https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/317

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO. E1295 OF 2025** **ALUFACADE KENYA LTD............................................................................. APPELLANT** **VERSUS** **COMMISSIONER OF DOMESTIC TAXES………………….…………........ RESPONDENT** **JUDGMENT** **BACKGROUND** 1. The Appellant is a limited liability company whose principal business activity is the purchase and sale of glass products. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act Cap 469 Laws of Kenya. Under Section 5(1), the Respondents is an agency of the Government for the collection and receipt of all tax revenue. Further under Section 5(2) with respect to the performance of its functions under subsection (1), the Respondent is mandated to administer and enforce all provisions of the written laws as set out in Part 1 & 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenue in accordance with those laws. 3. The Respondent issued a demand for tax to the Appellant on 28th August 2025 of Kshs 720,744.00 (Excise Duty) and Kshs 6,122,480.00 (VAT). 4. The Appellant objected to the demand vide its letter dated 26th September 2025, which the Respondent reviewed and issued its Objection Decision on 23rd October 2025. 5. Aggrieved by the Respondent’s decision, the Appellant filed its Notice of Appeal dated 13th November 2025 filed on even date. **THE APPEAL** 1. The Appeal is premised on the following grounds of appeal as stated in the Appellant’s Memorandum of Appeal dated and filed on 13th November 2025. 1. That the Respondent erred in law and in fact by relying on the provisions of the Excise Duty (Amendment) Act 2025 retrospectively to assess and demand additional Excise Duty and Value Added Tax of Kshs 6,122,480.00 2. That the Respondent erred in law and fact by relying on the Excise Duty (Amendment) Act, 2025 to assess Excise Duty and Value Added Tax, notwithstanding its own admission in its Review Decision of the inherent ambiguity arising from the Tax Law (Amendment) Act, 2024. 3. That the Respondent erred in law in relying of High Court Kisumu Constitutional Petition Number E017 of 2025; Peter Imbayi Indasi vs State Law office &Kenya Revenue Authority to demand principal Excise Duty and Value Added Tax of Kshs 720,744.00 **THE APPELLANTS CASE** 1. The Appellant’s case is premised on its; 1. Statement of Facts dated and filed on 13th November 2025 together with the documentation attached thereto. 2. Written submissions dated and filed on 18th May, 2026. 2. The Appellant averred that the Respondent erroneously relied on the Excise Duty Amendment Act 2025 and that the taxes demanded were unfair and undue. It averred that the Respondent’s reliance on the Excise Duty Amendment to assess and demand additional Excise Duty and Value Added Tax offended the principle of prospective application of the tax statutes. It pointed out that it imported the impugned consignment consisting of float glass on 27th March 2025. 3. The Appellant asserted that at the time of importing the impugned consignment, the applicable law was the Excise Duty Act Cap 472 as amended by the Tax Laws (Amendment) Act 2024 which introduced Excise Duty exclusively on products falling under tariff code 7007, as confirmed by the Public Notice issued on 27th December, 2024. It stated that it did not import products under tariff code 7007, but rather under tariff code 7005, whose application the Respondent has not disputed. It therefore argued that, as such, no Excise Duty was due in respect of the consignment in question, as the changes in the Excise Duty Act did not affect products of tariff code 7005. 4. It stated that the Excise Duty Amendment Act was effected into law on 17th April 2025 and sought to retrospectively excise float glass of tariff code 7005 and that previously, only float glass of tariff code 7007 was excised, as was provided for by Tax Laws Amendment, 2024. 5. It was the Appellant’s averment that the Respondent’s reliance on the Excise Duty Amendment was legally untenable, as the Excise Duty Amendment Act 2025 was assented to on 17th April 2025, well after the date of the importation of the consignment in contention.It therefore argued that the application of the Excise Duty Amendment to transactions that occurred prior to its enactment offended the well-established principle against the retrospective application of laws, particularly where such application adversely affected vested rights or imposed tax obligations not in force at the material time. 6. The Appellant stated that while it was cognisant that the Excise Duty Amendment, purported through its short title, to backdate its effective date to 27th December 2024, the Appellant averred that such retrospective application, particularly in so far as it impacts the Appellant’s prior lawful conduct and importations, amounted to unconstitutional deprivation of the Appellant’s property rights. 