[2024] KETAT 1056 (KLR)

Ananas Consolidated Group Limited v Commissioner of Domestic Taxes (Tax Appeal E428 of 2023) [2024] KETAT 1056 (KLR) (12 July 2024) (Judgment)

Neutral citation: [2024] KETAT 1056 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E428 of 2023

CA Muga, Chair, BK Terer, D.K Ngala & SS Ololchike, Members

July 12, 2024

Between

Ananas Consolidated Group Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Judgment

Background 1. The Appellant is a limited liability company duly incorporated in Kenya. Its principal activity is wholesale trading.

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 Respondent is an agency of the government for the collection and receipt of all tax revenue. Further under Section 5(2) with respect to 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 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 issued additional default assessment for VAT and PAYE for Kshs 11,809, 365. 89 vide its letter dated 14th March, 2023.

4. Vide a letter dated 13th April, 2023 the Appellant wrote to the Respondent requesting leave to lodge its notice of objection outside the thirty days statutory period pursuant to Section 51(7) of the Tax Procedures Act CAP 469B of the Laws of Kenya (hereinafter ‘TPA’). The Respondent reviewed the same and accepted the Appellant’s request vide its letter dated 28th April 2023 and directed the Appellant to file a valid objection which it did on 4th May, 2023.

5. The Respondent reviewed the Appellant’s notice of objection and documentation and vide a letter dated 23rd June, 2023 issued its objection decision.

6. Aggrieved by the Respondent’s decision, the Appellant filed its undated Notice of Appeal on 19th July 2023.

The Appeal 7. The Appeal was premised on the following grounds of Appeal as stated in the Appellant’s Memorandum of Appeal dated and filed on 2nd August, 2023. a.That the Respondent erred in law and in fact by interpreting the provisions of the VAT Act and arriving at a conclusion that is unsupported by the law in denying the Appellant the right to file accurate VAT returns for the tax period in question.b.That the Respondent erred in law and fact by failing to consider that the Appellant was duly registered for VAT and incurred the VAT inputs in order to make taxable supplies.c.That the Respondent erred in law and fact by taking into consideration unnecessary factors such as whether the suppliers had declared the specific invoices as sales in their self-assessment VAT returns when arriving at its objection decision.d.That the Respondent erred in law and fact by disallowing purchases that was supported in the objection.e.That the Respondent erred in failing to take into consideration the evidence of the purchase invoices and the bank statements supporting payment of the tax inputs claimed.f.That the Respondent erred in law and in fact by applying inaccurate principles in its finding thereby arriving at a decision that was fundamentally flawed.

The Appellant’s Case 8. The Appellant contended that the Respondent erroneously relied on immaterial considerations in arriving at the conclusion that the Appellant did not qualify to claim input tax in the assessed periods and that the Respondent specifically relied on the allegation that majority of the suppliers had not declared the specific invoices presented for consideration as sales in their self-assessment VAT returns .It contended further that relying on this premise was wrong because the declarations of the specific invoices by the suppliers of the items on which input VAT is claimed , or lack thereof , does not disqualify a registered person from claiming input VAT.

9. The Appellant asserted that parameters for claiming input VAT are clearly laid down under Section 17(1) of the Value Added Tax Act, CAP 476 of Kenya’s Laws (hereinafter “VAT Act”) and that is its clear from the provisions that input VAT can be claimed by any registered persons for supplies acquired for the purpose of making taxable supplies. It contended that at the time when the VAT input was incurred, it was duly registered and that supplies were used for the purpose of making taxable supplies.

10. It was the Appellant’s averment that the right to deduct input tax is an integral part of the VAT scheme that allows a taxable person who makes transactions in respect of which VAT is deductible to deduct the VAT in respect of goods and services acquired by him provided that such goods and services have a direct and immediate link with the output transaction in respect of which VAT is deductible.

