https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/137

Alihass Hardware Ltd v Commissioner of Micro & Small Tax Payers (Tax Appeal E791 of 2025) [2026] KETAT 137 (KLR) (30 June 2026) (Judgment) Neutral citation: [2026] KETAT 137 (KLR) Republic of Kenya In the Tax Appeal Tribunal Tax Appeal E791 of 2025 RM Mutuma, Chair, JM Malla, T Vikiru & G Ogaga, Members June 30, 2026 Between Alihass Hardware Limited Appellant and Commissioner Of Micro & Small Tax Payers Respondent Judgment Background 1.The Appellant is company domiciled in Meru town, dealing in hardware, paints and glass in specialised stores. 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 Respondent conducted a compliance check on the status of the Appellant's returns, covering the period 2021 to 2023 to check the correctness of the income declared for Value Added Tax (VAT) and Income Tax. The Respondent also sought to verify the withholding income tax (WHIT) and Pay as You Earn (PAYE). Consequently, on 22nd May 2024, the Respondent issued the Appellant with a pre-assessment notice for the period 2021 to 2023. 4.The Appellant objected against the assessments and the Respondent issued objection decision dated 29th May 2025 disallowing the Appellant's objection and thus confirming the assessments amounting to Kshs. 13,945,437.22 for VAT and Kshs. 28,058,245.45 for Corporation Tax totalling to Kshs. 42,003,682.67 being principal tax, penalties and interests. 5.The Appellant being dissatisfied with the Respondent’s objection decision, filed the instant Appeal vide a notice of appeal dated 8th July 2025. The Appeal 6.The memorandum of appeal and statement of facts were not on record. The Respondent’s Case 7.The Respondent lodged a Statement of facts dated 5th December 2025 and filed on 9th December 2025. 8.The Respondent’s case was that it noticed variance between VAT sales and Income Tax turnover in addition to over claimed salary expenses and unbanked cash. The variances were added back and charged tax. 9.It stated that it sent the pre-assessment findings to the Appellant on 12th June 2024 after which the Appellant amended the returns in disregard to the ongoing returns review. The Respondent argued that this act that could be construed as deliberate misrepresentation of tax returns with intention to evade tax. 10.The Respondent averred that the assessment was issued on a non-agreed basis to which the Appellant objected online but failed to provide grounds for rejection in line with Section 51(3) of the Tax Appeals Tribunal Act Cap 469B (TPA). 11.According to the Respondent, on 28th April 2025, it requested the Appellant to validate the objection in line with Section 51(3) of the TPA by providing grounds for objection and documents to support the same. That the documents requested included the following:i.Audited Financial statements for the period under review;ii.General ledgers, trial balances for the period under review;iii.Sales and purchases ledgers for the period under review;iv.Sales and purchases invoices for the period under review 12.According to the Respondent, the Appellant failed to respond. therefore, the Respondent sent another reminder on 12th May 2025 to which the Appellant equally failed to respond also hence the objection was considered invalidly lodged. 13.The Respondent stated that in absence of proper grounds of objection and grounds to support it, the Appellant’s objection was fully rejected. Therefore, the Respondent issued the Objection Decision dated 29th May 2025. 14.The Respondent asserted that it was carefully guided by the relevant laws and followed the due process in raising and confirming assessments issued to the Appellant. That it relied on Section 24(2) of the TPA which provides as follows:“The Commissioner shall not be bound by a tax return or information provided by or on behalf of, a taxpayer and the Commissioner may assess a taxpayer’s tax liability using any information available to the Commissioner.” 15.It averred that it raised assessments and informed the Appellant of the same in accordance with the provisions of Section 31 of the TPA. It maintained that the Appellant failed to validly lodge the objection contrary to Section 51(3)(c) of the TPA. 16.The Respondent asserted that Section 23 of the TPA mandates the Appellant to maintain documents required under any tax law and to provide the same upon request by the Respondent to ensure that the Taxpayer’s liabilities can be readily ascertained. 17.It pointed out that Section 59(1) of the TPA mandates the Respondent to require the production of documents from a taxpayer for the purposes of obtaining full information. 