7. The Appellant averred that the imposition of Excise Duty at the rate of 35% or Kshs 200 per kilogram on products classified under tariff code 7005, after the importation of the impugned consignment, impaired the Appellant’s property rights and undermined the legitimate expectation that taxation ought only to be levied under laws in force at the time of the taxable event. 8. It was the Appellant’s contention that, in relying on the Excise Duty Amendment, the Respondent sought to impose Excise Duty Obligations on transactions that had already been lawfully undertaken in accordance with the prevailing laws at the time of importation. This it argued, constituted an impermissible retrospective application of the Excise Duty Amendment Act, 2025, which the Appellant vehemently objects to. 9. The Appellant cited the findings of the High Court in the case of **Kenya Bankers Association v Attorney General & Another; National Assembly (Interested Party) (2020) eKLR** (the **KBA** Case) wherein the High Court emphatically held that tax laws must ordinarily operate prospectively unless the legislature has, in the clearest terms, provided otherwise. More importantly, the court underscored that even where retrospective intent is evident, such application must not violate constitutional principles of legal certainty, predictability, and non-arbitrariness. It stated further that the court’s observation was that retrospective taxation undermined the ability of taxpayers to plan their affairs in reliance on the prevailing legal framework and was therefore inconsistent with the rule of Law under Article 10 and the Constitutional requirement in Article 210(1) that no tax shall be imposed except as provided by law. 10. It stated that, in the KBA case (Supra), the issue in contention was the imposition by the Finance Act 2018 of excise duty from 1st July 2018 when the said Finance Act was not passed until 21st September 2018 and not published until 28th September, 2018. 11. It averred that similarly in the present matter, while Paragraph 1 of the Excise Duty Amendment Act 2025 declared that its effective date was 27th December 2024, the Excise Duty Amendment Act 2025 was enacted almost four (4) months later, on 17th April 2025.It argued that the Amendment therefore sought to retrospectively alter the legal framework applicable at the time of importation, thereby imposing a tax burden on the tax payer that was not prescribed by law at the material time of importation of the impugned consignment. 12. The Appellant stated that the retrospective imposition of the law offended the constitutional principle of fair taxation, violated the doctrine of legal certainty, and ran counter to the strict construction rule for fiscal statutes as it was recognized in the case of **Republic v Kenya Revenue Authority Ex-parte Aberdare Freight Services Ltd (2004) eKLR and Commissioner of Domestic Taxes v Barclays Bank of Kenya Ltd (2020) eKLR**. 13. The Appellant therefore maintained that it was not required to account for any taxes at the time of importing the impugned consignment as the Excise Duty did not impose any Excise Duty on float glass of tariff code 7005. It argued that the Respondent’s reliance on an amendment that was not in force at the time of the taxable event was *ultra vires* the Excise Duty Act, and therefore null and void. 14. It asserted that, noting that the Respondent had expressly admitted in the Review Decision that it relied on the Excise Duty Amendment to demand taxes, it argued that the Respondent be found to have erred in law in applying the Excise Duty Amendment retrospectively to demand taxes from the Appellant.It stated that it relied in good faith on this legal position in making its declarations, with the understanding that the Respondent would rely on and uphold the application of the prevailing law. 15. The Appellant averred that it legitimately expected any assessment of its prior transactions would be premised on the applicable law at the material time of importation, noting that the Respondent’s Review Decision did not in any form or shape dispute the classification of the subject consignment under tariff code 7005. 16. The Appellant asserted that the Respondent was misguided in its assertion that no legitimate expectation arose in the circumstances. It argued that its legitimate expectation did not stem from any representation or conduct on the part of the Respondent; rather, it arose from the reasonable and lawful expectation that the Respondent would apply the prevailing tax law at the time of importation, being the Excise Duty Act. 17. The Appellant asserted that it structured its commercial arrangements and undertook the importation of float glass on the understanding that, under the Excise Duty Act, such imports did not attract excise duty. It argued that this constituted a legitimate expectation grounded in law, whereby each consignment would be assessed in accordance with the statutory framework in force at the date of importation. 