https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7599

Commissioner of Domestic Taxes v Pernod Ricard Kenya Ltd (Tax Appeal E179 of 2024) [2026] KEHC 7599 (KLR) (Commercial and Tax) (3 June 2026) (Judgment) Neutral citation: [2026] KEHC 7599 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Tax Appeal E179 of 2024 BK Njoroge, J June 3, 2026 Between Commissioner Of Domestic Taxes Appellant and Pernod Ricard Kenya Ltd Respondent (An Appeal arising from the Judgment of the Tax Appeals Tribunal decision delivered on 7th June, 2024.) Judgment 1.This is a decision on an Appeal arising from the Judgment of the Tax Appeals Tribunal. The Appellant challenged the decision of the Tribunal delivered on 7th June, 2024. It is on the issue of Tax refunds. Background Facts 2.The Appellant, being dissatisfied with the judgment of the Tax Appeals Tribunal dated 7th June, 2024, filed the Memorandum of Appeal dated 18th July, 2024. It appealed against part of the decision and the consequential Orders on the grounds; - 1.That the Honourable Tribunal erred in law in allowing the Respondent's refund application for the period July 2019 - June 2020, amounting to Ksh. 25,943,338.00 and for the period July 2020 - June 2021, amounting to Ksh. 3,458,632.00 on an erroneous basis that the Appellant issued a refund decision outside the required timelines stipulated by section 47(3) of the TPA. 2.That the Honourable Tribunal erred in law in allowing the Respondent's refund application for the period July 2019 - June 2020, amounting to Ksh. 25,943,338.00 and for the period July 2020 - June 2021, amounting to Ksh. 3,458,632.00 on an erroneous basis that the Appellant issued a refund decision outside the required timelines, despite the Appellant having adduced evidence to the contrary. 3.That in finding that the refund decision to the Respondent's refund application for the period July 2019 - June 2020, amounting to Ksh. 25,943,338.00 and for the period July 2020 - June 2021, amounting to Ksh. 3,458,632.00 was made outside the required timelines, the Tribunal erred in law and fact as its finding failed to consider the Appellant's uncontroverted evidence in its statement of facts and submissions. 4.That the Tribunal erred in law by failing to find that the Respondent's appeal before it was irregular and fatally defective, as no notice of appeal was filed contesting the Appellant's decision dated 6th April 2023, as stated in the Respondent's memorandum of appeal before the Tribunal. 5.That the Tribunal erred in law by failing to find that the Respondent's appeal before it was irregular and fatally defective, as no notice of appeal was filed contesting the Appellant's decision dated 6th April 2023, despite the Respondent having admitted to a defective Notice of Appeal. 6.That the Tribunal erred in law in failing to find that the Respondent failed to discharge its burden of proof to demonstrate that the refunds were due and payable. 7.That the Honourable Tribunal misapplied the law and facts and therefore arrived at the wrong decision. 3.The Appellant prayed for the following orders:(a)The Appeal be allowed with costs to the Appellant.(b)The consequential findings and orders of the Tribunal subject to this appeal be set aside in its entirety. 4.Vide the Statement of Facts dated 18th November, 2024, the Respondent stated that the Appellant’s appeal is fundamentally defective and ought to be dismissed. Its claim that no Notice of Appeal was lodged is both a misapprehension of fact and law. It is also improperly raised for the first time on appeal, thereby denying the Respondent the opportunity to address it at the Tribunal. Notably, the Appellant’s Preliminary Objection before the Tribunal was limited to timeliness and did not contest the existence of a Notice of Appeal. In any event, the Notice of Appeal dated 22nd June, 2023 clearly challenged all decisions communicated on 23rd May, 2023, including the impugned decision. Further, the alleged decision of 6th April, 2023 was a nullity ab initio, having been issued outside statutory timelines and without jurisdiction. It thus required no formal appeal to be set aside. 5.Additionally, the Appellant’s challenge to the Tribunal’s finding on the refund claim is without merit. The Respondent lodged its application on 6th December, 2022. Yet, the Appellant rendered its decision on 6th April, 2023 and communicated it on 23rd May, 2023. This is well beyond the 90-day statutory period under Section 47(2) of the Tax Procedures Act. Consequently, the Tribunal correctly held that the refund was deemed allowed by operation of law. The Respondent also discharged its burden of proof by demonstrating that the Appellant’s decision was time-barred. Thus, justifying the Tribunal’s conclusion that the refund amounts were validly due and payable. Issues for determination 6.The Court has carefully considered the Memorandum of Appeal, the Record of Appeal, the response, the written submissions, as well as the oral highlights by Counsel for the parties. The Court frames a single issue for determination as follows;a)Whether the Appeal is merited. Analysis 7.It was the Appellant’s case that a refund decision was duly made on 1st March, 2023. This is as evidenced at page 26 of its Further Supplementary Record of Appeal filed on 9th October, 2024 and page 25 of its Supplementary Record dated 17th September, 2024. The decision, communicated via email to the Respondent’s agent, PwC (David Otieno), by a KRA officer, clearly rejected the refund claim for the periods July 2019–June 2020 and July 2020–June 2021, based on an outstanding tax liability. It advised that the same be resolved with the relevant tax station before processing could proceed. This constituted a valid and timely decision within the 90-day statutory period under Section 47(3) of the Tax Procedures Act. The Appellant faults the Tribunal for disregarding this evidence, thereby occasioning an error warranting correction by the Court. 