11. The Appellant stated therefore that the Respondent’s decision to disallow recovery of input VAT incurred by the Appellant implies that there were no purchases made by the Appellant in furtherance to its taxable business for the period February 2018 to July 2022 and denied it the right to deduct input VAT.

12. It was the Appellant’s submission that the Respondent misinterpreted Section 17(2) of the VAT Act to imply that when a taxpayer files its VAT return late, the return should not reflect the taxpayer’s actual VAT transactions that would have been reflected if the VAT return had been submitted on time. It submitted further that this interpretation infringes on the Appellant’s right to file accurate VAT returns that include the input VAT incurred in the tax period in question. It averred that this interpretation was not supported by the provisions of the VAT Act and that tax laws ought to be interpreted with considerations of intendment.

13. The Appellant cited the Court of Appeal case of Commissioner of Domestic Taxes (Large Tax Payer Office) vs Barclays Bank of Kenya Ltd (2020) eKLR (Civil Appeal No.195of 2017) where it was held as follows:“…and the first judgement represent a correct statement of law, namely strict construction of tax legislation, so that the tax denied must fall within the terms of the statute without ambiguity. If there’s any ambiguity in the legislation, it is not to be rectified by considerations of intendment, but by amending the legislation…”

14. The Appellant argued that late filing of returns should not bar a registered taxpayer from claiming income tax expense and that if the Respondent’s decision is allowed, it would imply that input tax claimable in a return should be based not on the tax period that the return is submitted leading to an absurdity. It contended therefore that the law does not give the Respondent the power to deny a taxpayer the right to claim input tax on the grounds of late filing. The Appellant supported its argument by citing the case of Rabai Operation & Maintenance Limited vs Commissioner of Domestic Taxes ML TA No.7 of 2017(2019) eKLR where the Court held as follows:“the requirement for filing VAT return was not a condition for deduction of input VAT under section 11 of the VAT Act (Repealed) that was similar to section 17(2) of the VAT Act..”

15. The Appellant further relied on the Tribunal’s holding in the case of Skyline Tower Investment vs Commissioner of Domestic Taxes TAT No 256 of 2018 (UR) where it held as follows:“the requirement for filing VAT monthly returns was not a condition for deduction of input tax and that in the absence of clear, certain and unambiguous legal provisions requiring the Appellant to file a VAT3 return in order to claim an input tax deduction, the Appellant was entitled to deduct input tax for the period under review. The Tribunal held that if the intention of the legislative required the filing of a VAT3 return before an input claim is allowed, the VAT legislation would have expressly provided so. Hence the Commissioner’s decision to disallow deduction of input VAT amounted to an imposition of a constructive penalty not provided by law”

16. The Appellant submitted that the Tribunal’s interpretation of Section 17(2) of the VAT Act was a strained, tortured and laboured construction contrary to established principles of interpretation of tax statutes elucidated in the case of Keroche Industries Limited vs Kenya Revenue Authority & Others NRB HS Misc Civil Appeal No.743 of 2006(2007) eKLR. The Appellant however relied on the decision of High Court in Highlands Mineral Waters Limited vs Commissioner of Domestic Taxes, (2021) eKLR which case had similar facts and the question before the High Court was whether a taxpayer ought to be denied the right to file accurate VAT return’s which include input VAT incurred in a particular tax period for the mere reason that the returns were filed late. The Court found as follows:“Section 17(1) and (2) of the VAT Act, permits the taxpayer to claim input tax at any time provided the claim falls within 6 months from period which the supply or importation occurred notwithstanding that the VAT return is filed late. In other words, the fact of late filing does not preclude a taxpayer from claiming input VAT and that this claim ought to be allowed as long as Return is filed and claimed within six months from the date of supply or importation. Neither section 17 nor 44 of the VAT Act permit the Commissioner to disallow input VAT claim on the ground that the VAT Return was filed outside the period permitted. The Commissioner power is limited to allowing an extension of time for filing the return upon an application whose effect is to relieve the taxpayer from the penalty or accept the return and demand the appropriate penalty..”