18. The Appellant stated that it was a fundamental principle of tax law, supported by both constitutional norms and judicial authority, that taxpayers are entitled to certainty, predictability, and stability in the application of fiscal legislation so that they arrange their business affairs without the risk that their legitimate expectations will be defeated by subsequent legitimate changes imposing a higher tax burden. 19. It was the Appellant’s assertion that the obligation of the Respondent was to assess and collect taxes strictly in accordance with the law as it existed at the time the taxable event occurred.It argued that to hold otherwise would be to undermine the rule of law, violate Article 10 and Article 47 of the Constitution on fair administrative action, and impair the taxpayers’ legitimate expectation of certainty in the fiscal environment, an expectation repeatedly affirmed by the courts as essential for commercial planning and economic activity. 20. The Appellant placed reliance on the case of Keroche Industries Limited vs Kenya Revenue Authority wherein Nyamu J. affirmed that taxpayers are entitled to certainty and predictability in their dealings with revenue authorities, and that abrupt changes in interpretation or application of tax statutes offended the principle of legitimate expectation. 21. The Appellant further relied on the case **of Communication Commission of Kenya & 5 others vs Royal Media Services Ltd & 5 others (2014) eKLR** where the Supreme Court held that legitimate expectation arises where a public authority’s conduct, representation, or the legal framework leads an individual to reasonably expect a certain outcome. 22. It therefore stated that it legitimately expected that the law as it stood at the time of importation classified the goods under tariff Heading 7005 without an excise duty obligation applying to the subject consignment. It argued that the retrospective imposition of an excise duty obligation amounted to arbitrary action that undermined the Appellant’s legitimate expectation and contravened Article 47 of the Constitution, which guarantees fair administrative action. 23. The Appellant asserted that the Respondent expressly acknowledged at paragraphs 1.1 to 1.3 of the Review Decision that the Excise Duty Amendment was enacted for the purpose of correcting errors in the tariff classification, originally set out in the Tax Laws (Amendment Act). Further, that the amendment sought to rectify the incorrect citation of the tariff code to which excise duty was intended to apply. 24. It stated that in essence, the Respondent’s position was that the legitimate intention had always been to subject float glass classified under Tariff Heading 7005 to excise duty but that the Tax Laws (Amendment) Act erroneously referred to Tariff Heading 7007 instead of 7005.The Appellant averred that this constituted an unequivocal admission by the Respondent that, at the time the Appellant imported its consignment, float glass classified under Tariff code 7005 did not attract excise duty.It therefore argued that it acted lawfully and in full compliance with the prevailing statutory regime at the time of importation. 25. The Appellant contended that the initial error in excising goods of Tariff Heading 7007 in the Tax Laws Amendment, followed by its subsequent correction to Tariff Heading 7005, demonstrated an inherent ambiguity int the legislation as enacted. It stated that it remained trite law that tax laws were not concerned by what was intended by Parliament but the plain text of the law, and in this regard the plain text of the Tax Law Amendment, products of tariff code 7005 were not subjected to Excise Duty. 26. In the circumstances, it stated that where fiscal legislation was ambiguous or uncertain, the settled canon of statutory interpretation, *contra fiscum* required that such ambiguity be resolved in favour of the taxpayer, a principle which has been affirmed by courts which have held that tax obligations must arise only from clear and express statutory provisions and cannot be imposed by implication, conjecture, or administrative intention. 27. The Appellant cited the Court of Appeal findings in the case of **Commissioner of Domestic Taxes v Total Kenya Limited (2018) eKLR** where the court held that ambiguity in a charging provision ought to be resolved in favour of the taxpayer since taxes are imposed strictly by statute .It further cited the case of **Republic v Kenya Revenue Authority Ex-parte Fintel Ltd (2019) eKLR** where the High Court reiterated the same position, noting that taxpayers cannot be penalized for deficiencies in legislative drafting or administrative error. 28. The Appellant asserted that the deficiency in classification in this appeal stemmed not from any misrepresentation by the taxpayer, but from the legislature’s failure to clearly and precisely identify the correct tariff code of the product it intended to excise in the Tax Law Amendment. It argued, therefore, that it would be unjust to penalize the Appellant for an error attributable to the legislature. 29. The Appellant averred that the Respondent relied on High Court **Petition No. 017 of 2025** to proceed and demand from the Appellant the immediate settlement of principal excise duty of Kshs 720,744.00. 