https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/319

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO E1213 OF 2025** **CEDAR MARKETING AND COMMUNICATIONS LIMITED ....................... APPELLANT** **VERSUS** **COMMISSIONER OF DOMESTIC TAXES ……………………………........ RESPONDENT** **JUDGEMENT** **BACKGROUND** 1. The Appellant is a limited liability company that deals in construction. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, 1995 Cap 469 Laws of Kenya. Under Section 5(1), the Respondent is an agency of the Government for the collection and receipt of all 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& 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 raised a VAT additional assessment on 30th August 2022 for Kshs 1,300,136.16 being principal tax. 4. The Appellant objected to the assessment on 23rd September 2022 after which the Respondent issued its Objection Decision dated 22nd October 2022. 5. Aggrieved by the Respondent’s decision, the Appellant filed its Notice of Appeal dated 28th October 2025 on 29th October 2025 **THE APPEAL** 1. The Appeal is premised on the following grounds of appeal as stated in the Appellant’s Memorandum of Appeal dated 28th October, 2025 and filed on 29th October, 2025. 1. The Respondent disallowed expenses incurred which we shared purchases invoices. 2. Based by nature of our business we pay for job done in small amounts that we accumulate one payment based on location then we get one purchase invoice to offset the small payment made. **THE APPELLANT’S CASE** 1. The Appellant’s case is premised on its: 1. Statement of Facts dated 28th October 2025 and filed on 29th October 2025 together with the documentation attached thereto. 2. Written submissions dated and filed on 15th June 2026. 2. The Appellant stated that the additional assessment was brought about when the Respondent disallowed the purchases incurred. It contended that the tax charged was punitive and unfair since the Respondent assumed the Appellant did not incur any cost during our normal operations. It argued that the additional assessment was not considerate since no business can operate without incurring costs. 3. The Appellant reiterated that the Respondent disallowed expenses incurred even after the Appellant availed purchases invoices incurred in June 2022 amounting to Kshs 8,125,851.00 with VAT amount of Kshs 1,300,136.00. 4. It reiterated further that based on the nature of its business, it pays for jobs done in small amounts then accumulates one payment based on location then get one purchase invoice to offset the small payment made. It stated that this payment was done through M-pesa and cash due to the nature of its suppliers. **THE APPELLANT’S PRAYERS** 1. The Appellant prayed that: - 1. The Objection Decision of the Respondent contained in the letter dated 22nd October 2022 be annulled and set aside in its entirety; 2. The appeal be allowed with costs to the Appellant; and 3. Any other orders that the Honourable Tribunal may deem fit. **THE RESPONDENTS CASE** 1. The Respondent’s case is premised on its; 1. Statement of Facts dated 27th November 2025 and filed on 28th November 2025 together with the documentation attached thereto. 2. Written submission dated 12th June 2026 and filed on 16th June 2026. 2. The Respondent asserted that it issued a demand for additional assessment on 30th August 2022 which the Appellant objected to on 23rd September 2022 after which the Respondent issued the Objection Decision on 22nd October 2022. However, the Appellant filed its Notice of Appeal dated 28th October 2025 on 29th October 2025. 3. The Respondent asserted that it disallowed inputs from suppliers who had not been declaring corresponding sales invoices in their VAT returns and that the Appellant only availed purchase invoices and ETR receipts from Benson Mulinge for review and failed to provide any delivery notes and proof of payments as required by Section 43(1)-(3) of the VAT Act 2015. As a consequence, it disallowed the input VAT claims under Section 16 of the VAT Act. 4. It averred that all actions were taken in accordance with the provisions of the Tax Procedures Act 2015, the VAT Act and related regulations. It averred further that the Appellant was granted an opportunity to respond and object to the assessment in line with due process. It maintained that the tax assessment issued was properly founded in fact and law, and that the objection decision was fair, reasonable and made in accordance with statutory provisions. 5. In its written submissions, the Respondent submitted on two issues; 1. **Whether the Appeal is properly before this Tribunal** 6. The Respondent submitted that the Appellant failed to comply with the provisions of Section 13 of the Tax Appeals Tribunal (TAT)Act and Rules 3 and 4 of the Tax Appeals Tribunal (Procedure) Rules 2015 in that the Appellant was issued with the Objection Decision on 22nd October 2022 and ought to have filed its Notice of Appeal by 22nd November 2022. It stated that the Appellant however filed its Notice of Appeal on 29th October 2025 which was almost three (3) year later and without seeking leave of the Tribunal to file an appeal out of time as per Section 13(3) of the Tax Appeals Tribunal Act. 7. It was therefore its position that the appeal was improperly before the Tribunal and ought to be dismissed. It relied on the Tribunal’s holding in **TAT No. E1197 of 2025 Cedar Marketing and Communication Limited vs Kenya Revenue Authority** where it was held; - *“The Tribunal finds that its jurisdiction was not properly invoked by the Appellant who failed to lodge the Appeal within the prescribed timelines, and who failed to seek leave from this Tribunal to file the Appeal out of time thus this appeal in incompetent and untenable in law”* **b) Whether the Respondent was right in confirming VAT and Income Tax Company assessments of Kshs 1,300,136.00** 1. The Respondent submitted that it is empowered under Sections 24(2) and 31 (1) of the Tax Procedures Act to issue additional assessments. It submitted further that it issued the Appellant with Value Added Tax Assessment on 30th August 2022 and that the Appellant objected on 23rd September 2022 without stating any grounds of objection, and only attached