17. It therefore asserted that it should not be barred from filing its accurate returns for the tax period in question and that it is apparent that the Respondent was acting outside the law in issuing the disputed assessments.

18. The Appellant prayed that this Tribunal would:a.Annul the objection decision.b.Allow the Appeal and order that the costs of the Appeal be awarded to the Appellant.

Respondent’s Case 19. The Respondent addressed the Appellant’s grounds of Appeal through its Statement of Facts dated and filed on 1st September, 2023 where it raised two issues for determination.

a.Whether the Respondent’s Assessments were justified and whether the claim for Input VAT for Kshs 11,809,291. 79 was properly disallowed. 20. The Respondent contended that it was not bound by the tax returns filed by the Appellant and that it may assess a taxpayer’s tax liability using any information available to it as provided for under Section 24(2) of the TPA. Further that it is also empowered to amend returns under Section 31 of the TPA based on available information and to the best of the Commissioners judgement. It stated that in the instant case, it raised additional/default assessments to charge VAT on purchases claimed by the Appellant’s customers without corresponding sales declarations. Further, that the Appellant was a VAT non-filer from May 2019 hence it issued a default assessment based on records available on i-Tax.

21. The Respondent averred that the Appellant filed VAT returns for the period January to May 2018 through the i-Tax platform claiming input tax, however it detected inconsistencies between the VAT invoices declared by the Appellant and those declared by its suppliers. It also noted that the Appellant was a PAYE non-filer from June 2019 and raised additional assessment following a compliance check for various periods.

22. The Respondent asserted that it issued VAT assessment but only for those invoices which were inconsistent and in instances where no supporting documents were availed by the Appellant. It asserted further that although the Appellant had stated that it provided the requested documents vide its email dated 4th May, 2023, it contended that what was provided were schedules of the input VAT claimed but in the absence of actual supporting documents.

23. It was the Respondent’s assertion that Section 17(2) and (3) of the VAT Act instructively provided for input VAT to be disallowed where there is no production of original invoices or certified copies. As such the Appellant herein did not discharge its burden of proof as far as Section 17 of the VAT Act was concerned. The Respondent asserted that the Appellant provided purchase invoices for input tax deductions, however, the Appellant did not provide proof of payments, supplier confirmation and delivery notes on the subject invoices to prove that indeed they had been incurred.

24. The Respondent noted that from the i-Tax system most suppliers had not declared the specific invoices presented for consideration as sales in their self-assessment VAT return for the subject period. Further that the invoices availed were beyond 6 months from the invoice dates hence did not qualify for deductibility pursuant to Section 17 of the VAT Act which expected the Appellant to either avail the requisite documentation or alternatively the suppliers ought to have made declarations of the sales invoice in a return. It contended that in this case the Appellant did not comply with the above provisions of the law by failing to avail the relevant invoices for the period under review to enable the Respondent examine them in order to ascertain the allowable input VAT. It stated therefore that in the absence of supporting documents, it was justified in disallowing the unsupported input VAT.

(b)Whether the Additional Assessment for PAYE was merited and whether the Appellant has discharged their Burden of Proof to warrant the vacation of this Assessment. 25. On the issue of PAYE, the Respondent averred that the Appellant did not provide any primary record/or explanation in support of its objection for PAYE hence the Respondent upheld the assessments as the Appellant failed to comply with the provisions of Section 51(3) of the TPA which required that at the time of lodging an objection, a taxpayer ought to attach all the relevant documents relied upon.

26. The Respondent asserted that it was now established in law to provide documents whenever required to do so by the Respondent. Further that Section 23(1)(a) of the TPA provides that a taxpayer is required to keep documents or records in such a manner that the taxpayer’s tax liability can be readily ascertained. It averred that the Appellant’s failure to produce the requested relevant invoices to determine the input tax was contrary to the relevant statutes hence its assessments and objection decision were therefore in compliance with the laws.