30. The Appellant clarified that the present Appeal was in no way related or analogous to the matter of **Petition No. 017 of 2025** as the Appeal before the Tribunal concerned solely the question of whether the impugned consignment was subject to tax in the first instance. In contrast, it stated that **Petition No. 017 of 2025** pertained to the methodology for computing Excise Duty. It therefore maintained that the object of **Petition 017 of 2025** as well as the orders subsequently issued therein, had no application to the circumstances of this case. 31. The Appellant clarified that the Petitioner in **Petition E017 of 2025** moved the High Court in Kisumu to challenge the mode of computation of Excise Duty under Section 27(a) (G) of the Tax Laws (Amendment) Act 2024 and specifically whether imported float glass should be subjected to Excise Duty of a specific rate of Kshs 200/= per Kilogram or at an *ad valorem* rate of 35%. 32. It stated that the Petitioner in the said matter did not contest the applicability of Excise Duty itself but was solely concerned with the Kshs 200/=per kilogram rate and expressly accepted the applicability of the 35% ad valorem rate. It stated further that the court, in granting interim conservatory orders, halted the application of the Kshs 200/-per kilogram rate on account of alleged unconstitutionality, while allowing the 35% *ad valorem* rate to remain in force pending hearing and determination of **Petition No. E017 OF 2025.** 33. The Appellant asserted that, of critical importance, the said ruling arose from a challenge to Section 27 (a)(G) of the Tax Laws (Amendment) Act , 2024 which imposed Excise Duty specifically on goods classified under HS Code 7007.It stated that the subject consignment it cleared, however, fell under HS Code 7005, hence, the ruling relied upon by the Respondent did not remotely relate to the category of goods under the subject consignment. 34. The Appellant asserted that its case did not concern the mode of computing excise duty, but rather challenged the very applicability of excise duty to the impugned consignment on the grounds that: - * + 1. At the material time, there was no legislation in force imposing Excise Duty on goods falling under HS Code 7005 and 2. The Appellant’s consignment under HS Code 7005 had already been lawfully released prior to the commencement of the impugned law and was therefore not subject to excise duty. 35. In its written submissions, the Appellant identified three issues for determination. 1. **The Respondent erred in law and in fact by relying on the provisions of the Excise Duty (Amendment) Act, 2025 retrospectively to assess and demand additional Excise Duty and Value Added Tax of Kshs 6,122,480** 36. The Appellant submitted that the Respondent erroneously relied on the Excise Duty Amendment Act, 2025 to assess and demand additional Excise Duty and Value Added Tax which offends the principle of prospective application of the tax statutes. It stated that it imported its consignment consisting of float glass on 27th March, 2025 and that at the time of importing, the applicable law was the Excise Duty Act Cap 472 as amended by the Tax Laws (Amendment) Act, 2024 which introduced excise duty exclusively on products falling under tariff code 7007 as confirmed by the Public Notice issued on 27th December 2024. 37. The Appellant submitted that it did not import products under 7007 tariff code 7007 but rather under tariff code 7005, whose application it should be noted the Respondent had not disputed. It therefore averred that no Excise Duty was due in respect of the consignment in question, as the changes in the Excise Duty Act did not affect products of tariff code 7005. 38. It was the Appellant’s submission that the Excise Duty Amendment Act was effected into law on 17th April 2025 and it sought to retrospectively excise float glass under tariff code 7005 whereas previously only float glass of tariff code 7007 was excised as was provided for by Tax Laws Amendment 2024. 39. The Appellant submitted that the Respondent’s reliance on the Excise Duty Amendment was legally untenable, as the same was assented to on 17th April 2025,well after the date of the importation of the consignment in contention.It therefore asserted that the application of the Excise Duty Amendment to transactions that occurred prior to its enactment offended the well-established principle against retrospective application of laws, particularly where such application adversely affected vested rights or imposed tax obligations not in force at the material time. 40. The Appellant submitted that the applicable law at the time of importation did not levy excise duty or VAT on products of tariff code 7005 which the Appellant imported. As such, being a fiscal law, it follows that its provisions had to be strictly interpreted and there was no leeway for intendment. 