purchase invoices. It stated that the Appellant failed to provide any delivery notes and proof of payments which was contrary to Section 43(1)-(3) of the Value Added Tax Act. It therefore proceeded to confirm the assessment of Kshs 1,300,136.00 2. The Respondent submitted that the Appellant failed to discharge its evidential burden of proof as prescribed under Section 56(1) of the Tax Procedures Act and Section 107(1) of the Evidence Act in demonstrating that the assessment by the Respondent was in any reasonable manner incorrect or excessive 3. The Respondent submitted that although the law recognizes the self-assessment regime, it is empowered by Section 31 of the Tax Procedures Act to amend such assessments based on available information. It stated that it exercised its best judgement appropriately in the circumstances thereby arriving at the tax assessment it did. 4. The Respondent relied on the cases of **Nairobi TAT No.25 of 2016 Family Signature Limited vs The Commissioner of Investigations & Enforcement and TAT No.28 of 2018-Joycott General Contractors Limited vs Kenya Revenue Authority** **THE RESPONDENT’S PRAYERS** 1. The Respondent prayed that the Tribunal: 1. Dismisses the appeal in its entirety 2. Upholds the tax assessment as confirmed by the objection decision; and 3. Orders the Appellant to pay the costs of the appeal. **ISSUES FOR DETERMINATION** 1. The Tribunal has considered the parties’ pleadings, documentation and submissions and is of the view that this appeal raises two issues for determination. 1. **Whether the Appeal is valid.** 2. **Whether the Respondent’s demand is justified** **ANALYSIS AND FINDINGS** 1. Having established the two issues for determination, the Tribunal will proceed to analyse them as hereinunder. 1. **Whether the Appeal is valid.** 2. The Respondent had stated that this appeal was not properly before the Tribunal due to the Appellant’s failure to comply with the provisions of Section 13 of the Tax Appeals Tribunal Act and Rules 3 and 4 of the Tax Appeals Tribunal (Procedures) Rules 2015 having been filed outside the statutory timelines. 3. The Tribunal notes that Respondent issued the assessment order on 30th August 2022 which the Appellant objected to on 23rd September 2022. The Respondent subsequently issued the Objection Decision on 22nd October 2022. However, the Appellant filed its Notice of Appeal dated 28th October 2025 on 29th October 2025. 4. A reading of Section 13(1) of the Tax Appeals Tribunal provides the manner of commencing an Appeal before the Tribunal, in that the Appeal shall be lodged within thirty (30) days of the date of making of the Objection Decision, by way of a Notice of Appeal. Section 13(1) of the Tax Appeals Tribunal Act provides as follows; - *“(1) A notice of appeal to the Tribunal shall-* *a) Be in writing* *b) Be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner.* 1. Further Section 51(12) of the Tax Procedures Act also prescribes the timelines within which a taxpayer who is dissatisfied with a Commissioner’s decision may prefer an appeal to the Tribunal. It provides as follows; *“A person who is dissatisfied with the decision of the Commissioner under subsection (II) may appeal to the Tribunal within thirty days after being notified of the decision”* 1. From the documentation availed, the Respondent’s Objection Decision was issued on 22nd October, 2022 and the Appellant ought to have filed the Notice of Appeal by 22nd November, 2022.However the Appellant’s Notice of Appeal was filed on 29th October, 2025 which was three years, seven days late and without leave of the Tribunal. 2. It is worth pointing out that Section 13(3) of the Tax Appeals Tribunal offers a reprieve to a taxpayer to invoke the Tribunal’s discretion to be allowed to file the Notice of Appeal and other Appeal documents out of time. In this case however, the Appellant failed to take advantage of this provision and proceeded to file its Appeal way outside the statutory timelines. 3. The Appellant’s failure to seek enlargement of time strips this Tribunal with the jurisdiction to hear this matter as was affirmed in the case of *Owner’s of Motor Vessel “Lillian 5 vs Caltex (Kenya) Limited (1989) eKLR* where it was held that jurisdiction is everything for a court and that without jurisdiction, a court lacks the power to proceed and has to down its tools. 4. The Tribunal relies on the case of **Kariinya Mukiira vs Middle East Bank Limited (2018) eKLR** where it was stated: - *“That procedure in my view, is not there for no reason, it is there for parties to abide. The importance of following laid down procedure was considered in the case of* ***Moses Mwicigi*** *where the Supreme Court stated:* *“This court has on a number of occasions remarked upon the importance of rules of procedure in the conduct of litigation. In many cases, procedure is so closely intertwined with the substance of the case, that it benefits not the attribute of a mere technicality. The conventional wisdom indeed, is that procedure is the hand maiden of justice. Where a procedural motion bears the ingredients of just determination and yet it is overlooked by a litigant, the court would not hesitate to declare the attendant pleadings incompetent”* 1. As it is often stated “Equity aids the vigilant, not those who slumber on their rights”. The Appellant in this case ignored the statutes to its detriment and cannot therefore expect the Tribunal to entertain its appeal. 2. In view of the foregoing, the Tribunal finds that the Appeal is not valid having been filed outside the statutory timelines and without its leave to enlarge the time. 3. Having determined the incompetence of the appeal, the Tribunal will not delve into the second issue as the same has been rendered moot. **FINAL DECISION** 1. The upshot of the foregoing is that the appeal is incompetent and the Tribunal proceeds to issue the following orders 1. The Appeal be and is hereby struck out. 2. No orders as to costs. 2. Orders accordingly. **DATED and DELIVERED** at **NAIROBI** this 21st day of August 2026 **................................................................** **DR. ERICK KOMOLO** **CHAIRMAN** **……………………………. ……..............……………..** **ABDULLAHI M. DIRIYE CYNTHIA MAKAYA** **MEMBER MEMBER**