8.In contrast, the Respondent opined that the Appellant’s Grounds of Appeal impermissibly challenge the Tribunal’s conclusive findings of fact. Namely, that the Kenya Revenue Authority’s Refund Decision was issued on 23rd May, 2023 outside the statutory 90-day period. That PERNOD RICARD KENYA LTD’s Notice of Appeal was filed on 22nd June, 2023 within the prescribed timeline, as established in the Tribunal’s Judgment based on the evidentiary record. As the Tribunal is the trier of facts, such determinations are not subject to re-evaluation on appeal. Therefore, in the absence of any substantive question of law, the present appeal is incompetent and contrary to Section 56(2) of the Tax Procedures Act, and ought therefore to be dismissed with costs. 9.It is trite law that the jurisdiction of this Court while exercising its Appellate jurisdiction from the Tribunal is circumscribed by Section 56(2) of the Tax Procedures Act. It provides that an appeal to the High Court and the Court of Appeal shall be on a question of law only. The Section provides that;‘An appeal to the High Court or to the Court of Appeal shall be on a question of law only.’ 10.According to the Respondent, the Appellant acted in clear breach of Section 47(2) of the Tax Procedures Act. The Section obligates the Appellant to issue a refund decision within 90 days of receipt of a refund application. In this case, the Appellant failed to render any such decision within the prescribed period. Consequently, by operation of Section 47(3) of the Act, the refund application was deemed to have been duly ascertained and approved by law. Notwithstanding this statutory position, the Appellant, in an email dated 6th February 2023, purported to communicate with the Respondent despite having already fallen outside the mandatory timelines. 11.Section 47(2) of the Tax Procedures Act requires the Appellant to decide on refund applications in the following terms:“(2)The Commissioner shall ascertain and determine an application under subsection (1) within ninety days and where the Commissioner ascertains that there was an overpayment of tax—(a)in the case of an application under subsection (1)(a), apply the overpaid tax to such future tax liability; and(b)in the case of an application under subsection (1)(b), refund the overpaid tax within a period of two years from the date of the application.” 12.From its analysis of the facts, the Tribunal noted that the Appellant applied for an income tax refund claim on 6th December, 2022. This was in respect of the total amount of Kshs. 159.095.983.00 being (Kshs 71.707.170.00 for the year 2017 and Kshs 87.388.813.00 for the year of income 2015, 2016 and 2021). The Appellant herein responded vide its electronic mail on 23rd May, 2023 rejecting the application and enclosing the rejection order and confirmation of assessment notice for Kshs. 87.388.813.00 dated 6th April, 2023 and 71,987,540.00 dated 23rd May, 2023. 13.The Appellant argued that with respect to the Respondent's refund application dated 6th December, 2022 a decision in that respect was made on 1st March, 2023 rejecting the said refund claims with reasons. 14.Further, that the evidence of the decision dated 1st March, 2023 was in fact filed with the Tribunal and marked as KRA 8 Of the Respondent's statement of facts. 15.On this the Tribunal noted the Respondent's reference or averment that it had communicated to the Appellant on 1" March, 2023. However, the Appellant failed to adduce the said communication or correspondence in its pleadings. The Tribunal rendered itself as follows on this aspect;“The 90-day timeline ought to be assessed from the time the Appellant lodged the Appeal on 6th December, 2022 until the time the Respondent rejected the same on either 6th April, 2023, or 23rd May, 2023. The period between 6th December, 2022 and 6th April, 2023 is one hundred and forty-seven (147) days whilst the period between 6th December, 2022 and 23rd may, 2023 is one hundred and sixty-nice (169) days. In both instances the period within which the Respondent ought to have rendered its decision is outside the statutory timelines as envisaged under section 47(3) of the TPA. The Tribunal notes the Respondent’s reference or averment that it had communicated to the Appellant on 1st March, 2023. However, it failed to adduce the said communication or correspondence in its pleadings.” 16.Contrary to the Appellant’s assertion, as stated above herein, the Appellant had acknowledged that the Refund Decision was dated 6th April, 2023 and communicated on 23rd May, 2023. 17.Noting that the Respondent had no knowledge of the decision dated 1st March, 2023, it is questionable why the Appellant went ahead to acknowledge the decision dated 6th April, 2023 as opposed to 1st March, 2023. Was this an afterthought ploy by the Appellant? 18.Be as it may, the Court agrees with the finding of the Tribunal that the 90-day timeline ought to be assessed from the time the Appellant lodged the Appeal on 6th December, 2022. The time would then run until the time the Respondent rejected the same on either 6th April 2023, or 23rd May, 2023. The period between 6th December, 2022 and 6th April, 2023 is one hundred and forty-seven (147) days. On the other hand, the period between 6 December, 2022 and 23rd May, 2023 is one hundred and sixty-nine (169) days. In both instances the period within which the Appellant ought to have rendered its decision is outside the statutory timelines as envisaged under Section 47(3) of the Tax Procedures Act. The Section states as follows;“(3)Where the Commissioner fails to ascertain and determine an application under subsection (1) within ninety days, the same shall be deemed ascertained and approved.” 19.The Appeal is hereby dismissed and the Tribunal’s decision upheld. 20.As to costs, the same lie at the discretion of this Court. The fair order is that let each party bear its own costs of this Appeal. Determination 21.The Appellant’s appeal is hereby dismissed for lack of merits. 22.Each party to bear its own costs of the Appeal. 23.It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 03RD DAY OF JUNE, 2026.NJOROGE BENJAMIN K.JUDGEIn the presence of:Mr. Nyapara for the Appellant.Mr. Obegi for the Respondent.Mr. John Paul - Court Assistant.