41. The Appellant reiterated its position by again relying on the following cases to buttress its argument: 42. **Republic v. Commissioner of Domestic Taxes Large Taxpayers Office Ex-parte Barclays Bank of Kenya Ltd. (2015)** 43. **Mount Kenya Bottlers Limited & 3 others (2019) eKLR** 44. **Kenya Bankers Association v. Attorney General & Another; National Assembly (interested Party) (2020) eKLR** 1. **Republic v. Kenya Revenue Authority ex-parte Aberdare Freight Services Ltd (2004) eKLR and Commissioner of Domestic Taxes v. Barclays Bank of Kenya Ltd (2020) eKLR** 2. The Appellant submitted that it legitimately expected that any assessment of its prior transactions would be premised on the applicable law at the material time of importation, noting that the Respondent’s Review Decision does not in any form or shape dispute the classification of the subject consignment under tariff code 7005. 3. The Appellant submitted that the above case laid down the conditions that must be met to create legitimate expectation as follows: * + 1. There must be express, clear and unambiguous promise given by a public authority. 2. The expectation itself must be reasonable 3. The representation must be one which it was competent and lawful for the decision-matter to make; and * + - 1. There cannot be a legitimate expectation against clear provisions of the law or the Constitution. 1. The Appellant submitted that it had met all the above requirements for legitimate expectation as expressed by the Supreme Court, and that it is a fundamental principle of law that taxpayers are entitled to certainty, predictability, and stability in the application of fiscal legislation so that they may arrange their business affairs without the risk that their legitimate expectations will be defeated by subsequent legislative changes imposing a higher tax burden. **b) The Respondent erred in law and in fact by relying on the Excise Duty (Amendment Act 2025 to assess excise duty and Value Added Tax, notwithstanding its own admission in its Review Decision of the inherent ambiguity arising from the Tax Laws (Amendment) Act, 2024.** 1. The Appellant submitted that the Respondent, in its Review Decision, expressly acknowledged that the Excise Duty Amendment was enacted for the purpose of correcting errors in the tariff classification originally set out in the Tax Laws (Amendment) Act, and that the Respondent also confirmed that the amendment sought to rectify the incorrect citation of the tariff code to which excise duty was intended to apply. 2. The Appellant reiterated that where fiscal legislation is ambiguous or uncertain, the settled canon of statutory interpretation, *contra fiscum,* requires that such ambiguity be resolved in favour of the taxpayer. It relied on the case of Mount Kenya Bottlers Limited & 3 others vs Attorney General & 3 others (2019) eKLR wherein it found as follows: *“In our view there cannot be an equitable construction of income tax legislation. The norm is that a taxing legislation must be construed with perfect strictness whether or not such construction is against the state or against the person sought to be taxed. If, however, there is any real ambiguity in a taxing Act, such ambiguity must be resolved in favour of the taxpayer or as it is sometimes stated: contra fiscum”* 1. The Appellant submitted that the deficiency in classification in this Appeal stems not from misrepresentation by the taxpayer, but from the legislature’s failure to clearly and precisely identify the correct tariff code of the product it intended to excise in the Tax Laws Amendment. It argued that it would be unjust to penalize the Appellant for an error attributable to the legislature. **c)The Respondent erred in law in relying on the High Court Kisumu Constitutional Petition No E017 of 2025; Peter Imbayi Indasi vs State office & Kenya Revenue Authority Principal Excise Duty and Value Added Tax of Kshs 720,744.00** 1. The Appellant submitted that the Respondent erred in relying on this **Petition No E017 of 2025** and clarified that the present appeal is in no way related or analogous to the subject matter of **Petition No E017 of 2025** as the appeal before the Tribunal concerns solely the question of whether the impugned consignment was subject to tax in the first instance. It maintained, therefore, that the object of **Petition No. E017 of 2025** as well as the orders subsequently issued therein, had no application to the circumstances of this case. 2. The Appellant submitted that the said ruling **in Petition No. E017 of 2025** arose from a challenge to Section 27(a) (G) of the Tax Laws (Amendment) Act, 2024 which imposed Excise Duty specifically on goods classified under HS Code 7007.The subject consignment that it cleared, however, fell under HS Code 7005, hence the ruling relied upon by the Respondent did not remotely relate to the category of goods under the subject consignment. 