was Kshs 6,799,544.00 while the P9 form indicated Kshs 14,741,913.66 and that one of these PAYE Credits were posted in the ledger. However, there was a payment of Kshs 63 845,265.00 via PRN 2020200000923851 on 6th May 2020 which when added to Kshs 6,799,544 generates total tax payable of Kshs 70,644,809.00. 13. Upon amendment of Return, the Gross Pay was adjusted downwards to Kshs 54, 499,710.63. PAYE declared was Kshs.70,645,528.67 leading to a return credit balance of Kshs. 54,384,459.00. 14. The Respondent stated that there was a mismatch between the bank account and the claimant's details. It stated that while the claimant is an individual, the Bank Account details provided are for a company, Dow Chemical East Africa Limited. 15. It stated that Section 47 and 47A of the TPA constitutes a normal refund application. However, its validity was subject to Audit and which was not concluded because the taxpayer did not avail the requisite information as per the Audit report and email correspondence from the Audit team. 16. In relation to interest of 1% as prayed, the Respondent stated that the claim was rejected within the 90 (ninety) Days' timeline, hence interest as alluded by the Appellant does not apply as the rejection claim was done in 2022 and the Appellant had an appealable decision to proceed to the Tribunal. 17. It stated that several rejections were due to discrepancies. It pointed out that the Appellant earned employment income in Kenya during the 2019 tax year. The Respondent stated that the several rejections were just correspondences as decision was already made in 2022. 18. According to the Respondent, the Appellant assessed himself with his tax advisors and prepared a balance of calculations which was to be filed by return by 30th April 2020 as provided for in Section 28 of TPA. 19. On 14th April 2020, an iTax payment registration slip for Kshs. 63.845.265.00 was generated on the appellant's PlN toward the 2019 balance of tax. The Respondent stated that on 20th April 2020 the payment was received which was in line with the assessment returns in the system. 20. The Respondent acknowledged that the Appellant sought to amend its returns and the same was received. The Appellant after amendment sought for a refund of Kshs. 54,384,459.67 on 17th October 2022 via the iTax portal. 21. It pointed out that Section 47(3) of the TPA provides that the Respondent has to review the application for refund within 90 days and make a decision. 22. The Respondent reviewed the application and issued a refund claim rejection on 9th November 2022 which formed an appealable decision. The Respondent averred that it gave reasons for the rejection on the Income Tax Claim Rejection Order. 23. It asserted that the Appellant has admitted that the Respondent rejected the refund claim on 9th November 2022. The fact that the Respondent continued to engage with the Appellant was just correspondence since its decision was already made facts which the Appellant as admitted. 24. According to the Respondent, Section 52(1) of the TPA stipulates that a person who is dissatisfied with an Appealable decision may appeal the decision. The Appellant ought to Appeal to the tax tribunal within 30 days as provided by section 13(1) Tax Appeal Tribunal Act Cap 469A (TATA), thus, the current Appeal is null and void. 25. The Respondent urged the Tribunal to take judicial notice that the Appellant conveniently after realizing he was out of time to appeal, he sought to apply for refund each year and each year the Respondent maintained its decision of rejection of the refund claim as the same was not due and payable. 26. In response to the assertion that the Respondent erred in law and acted ultra vires section 28,31,47 of the TPA by failing to apply and/or refund an ascertained overpayment, and by rejecting the refund application, the Respondent reiterates its position as stated in the refund rejection. It asserted that if the Appellant was dissatisfied with the decision, he ought to have Appealed at the Tax Appeals Tribunal. 27. In response to the assertion that the Appellant is entitled to a cash refund of as curtained overpaid taxes amounting to Kshs 54,384,459.67, the Respondent having failed to apply or remit the same in accordance with the clear statutory order as prescribed undersection 47 of the TPA, the Respondent averred that there were varying declarations in both the original and amended returns. 28. In response to the assertion that the Respondent erred in law and acted ultra vires Section 47 of the TPA and Section 37 of the PAYE Rules under the ITA by misclassifying the Appellant's claim as a PAYE matter (or tax paid in error) Instead of an individual income-tax overpayment duly refundable undersection 47, THE Respondent averred that Section 56(1) of the TPA provides that the burden of proving that the tax assessment is wrong lies with the taxpayer and the taxpayer herein failed to prove to the satisfaction of the Commissioner that the assessment was wrong. **The Respondent’s written submissions** 1. The Respondent submitted that the Appellant was not discharged from domestic tax liability (Income Tax and VAT); and that the Respondent's decision to invalidate the Objection was proper and lawful. 