27. It was the Respondent’s averment that the burden of proof is on the Appellant to demonstrate that the decision of the Respondent was wrong as per Section 56(1) of the TPA, and that based on the foregoing the Appellant utterly failed to discharge its burden of proof and in the circumstances, the instant Appeal was unmerited and ought to be dismissed with costs.

28. The Respondent prayed that the Tribunal do find the following:a.That the Appeal be dismissed with costs to the Respondent as the same was devoid of merit; andb.That the objection decision dated 23rd June 2023 be upheld.

Parties’ Submissions 29. The Appellant’s written submissions dated and filed on 12th March 2024 raised a single issue for determination as hereunder:

Whether the Appellant should be permitted to claim tax inputs for the Assessed period. 30. It was the Appellant’s submission that it was explicitly clear that the right to deduct input tax was an integral part of the VAT scheme that allows a taxable person who makes transactions in respect of which VAT is deductible to deduct the VAT in respect of goods and services acquired by them provided that such goods and services have a direct and immediate link with the output transactions in respect of which VAT was deductible.

31. The Appellant submitted that it opposed the Respondent’s assertion that the Appellant did not qualify to claim input tax in the assessed period as it was based on erroneous and immaterial consideration, specifically, that the Respondent relied on the allegation that majority of the suppliers had not declared the specific invoices presented for consideration as sales in their self-assessment VAT returns. It submitted further that the Respondent relied on this position regardless of the fact that the Appellant was in possession of the requisite documentation supporting deduction of the input as a fulfilment at Section 17(1) of the VAT Act.

32. The Appellant contended that at the time when the VAT input was incurred. it was duly registered and that the supplies were used for the purpose of making taxable supplies and that its purchases of inputs were made in furtherance of its taxable business for that period. It therefore asserted that input VAT can be claimed by any registered person for supplies acquired for the purpose of making taxable supplies.

33. It reiterated that the right to deduct input tax was an integral part of the VAT scheme that allows a taxable person who makes transactions in respect of which VAT is deductible to deduct the VAT in respect of goods and services acquired by him provided that such goods and services have a direct and immediate link with the output transaction in respect of which VAT is deductible.

34. It submitted that the Respondent’s decision to disallow recovery of input VAT incurred by the Appellant implied that that there were no transactions made by the Appellant in furtherance of its taxable business for the period February 2018 to July 2022 and denied it the right to deduct input VAT.

35. The Appellant submitted further that the Respondent misinterpreted Section 17(2) of the VAT Act to imply that when a taxpayer files its VAT return late, the return should not reflect the taxpayers actual VAT transactions that would have been reflected if the VAT return had been submitted on time. It was the Appellant’s argument that this interpretation infringes on the Appellants right to file accurate VAT returns that include the input VAT incurred in the tax period in question and that most importantly, this interpretation is not supported by the provisions of the VAT Act and that tax laws ought to be interpreted strictly and should not be interpreted with considerations to intendment.

36. The Appellant argued that late filing of returns should not prevent a registered taxpayer from claiming input tax expenses as there is no express legal provision that grants the Respondent discretion to deny a taxpayer the right to claim input tax on the ground of non-filing .It therefore contended that if the Respondent’s decision is allowed, it would imply that input tax claimable should be based not on the tax period that the return relates to but on the date the return is submitted, leading to an absurdity.

37. The Appellant cited the cases earlier relied on in its case and submitted that it should not be barred from filing its accurate returns for the tax period in question. It submitted in conclusion that the Respondent acted outside the law in issuing the disputed assessments.