3. It was the Appellant’s submission that its case did not concern the mode of computing excise duty, but rather challenged the very applicability of excise duty to the impugned consignment on the grounds that: * + 1. At the material time, there was no legislation in force imposing Excise Duty on good falling under HS Code 7005 and 2. The Appellant’s consignment under HS Code 7005 had already been lawfully released prior to the commencement of the impugned law and is therefore not subject to excise duty. **The Appellant’s Prayers** 1. The Appellant prayed that: 1. The Review Decision dated 23rd October 2025 assessing Excise Duty and Value Added Tax of Kshs 6,122,480.00 and demanding for immediate settlement of the principal Excise Duty and Value Added Tax of Kshs 720,744.00 be set aside in its entirety. 2. The appeal be allowed. 3. The costs of this appeal be provided for. 4. Any other orders and/or remedies that this Honourable Tribunal deems just and reasonable. **THE RESPONDENT’S CASE** 1. The Respondent’s case is premised on its Statement of Facts dated and filed on 20th February, 2025. The Respondent did not file its written submissions. As such its case will be considered on the basis of its pleadings on record. 2. The Respondent stated that the Tax Laws (Amendment) Act of 2024 introduced a number of changes, including excise duty rates on various goods and services, effective from 27th December 2024. It stated further that among the affected goods were imported float glass and surface ground or polished glass, in sheets, whether or not having any absorption, reflecting or non-reflecting layer, but not otherwise worked, excluding those originating from EAC partner states that meet the EAC rules of origin criteria. 3. It averred that the description of the product was noted to have been given insufficient detail to pinpoint the HS Code classification, as it was erroneously cited as tariff heading 7007 instead of 7005. It stated that to address this, the Excise Duty (Amendment) Act, No. 2 of 2025 of 17th April 2025 amended the previous legislation by deleting Heading 7007 and replacing it with Tariff 7005. It asserted that, in effecting the correction, Paragraph 1 of the Amendment Act explicitly stated that the effective date of the amendment remained 27th December 2024. 4. It asserted that this meant that declarations made during this period were subject to excise duty at 35% of Customs value or Kshs 200 per kilogram except for goods meeting the EAC rules of origin criteria. It averred that it was against this background, declarations made during this period were subject to excise duty at the rate of 35% of customs value or Kshs 200/kg with the exception of goods meeting the EAC rules of origin criteria. 5. The Respondent stated that it had noted that between 27th December 2024 and 17th April 2025 the Appellant had imported goods from outside the EAC region under Tariff 7005 with a declared customs value of Kshs 1,775,232.00. Therefore, based on the amendment introduced by the Excise Duty (Amendment) Act of 2025 the goods imported were subject to excise duty at the higher of 35% of the customs Value or Kshs 200/- per Kilogram effective 27th December 2024. In view of this, it stated that a summary of taxes was established and a demand of Kshs 6,122,480.00 was made. 6. The Respondent averred that, in compliance with the said orders, it demanded payment based on the ad valorem excise duty rate pending the hearing and determination of the matter. 7. The Respondent reiterated its position as stated in the objection decision communicated to the Appellant and stated that, in the Appeal herein, it issued a preliminary finding on the implementation of the Excise Duty (Amendment)Act No. 2 of 2025, which came into operation on 27th December 2024.It reiterated that the Amendment imposed excise duty on tariff 7005 at a rate of 35% of customs value or Kshs 200 per Kshs excluding those originating from EAC Community partner states. 8. The Respondent averred that it analysed the Appellant’s imports for the period 27th December 2024 to 16th May 2025 and established that the declaration did not indicate any evidence of excise payments on its imports, prompting it to demand the tax shortfall. It argued that it took this action since declarations made during this period were to be subjected to excise duty of 35% of customs value; hence it correctly reclassified the imported goods under Tariff head 7005. 9. The Respondent averred that, in its further implementation of the tariff, it analysed Constitutional **Petition No. E017 of 2025: Peter Imbanyi Indasi vs State Law Office & Kenya Revenue Authority,** wherein the Court issued interim conservatory orders staying the specific rate of Kshs 200 per kg and that it did not interfere with the application of the *ad valorem* Excise Duty at the rate of 35%. 10. The Respondent stated that the amendment in the excise duty Act was occasioned by an apparent error in the HS Code classification under HS Code 7007 due to insufficient description of the goods; upon proper description, the goods were reclassified under the HS Code 7005. 11. It was the Respondent’s averment that despite the amendment/correction, paragraph 1 of the Amendment Act explicitly stated that the effective date of the amendment remained 27th December 2024; thus, it neither applied the law retrospectively nor based its decision on an ambiguity. **Respondent’s Prayers** 1. The Respondent prayed that the Tribunal would: - 1. Dismiss the Appeal. 