2. The Appellant submitted that the Appellant did not avail the requisite documents to support his objection, nor has he done so at this Appeal clearing him from any wrong doing. It cited the case of **Republic v Kenya Revenue Authority; Proto Energy Ltd (Ex Parte) (Judicial Review Application E023 of 2021) [2022] KEHC 5 (KLR)** where it submitted that the taxpayer must present a minimum amount of information necessary to support his position and that the taxpayer's evidence must meet this minimum threshold. The Respondent submitted that the Appellant failed to discharge the burden of proof. 3. The Respondent also cited the case of **Republic v Kenya Revenue Authority; Proto Energy Ltd (Ex Parte) (Judicial Review Application E023 of 2021) [2022] KEHC 5 (KLR); and Leah Njeri Njiru v Commissioner of Investigations and Enforcement & another [2021] eKLR** to submitted that the burden of proof lies upon the taxpayer who has the duty to adduce evidence to discharge the burden. The Respondent submitted that the Appellant has not met the minimum threshold of evidence and that the letter of 12th February 2026 does not clear him, and no other documentary evidence has been availed. **Respondent’s prayers** 1. The Respondent prayed that without the clearance from the various investigation bodies the Appellant remain the owners of the accounts and as such the liability for tax stands. **ISSUES FOR DETERMINATION** 1. The Tribunal identified the following issues for determination: 2. Whether the appeal is time barred; and 3. Whether the Respondent was justified in rejecting the refund application, if so, whether the Appellant is entitled to the refund with interests thereon. **ANALYSIS AND FINDINGS** 1. **Whether the appeal is time barred** 2. The Respondent’s line of argument was that it issued income tax claim rejection order dated 9th November 2022 which formed an appealable decision. It therefore, argued that the Appellant delayed to appeal. 3. On the other hand, the Appellant argued it kept applying for refunds and the Respondent kept issuing rejection orders. The last rejection order was issued on 11th September 2025 therefore, the Appellant appealed against this decision. 4. The Tribunal noted that the Appellant made several applications for refund. The First one was dated 17th October 2022 while the Respondent issued rejection order dated 9th November 2022.The Appellant then made the second application dated 15th December 2022 which application was rejected vide the order dated 3rd February 2023. The Appellant did not tire as he filed third refund application dated 7th February 2023 while the Respondent issued refund rejection order dated 16th March 2023. 5. The Tribunal notes that pursuant to the provisions of section 3 of the TPA which at the material time defined **“tax decision”** to include**''a refund decision,’’** the refund rejection orders dated 9th November 2022, 3rd February 2023, and 16th March 2023 were not appealable decisions. Therefore, the Respondent’s assertion that the decision dated 9th November 2022 was appealable decision, is incorrect. 6. Refund decisions became appealable decisions from 1st July 2023 pursuant to the amendments to section 3 of the TPA vide the Finance Act, No. 4 of 2023. 7. The Appellant filed a fourth application for refund dated 17th October 2023. The Respondent then issue rejection order dated 23rd November 2023. Pursuant to section 47(13) of the TPA, the Appellant was at liberty to appeal against this decision. The said section provides as follows: ***47. Offset or refund of overpaid tax*** *A person aggrieved by a decision of the Commissioner under this section may appeal to the Tribunal within thirty days after being notified of the decision.* 1. The Appellant instead of utilizing the mechanism under section 47(13) of the TPA, he filed another application for review. Consequently, there is no cause of action emanating from rejection order 23rd November 2023. The cause of action would have crystallised had the Appellant filed an appeal against the said decision. 2. The Appellant filed a fifth application for refund dated 15th July 2025 which prompted the Respondent to issue a fifth rejection order dated 11th September 2025, which is the basis of this appeal. 3. While the Respondent stated that the law does not provide for many rejections, it reiterated that the rejection notice with reasons was made on 9th November 2022 thus the current Appeal is null and void. What the Respondent failed to explain is why it continued entertaining the Appellant’ application by issuing rejection orders. If the Respondent was convinced that the decision dated 9th November 2022 was final, it should have stopped at that and abstained from issuing subsequent rejection decisions. 