38. The Respondent’s Written Submissions dated 22nd February 2024 and filed on 7th March, 2024 were a rehash of their its Statement of Facts dated and filed on 1st September 2023:

(a)Whether the Respondent’s Assessments were justified and whether the claim for input VAT for Kshs 11,809,291. 79 was properly disallowed. 39. The Respondent submitted that the dispute arose from inconsistencies detected between the invoices declared by the Appellant and those declared by its suppliers when the Appellant made an application through the i-Tax platform claiming input VAT. That despite being given sufficient time, the Appellant failed, refused and /or neglected to explain the identified variances hence the issuance of the demand notice dated 14th March, 2023 for Kshs 11,809,369. 89 inclusive of VAT and PAYE.

40. The Respondent submitted that Section 24(2) of the TPA empowers it to determine a taxpayer’s tax liability using any available information and that Section 31 of the TPA also grants it authority to revise tax returns using available information and its best judgement. It argued that it issued additional or default assessments wherein VAT was charged on purchases that the Appellant’s customers had claimed without corresponding sales declaration. Further that it also observed that the Appellant did not file VAT returns from May 2019 hence the issuance of default assessments based on the Appellant’s customers internal records which were available on i-Tax. The Respondent stated that it also discovered that the Appellant did not file PAYE returns from June 2019 onwards an issue that the Appellant has not controverted.

41. It was the Respondent’s submission that it issued VAT assessment for only the invoices that were inconsistent and in cases where the Appellant did not provide supporting documents. Further, that by this own admission under paragraph 39 of its Statement of Facts, the Appellant stated that the returns submitted to the Respondent did not reflect the true status of its accounts.

42. The Respondent submitted that the Appellant had claimed that it had submitted the requested documents via its email dated 4th May, 2023, however, the Respondent argued that the documents provided were schedules of the input VAT claimed, and did not include actual supporting documents such as proof of payment, supplier confirmation and delivery notes.

43. The Respondent relied on Section 17(1) and (2) of the VAT Act on the issue of deduction of input VAT and the type of documents to be submitted when applying for input VAT and submitted that the Appellant submitted purchase invoices which were beyond six months and did not qualify for deductibility pursuant to Section 17 of the VAT Act and also failed to provide proof of payments, supplier confirmation or delivery notes for these invoices to demonstrate that the expenses were actually incurred.

44. It was the Respondent’s submission that in the absence of such documents from the Appellant and noting most suppliers had not declared the specific invoices presented for consideration as sales in their self-assessment VAT returns for the relevant periods, it was constrained to disallow the same.

45. The Respondent relied on the case of Commissioner of Domestic Taxes vs Priyguru Company Limited (Income Tax Appeal No.085 of 2020) (2021) KEHC132; where the learned judge restated the duty to provide invoices and other documents as condition precedent for allowing input VAT deductions stating that:“There was a genuine expectation that if a reasonable businessman, the Respondent must have had the custody of all transactions details concerning the trade relations between it and its suppliers.”

46. The Respondent submitted that the Appellant ought to have had the records of all its transaction and hand them over to the Respondent for review as per Section 43 of the VAT Act and that the Appellant also did not provide the invoices within the required period of six months which would have satisfied the Respondent to allow input VAT. The Respondent stated that although the Appellant has attached some invoices with its Appeal document, it averred that it did not have an opportunity to review all the invoices during the review of the objection.

(b) Whether the Additional Assessment for PAYE was merited and whether the Appellant has discharged their Burden of Proof to warrant the vacation of this Assessment. 47. The Respondent submitted that the Appellant failed to provide any primary record and/or explanation in support of their objections for PAYE and that in the circumstances, the Respondent was constrained to uphold the assessment. Further that the Appellant failed to comply with the provisions of Section 51(3)(c) of the TPA which requires that at the time of lodging an objection, a taxpayer ought to attach all the relevant documents relied upon. It submitted further that the documents that the Appellant was required to provide were expected to be in its possession pursuant to Section 23(1) of the TPA and Section 43(2) of the VAT Act.