18.The Respondent stated that it examined all relevant available information before arriving at the objection decision. It noted that it was the Appellant who failed to provide the requisite documents to support the objection and failed to tender evidence to show how the Respondent’s assessment was erroneous. The Respondent therefore, averred that the assessment was justified and within the confines of the various tax laws. 19.According to the Respondent, the Appellant failed to provide any information or evidence to support its case despite several requests by the Respondent and therefore had not discharged its burden of proof. 20.The Respondent asserted that the Appellant has not discharged its burden of proof under Section 56(1) of the TPA and Section 30 of the Tax Appeals Tribunals Act Cap 469A(TATA). The Respondent therefore stated that the Appellant failed to prove that the assessments were excessive or erroneous thus the appeal is devoid of any merit and ought to be dismissed. Respondent’s Prayers 21.The Respondent prayed that this Honourable Tribunal be pleased to find that:a.The Respondent’s Objection Decision dated 29th May 2025 as proper and in conformity with the provisions of the law.b.The appeal is devoid of merit and ought to be dismissed with costs awarded to the Respondent. Issues for Determination 22.Having carefully evaluated parties’ pleadings the Tribunal identified the following issues for determination:a.Whether the appeal was valid; andb.Whether Respondent erred in confirming the assessment. Analysis and Findings A. Whether the appeal is valid 23.As pointed out above, the memorandum of appeal and statement of fact were not in record. Therefore, the question is whether the appeal is valid. 24.Section 13(2) of TATA provides as follows:(2)The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the Tribunal, of—(a)A memorandum of appeal;(b)Statements of facts;(c)The appealable decision; and(d)Such other documents as may be necessary to enable the Tribunal to make a decision on the appeal. 25.Apart from that, Rule 3(2) of the Tax Appeals Tribunal (Procedure) Rules, 2015 provides that:-(2)The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the clerk, of—(a)a memorandum of appeal;(b)statement of facts; and(c)the tax decision. 26.In Genpely General Contractors Limited v Kenya Revenue Authority [2023] KETAT 880 (KLR); and Ngai v Commissioner of Domestic Taxes [2023] KETAT 542 (KLR) this Tribunal struck out an appeal on the basis that the Appellant failed to file statement of facts. 27.In Speaker of National Assembly v Njenga Karume [2008] 1 KLR 425 the Court held that, “where there is clear procedure for the redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed.” 28.The memorandum of appeal serves a fundamental purpose in the framework of proceedings: it defines the scope of the appeal by setting out the specific grounds upon which the Appellant challenges the Commissioner’s decision, and it anchors all other pleadings, including the statement of facts. Without a memorandum of appeal, the Tribunal is left without the essential document identifying what decision is challenged, on what grounds, and what relief is sought by an appellant. 29.In the absence of a memorandum of appeal and statement of facts, there are no pleadings and the appeal cannot be said to have been properly constituted. 30.This Tribunal’s jurisdiction to entertain and determine an appeal on its merits is contingent upon the appeal having been validly and properly constituted in accordance with the TAT Act and the TAT (Procedure) Rules, 2015. Where the Appellant has failed to comply with the mandatory requirement to file a memorandum of appeal, a document that goes to the very root of the appeal, the proceedings are not merely irregular, they are defective. 31.Whereas the Respondent demanded for taxes amounting to Kshs 42,003,682.67, the Appellant failed to act diligently as it did not provide its memorandum of appeal and statement of facts hence rendering the Appeal incompetent and worthy to be struck out. 32.Drawing from the above, the Tribunal finds that, in the absence of a memorandum of appeal and statement of facts, there is no valid appeal before the Tribunal. 33.The Tribunal did not delve into the other issue for its determination as it has now been rendered moot. Determination 34.The upshot to the foregoing is that the Tribunal finds and holds that the Appeal is incompetent, and accordingly makes the following orders:a.The appeal be and is hereby struck out; andb.Each party to bear its own cost. 35.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 30TH DAY OF JUNE 2026.ROBERT M. MUTUMA - CHAIRMANJIMMY M. MALLA - MEMBERDR. TIMOTHY B. VIKIRU - MEMBERGLORIA A. OGAGA - MEMBER