4. The Tribunal notes that nothing under section 47 of the TPA permits taxpayers to file several applications. Similarly, nothing under the said section prohibits a taxpayer from filing subsequent applications the way the Appellant did. It is trite law that any ambiguity in interpretation of what a tax statute is should be interpreted in favour of a taxpayer. In the holding in the case of **Mount Kenya Bottlers Ltd and 3 other vs The Attorney General and 3 others, Civil Appeal No.164 of 2013(2019) eKLR**, the Court of Appeal stated: *“This common law position is what pertains and has been adopted by our courts as good law. In our view there cannot be equitable construction of income tax legislation…. If however there is any ambiguity in a taxing statute Act, such ambiguity must be resolved in favour of the taxpayer or as it is sometimes stated; contra fiscum…”* 1. What matters in our view, is that the application for refund should be made within five years from the date on which the tax was overpaid in the case of income tax in line with section 47(1) (b)(i) of the TPA. 2. It is noted that the Appellant refund accrued on 3rd March 2021 because the Respondent approved the Appellant's amended income tax return on the said date. Therefore, time started running on the said date. This Tribunal in **Southern Cross Safaris (MSA) Limited v Commissioner of Investigations & Enforcement [2022] KETAT 1150 (KLR)** had the following to state about a similar issue at paragraph 64 of the judgment: *‘‘…the Appellant’s right to claim a refund for the VAT paid in respect of services found to have been exempt services, accrued on the date the Appellant’s application for amendment of VAT returns were approved by the Respondent. The Tribunal in the circumstances finds that the Appellant’s VAT refund claim was not time barred.’’* 1. Based on the foregoing, the Tribunal finds that the decision dated 11th September 2025 is the appealable decision. Therefore, the Respondent’s preliminary objection is devoid of merits and is therefore, dismissed. 2. **Whether the Respondent was justified in rejecting the refund application, if so, whether the Appellant is entitled to the refund with interests thereon** 3. The Appellant argued that the Respondent erred in rejecting the refund application. He argued that he is entitled to the refund with interests thereon on the basis that the Respondent delayed to make the refund. Conversely, the Respondent argued in supplementary statement of facts, that the validity of the refund application was subject to audit and which was not concluded because the taxpayer did not avail the requisite information as per the audit report and email correspondence from the audit team. 4. Section 47(1) allows a taxpayer to claim for refund. It provides *inter alia*: ***47. Offset or refund of overpaid tax*** *(1) Where a taxpayer has overpaid a tax under any tax law, the taxpayer may apply to the Commissioner in the prescribed form—* *(a) to offset the overpaid tax against the taxpayer’s outstanding tax debts and future tax liabilities including instalment taxes and value added tax payable on imports; or* *(b) for a refund of the overpaid tax—* *(i)in the case of income tax, within five years from the date on which the tax was overpaid.* 1. Upon receipt of the application, the Respondent is under statutory mandate to issue a decision thereon within prescribed timelines. In this regard, section 47(2) of the TPA provides inter alia: *(2) The Commissioner shall ascertain and determine an application under subsection (1) within one hundred and twenty days and where the Commissioner ascertains that there was an overpayment of tax—* 1. The Respondent is also at liberty to conduct audit upon receipt of the application for refund but the audit must be completed within the prescribed timelines. As such, section 47(4) and (4A) of the TPA provides as follows: *(4) The Commissioner may, for purposes of ascertaining the validity of an application under subsection (1), subject the application to an audit.* *(4A) Where an application under subsection (1) has been subjected to an audit under subsection (4), the Commissioner shall ascertain and determine the application within one hundred and eighty days failure to which, the application shall be deemed to have been ascertained and approved.* 1. The Appellant filed a refund application on 15th July 2025 for income tax to which the Respondent rejected on 11th September 2025. We have no difficulty in finding that the Respondent issued the decision within the required timelines. This being the case, the next issue for determination is whether the Respondent was justified in rejecting the refund application. 2. The Respondent in its rejection order dated 11th September 2025 rejected the refund application in the following terms: ***‘‘Kindly, claim rejected as recommended in the audit report.’’*** 1. The Appellant claimed that the Respondent did not avail the audit report therefore, he did not get to know the reasons in the audit report. The Tribunal examined the documentary evidence on record and noted that the Respondent filed a one pager memo dated 16th January 2023 advising on carrying out audit in relation to the Appellant’s application. The Respondent also adduced a one pager email extract dated 25th August 2025 advising on rejecting the refund application. However, the audit report was not adduced in evidence. Therefore, the Tribunal did not have an opportunity to interact with the audit report as such, the Tribunal did not get to know the reasons that motivated the Respondent to disallow the application. 