48. It was the Respondent’s submission that the absence of documents from the Appellant challenging the PAYE assessment means that the assessment ought to be upheld. Further that the burden of proof rests on the Appellant to show that the decision of the Respondent was incorrect as stipulated in Section 56(1) of the TPA.

49. The Respondent relied on the case of Commissioner of Domestic Taxes vs Galaxy Tools Limited (2021) eKLR where the Court quoted the case of Metcash Trading Limited vs Commissioner for South African Revenue Service and Another (as CCT3/2000 and stated the following on the burden of proof:“But the burden of proving the Commissioner wrong then rests on the vendor under section 37. Because VAT is inherently a system of self-assessment based on a vendor’s own records, it is obvious that the incidence of this onus can have a decisive effect on the outcome of an objection or appeal. Unlike income tax where assessments can elicit genuine differences of opinion about accounting practice, legal interpretations or the like, in the case of VAT assessment there must invariably have been an adverse credibility funding by the Commissioner and by like token such as finding would usually have entailed a rejection of the truth of the vendors records, returns and averments relating thereto. Consequently, the discharge of the onus is a most formidable hurdle facing a VAT vendor who is aggrieved by an assessment unless the Commissioner’s precipitating credibility finding can be shown to be wrong, the consequences assessment must stand.”

50. The Respondent submitted in conclusion that the Appellant failed to produce original tax invoices as required by Section 17(2) and (3) of the VAT Act. Further that proof of payment was not provided and neither were satisfactory explanations provided for the identified inconsistencies.

Issues for Determination 51. The Tribunal has considered the parties pleadings, documentation and submissions and is of the view that this Appeal raises a single issue for determination.

SUBDIVISION - Whether the objection decision dated 23rd June, 2023 was justified

Analysis And Findings 52. Having found that there was a single issue for determination, the Tribunal will proceed to analyse it as follows:

Whether the objection decision dated 23rd June, 2023 was justified 53. The Additional assessments arose from issues with Input VAT and PAYE and whether the Appellants input VAT claim was justified. On the issue of VAT, the Respondent had claimed that it had detected some inconsistencies between the invoices declared by the Appellant and those declared by its suppliers and further that the Appellant was a VAT non -filer from May 2019.

54. Section 17(1)(2)(3)(a) of the VAT Act is instructive and guides on what is required to be done to obtain the desired outcomes in matters of claim of input VAT. It provides as follows:“17(I)Subject to the provisions of this Act and the regulations, input tax on a taxable supply to or importation made by a registered person may at the end of the tax period in which the supply or importation occurred be deducted by the registered person in a return, be deducted by the registered person in a return for the period , subject to the exceptions provided under this section, from the tax payable by the person on supplies by him in that tax period, but only to the extent that the supply or importation was acquired to make taxable supplies.(2)If at the time when a deduction for input tax would otherwise be allowable under subsection (1)-a.the person does not hold the documentation referred to in subsection (3) orb.the registered supplier has not declared the sales invoice in a return, the deduction for input tax shall not be allowed until the first tax period in which the person holds such documentation.Provided that the input tax shall be allowable for a deduction within six months after the end of the tax period in which the supply or importation occurred(3)(a)The documentation for the purposes of subsection (2) shall be –a.An original tax invoice issued for the supply or a certified copy”.

55. The Tribunal notes that when requested to provide supporting documents, the Appellant provided schedules of the input VAT claimed without supporting documents. As the owner of the business, the Appellant maintains absolute custody of its documents which it ought to have provided in order to discharge its burden of proof.

56. The Tribunal relies on its holding in the case of Heet Enterprises vs Commissioner of Investigations and Enforcement TAT No 230 of 2018(2021) eKLR where it as follows:“The right to claim input VAT is premised on the assumption that the taxpayer paid VAT during the purchase of their suppliers. Section 17(3)(a) of the Value Added Tax 2013 further provides that in order to claim input VAT, the relevant documents to be provided are the original tax invoice or a certified copy of the same”.