2. Uphold the Respondent’s decision dated 23rd October 2025. 3. Award the Respondent the costs of the Appeal. **ISSUES FOR DETREMINATION** 1. The Tribunal has considered the parties’ pleadings, the documentation and the Appellant’s submission and is of the view that this appeal raises one issue for determination, namely whether *the Respondent’s additional Assessment is justified.* **ANALYSIS AND FINDINGS** 1. The genesis of the dispute was the Respondent’s demand for Excise duty and VAT from the Appellant after an amendment was effected in the Tax Laws (Amendment) Act 2025.The Appellant had imported a consignment of float glass on 27th March 2025 under HS Code 7005. 2. The Tribunal notes that the Act which introduced the Excise Duty on products falling under HS Code 7007 was confirmed by the Public Notice issued on 27th December 2024. It is important to note that the Appellant imported goods under HS Code 7005 and that, at the time of importation, the goods were not subject to Excise Duty. 3. However, the Tax Laws Amendment which introduced the Excise Duty was effected into law on 17th April 2025. In its objection decision at Paragraphs 1.1,1.2 and 1.3 the Respondent had stated as follows: **“1.1**. *the Tax Laws (Amendment) Act of 2024 introduced a number of changes including excise duty rates on various goods and services effective from 27th December, 2024.Among the affected goods was “imported Float glass and surface ground or polished glass, in sheets whether or not having an absorbent, reflecting or non-reflecting layer, but not otherwise worked” excluding those from originating from EAC parties states that meet the EAC rules of origin criterion.* **1.2*.*** *However, it was noted that the description of the product was given insufficient data to pinpoint the HS Code classification, it was erroneously cited as Tariff heading 7007 instead of 7005.* **1.3**. *Consequently, to address this the Excise Duty (Amendment) Act No.2 of 2025 of 17th April 2025 amended the previous legislation by deleting Tariff Heading 7007.In effecting the correction, Paragraph 1 of the amendment Act explicitly, stated that the effective date of the amendment remains 27th December, 2024”* 1. The Tribunal notes that the Respondent admitted to making an error in the tariff classification. The publication of 27th December 2024 indicates that one of the tariff codes that was chargeable to Excise duty was HS Code 7007, while the Appellant’s product was HS Code 7005. This, in the Tribunal’s view, created a legitimate expectation on the part of the Appellant. It is also possible that the goods may have been long sold at prices that considered the non-charging of the Excise Duty for the Respondent to punish the Appellant by retrospectively demanding tax for an error that is not attributable to the Appellant would be unjust. In the Tribunal’s view, would be an unreasonable exercise of power and discretion that would justify the Tribunal intervening. 2. The Tribunal relies on the case **of Noor Machar Hussein & 4 others vs Minister of State for Planning National Development and Vision 2030 & others (2012**) where the court held: - *“If statutory power is exercised in a manner contrary to the drafters or against public interest, the power can be said to have been exercised capriciously, irrationally or unreasonably. This irrationality and unreasonableness would play a major role and we shall, as courts continue to assert our traditional duty and intervene in situations where authorities like ministers and person act in bad faith, abuse power, fail to take into account relevant considerations or act contrary to legitimate expectations.”* 1. The Tribunal further relies on the case of **Kenya Revenue Authority v Export Trendy Company Limited (Petition No. 20 of 2020(2022)** where the Supreme Court held: *“A legitimate expectation arises where a person responsible for making a decision has induced in someone a reasonable expectation that he will receive or retain a benefit of advantage”* 1. It is the Tribunal’s considered view that while enactment of law brings order and justice, such laws should not be intended to cause injustice due to another party’s errors. 2. In view of the foregoing, the Tribunal finds that the Respondent’s additional assessments were not justified. **FINAL DECISION** 1. The upshot of the foregoing is that the Appeal is meritorious and the Tribunal proceeds to issue the following orders; 1. The appeal be and is hereby allowed. 2. The Respondent’s Objection Decision dated 23rd October be and is hereby set aside. 3. No orders as to costs. 2. Orders accordingly. **DATED and DELIVERED at NAIROBI this ……..…7th .....….. Day of……..…August........… 2026** **................................................................** **DR. RODNEY ODHIAMBO OLUOCH** **CHAIRMAN** **……………………………. ……..............……………..** **ABDULLAHI M. DIRIYE DR. ERICK K’OMOLO** **MEMBER MEMBER**