2. It should be recalled that whereas the burden of proof in tax matters rests upon the taxpayer pursuant to Section 56(1) of the TPA and section 30 of the Tax Appeals Tribunal Act Cap 469A(TATA), this does not mean that the Respondent has no role to play. The burden of proof shifts between the parties at different intervals. In **Commissioner of Domestic Taxes v Trical and Hard Limited (Tax Appeal E146 of 2020) [2022] KEHC 9927 (KLR),** the Court had the following to say: *25. I agree with the Tribunal’s holding that the burden of proof in tax matters is not stationary but is like a pendulum swinging between the taxpayer and taxman at different points but more times than not swings towards the taxpayer. The uniqueness of our tax system in placing the evidential burden of proof on the tax payer is neither a mistake nor is it unconstitutional. In* ***Republic v Kenya Revenue Authority; Proto Energy Limited (Exparte) (Judicial Review Application E023 of 2021) [2022] KEHC 5 (KLR) (24 January 2022) (Judgment)*** *the court stated that:* *The most significant justification for placing the burden of proof on the tax payer is the practical consideration that the Commissioner cannot sustain the burden because he does not possess the needed evidence. Under the system of self-reporting tax liability, the taxpayer possesses the evidence relevant to the determination of tax liability. It is simply fair to place the burden of persuasion on the taxpayer, given that he knows the facts relating to his liability, because the commissioner must rely on circumstantial evidence, most of it coming from the taxpayer and the taxpayer's records. The taxpayer must present a minimum amount of information necessary to support his position. This safety valve seems to place the burden of production on the taxpayer without relieving the Commissioner of the overall burden of proof. The tax payers’ evidence must meet this minimum threshold. A presumption of correctness arises from the Commissioner’s determination/assessment. The presumption remains until the taxpayer produces competent and relevant evidence to support his/her position. When the taxpayer comes forward with such evidence, the presumption vanishes and the case must be decided upon the evidence presented.* *26. From the above, it is clear that the evidential burden of proof rests with the taxpayer to disprove the Commissioner and that once competent and relevant evidence is produced, then this burden now shifts to the Commissioner. I have emphasized and underlined ‘competence’ and ‘relevance’ because it is only evidence that meets these two tests that demolishes presumption of correctness and swings the burden to the Commissioner. This means that even if one avails evidence but then it is found that the same is incompetent or irrelevant, then the burden continues to remain with the tax payer.* 1. The Respondent should have adduced the audit report to demonstrate how it arrived at its decision, it did not. Consequently, the Tribunal finds and holds that the Appellant demonstrated that the Respondent’s decision was opaque therefore, the same cannot be allowed to stand. 2. Article 47(1) of the constitution mandates administrative decision maker to ensure that the decision made is expeditious, efficient, lawful, reasonable and procedurally fair. Without the audit report, the Tribunal could not affirm that the Respondent's decision was fair. 3. Having established the foregoing, the pending issue for determination is whether the Appellant is entitled to interests. Section 47 (6) of the TPA allows payment of interest to the taxpayer. The said provisions provide as follows; *(6) Where the Commissioner fails to refund the overpaid tax within the period specified in subsection (2)(b), the amount due shall attract interest of one per cent for each month or part thereof during which the amount remains unpaid.* 1. We have noted above that the Respondent erred in failing to adduce audit report. As such, the Tribunal could not determine on merit, whether the Respondent lawfully rejected the Appellant’s application for refund. For this reason, the Tribunal abstains from applying Section 47 (6) of the TPA. Consequently, the Appellant’s claim on interest is hereby dismissed. **DETERMINATION** 1. The upshot to the foregoing is that the Tribunal finds that the Appeal is merited and accordingly proceeds to make the following orders:- 1. The appeal be and is hereby allowed; 2. The Income Tax Claim Rejection order dated 11th September 2025 be and is hereby set aside; 3. The Respondent is hereby directed to refund the Appellant Kshs 54,384,459.67 within ninety days from the date of delivery of this judgment; 4. Each party to bear its own cost. 2. It is so ordered. **DATED AND DELIVERED AT NAIROBI THIS 27TH DAY OF JULY 2026** **……………………………..….** **ROBERT M. MUTUMA** **CHAIRMAN** **……………………………… ……..….……..……………..** **JIMMY M. MALLA. GLORIA A. OGAGA MEMBER MEMBER** **………………………………** **DR. TIMOTHY B. VIKIRU** **MEMBER**