57. The Tribunal further notes that apart from not availing the documents required, some of the purchase invoices the Appellant provided were beyond six (6) months contrary to Section 17 of the VAT Act. It is the Tribunal’s considered view that the Appellant could have discharged its burden of proof by availing such information and documents to prove that it made payments for its purchases or would have sought for its supplier’s confirmation that indeed purchases were made.

58. The Tribunal further relies on its decision in MechaiInternational vs Commissioner of Domestic Taxes, TAT No 38 of 2021 where it stated as follows:“… In our humble view, this obligation on the taxpayer is tied to and must be viewed through the taxpayer’s obligation of proving that the Commissioner’s assessment is wrong, incorrect or excessive. As such, the only way of dispensing with the legal burden of proof on the Appellant under section 56(I) of the TPA is through production of evidentiary record to proof that the Commissioner erred in his assessment. This burden is particularly heightened when a request is made by the Commissioner for documents in support of an objection notice.”

59. It is worth noting that the Appellant was a non-filer for VAT and PAYE from 2019, a fact it has not controverted, and by its own admission that some of the returns it filed may not have been accurate and therefore sought time to amend them. Section 29(1)(b) and 31(1)(b) of the TPA empowers the Respondent to issue a default assessment or an amended assessment in instances where the taxpayer’s returns have not been filed or the information is not accurate. The Sections provide as follows:“29(1)(b)Where a taxpayer has failed to submit a tax return for a reporting period in accordance with the provisions of a tax law, the Commissioner may, based on such information as may be available and to the best of his or her judgement, make an assessment (referred to as a ‘default assessment’) of –b)The amount of the excess in the case of input tax carried forward under the Value Added Tax Act (Cap 476), for the period”“31(1)(b)Subject to this Section, the Commissioner may amend an assessment (referred to in this section as the original assessment) by making alterations or additions, from the available information and to the best of the Commissioners judgement, to the original assessment of a taxpayer for a reporting period to ensure that -b)In the case of an excess amount of input tax under the Value Added Tax Cap 476) the taxpayer is assessed in respect of the correct amount of the excess input tax carried forward for the reporting period…”

60. The Tribunal relies on the case of Tumaini Distributors Company(K) Limited vs Commissioner of Domestic Taxes (2020) eKLR where the High Court stated as follows:“The Commissioner clearly explained that it based its decision on the statement of accounts and returns the company had filed. The Tribunal appreciated this fact when it concluded that it was the duty of the company to provide all documents and that the Commissioner was entitled to rely on the self-assessment and returns lodged by the company in the absence of any other documents”

61. The Tribunal notes that the Appellant has attached copies of invoices with its Appeal. However, the Appellant did not explain whether it availed the documents to the Respondent but the Respondent failed to consider them. The Appellant also did not explain, in its pleadings, why the invoices were not availed during the objection stage. In the circumstances, the Tribunal is unable to pronounce itself on the said invoices.

62. It is the observation of the Tribunal that the Appellant in this case not only failed to avail supporting documentation to prove its case, but in some instances even failed to file its returns yet it was a registered taxpayer. In the circumstances, the Respondent can hardly be faulted for issuing the demand for taxes from the Appellant.

63. In view of the foregoing, the Tribunal finds that the objection decision by the Respondent dated 23rd June, 2023 was justified.

Final Decision 64. The upshot of the above is that the Appeal lacks merit and therefore fails. The Tribunal will therefore proceed to issue the following final Orders:a.The Appeal be and is hereby dismissed.b.The Respondent’s objection decision dated 23rd June 2023 be and is hereby upheld.c.Each party to bear its own costs.

65. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 12TH DAY OF JULY 2024. CHRISTINE A. MUGACHAIRPERSONBONIFACE K. TERER DELILAH K. NGALAMEMBER MEMBEROLOLCHIKE S. SPENCERMEMBER