https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/131

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO. E807 of 2025** **JASLEX LIMITED............................................................................................APPELLANT** VS **COMMISSIONER OF LEGAL SERVICES & BOARD CO-ORDINATION....... RESPONDENT** **JUDGMENT** BACKGROUND 1. The Appellant is a Limited Liability Company incorporated under the Companies Act whose principal business activity is Construction and Civil Engineering services. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws. Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws. 3. The Respondent issued the Appellant with VAT assessment orders dated 30th September 2024 for various periods between December 2019 and December 2024. The Respondent also issued Income tax assessment orders dated 1st October 2024 covering the years of 2019 to 2021. 4. The Appellant objected to the income tax assessments on 16th January 2025 and the VAT assessments on 17th January 2025. 5. On 30th January 2025, the Respondent issued a late objection rejection. 6. The Appellant also filed an objection decision dated 14th October 2022. 7. Dissatisfied with the Respondent’s Objection decision dated 14th October 2022 and the decision dated 30th January 2025, the Appellant with leave of the Tribunal filed the instant appeal on 24th July 2025. **THE APPEAL** 1. The Appellant lodged a memorandum of appeal dated 24th July 2025 on the grounds: 2. That the Respondent erred in law and in fact in demanding payment of Income tax amounting to Kshs. 15,617,132 vide an Agency Notice dated 15th July 2025, amounts which are erroneous and overstated. 3. That the Respondent erred in law and in fact in demanding payment of VAT amounting to Kshs 19,053,204 *vide* an Agency Notice dated 15th July 2025, amounts which are erroneous and overstated. 4. That the Respondent erred in law and in fact by rejecting the Taxpayer's application to file the objection out of time in spite of valid grounds that the Appellant was unable to access its emails. 5. That the Respondent erred in law and in fact by failing to grant the Appellant an opportunity to be heard contrary to the provisions of the Constitution and the Fair Administrative Actions Act. 6. That the Respondent erred in law and in fact in failing to take into consideration the documentation that the Appellant provided for review. **The Appellant’s Case** 1. In support of the appeal, the Appellant relied on its statement of facts dated 24th July 2025 and its written submissions dated 17th February 2026 and filed on even date. 2. The Appellant stated that in the year 2024, the assessing Commissioner conducted an audit on the Appellant and requested the for the following documents which documents were duly provided: 3. Sales and purchases ledgers 4. Breakdown of trade payables and receivables together with detailed ledgers for the period 5. End of period independent balance confirmation of payables and receivables by auditors 6. End of year stock take and detailed stock movement registers 7. Loan agreements, statements and Personal identification Numbers of shareholders who advanced loans together with transaction dates, amounts advances and payment schedules 8. Bank statements for all accounts maintained during the period. 9. The Appellant stated that on 30th September 2024, the Respondent issued the Appellant with an additional VAT assessment related to the months of December 2019, 2022 and 2023 amounting to Kshs. 670,169.76, Kshs 1,552,957.33 and Kshs.639,952.36 respectively. 10. It stated that on 1st October 2024, the Respondent issued the Appellant with additional income tax assessments relating to the period 2019, 2020 and 2021 amounting to Kshs. 170,514.33, Kshs. 798,159.45 and Kshs. 15,136,822.09 respectively. 11. The Respondent also issued the Appellant with an additional VAT assessment related to the month of July 2022 amounting to Kshs. 911,658. 12. It stated that on 17th January 2025, the Appellant objected to the VAT additional assessment relating to the period December 2020, December 2022 and December 2023. 13. The Appellant contended that on 12th February 2025, the Respondent issued the Appellant with an additional VAT assessment related to the month of December 2025 amounting to Kshs. 10,300,010.32. 14. The Appellant stated that on 16th September 2022, it objected to the VAT assessment amounting to Kshs. 911,658 for the period July 2022. While on 16th January 2025, the Appellant objected to the Income tax assessments relating to the period 2019, 2020 and 2021. 15. It stated that on 17th January 2025, it objected to the VAT assessments relating to the period December 2020, December 2022 and December 2023. 16. According to the Appellant, on 14th October 2022, the Respondent issued an objection decision relating to additional VAT assessment for the period July 2022. 17. It stated that on 30th January 2025, the Respondent issued a decision rejecting the Appellant application for extension of time to file late objections to the additional assessments relating to VAT and Income tax on the basis that it had taken an inordinately long time to lodge the objections without reasonable cause. 18. The Appellant pointed out that on the 15th July 2025, the Appellant received notification of an Agency Notice that had been issued to its bank, Equity Bank Limited appointing it as an agent to aid in the collection of taxes that were due amounting to Kshs. 34,670,336 relating to Income tax and VAT. 19. It stated that it was only after the Agency Notice was issued that the Appellant established that an objection decision had been issued on 14th October 2022 and 30th January 2025 therefore, it lodged the appeal. 20. The Appellant contended that the Respondent in the Agency Notice demanded payment of all the amounts as contained therein without according the Appellant an opportunity to be heard which was a total disregard of the law, un procedural and unfair. 21. The Taxpayer expressed intent to file an appeal out of time against the objection decision that was issued by the Respondent on 14th October 2022 and the decision of 30th January 2025 rejecting the application for a late objection. It stated that the appeal was not filed within the stipulated time due to the fact that the Respondent was communicating with the Appellant using an email address that is no longer in use by the Appellant. 22. It asserted that it managed to obtain professional advice on the agency notice issued, however, time within which to file an appeal as provided by law had already lapsed. 23. The Appellant submitted that the Income Tax and VAT assessments were erroneous and overstated; that the Respondent erred in rejecting the Appellant's application to lodge an objection out of time and that the Respondent violated the Appellant's right to fair administrative action. 24. The Appellant submitted that the Respondent failed to consider relevant documentation prior to issuing the assessments. It also submitted that the Agency Notice was premature and unlawful. 25. The Appellant cited the case of **Republic v Kenya Revenue Authority ExParte Lab International Kenya Limited [2020] eKLR,** where the High Court held that tax assessments must not be arbitrary and must be based on material evidence. 26. It also cited the case of **Republic v Kenya Revenue Authority Ex Parte M-Kopa Kenya Limited (2018] eKLR**, where the Court emphasized that statutory discretion must be exercised reasonably and not capriciously. 27. It relied on the case of **Judicial Service Commission v Mbalu Mutava & Another [2015] eKLR**, wherein the Court of Appeal held that Article 47 constitutionalizes the right to fair administrative action. 28. It relied on the case of **Republic v Kenya Revenue Authority Ex Parte Yaya Towers Limited [2008] eKLR** where the Court held that failure to consider relevant matters renders a decision unreasonable and subject to being quashed. **Appellant’s prayers** 1. The Appellant prayed for the following reliefs 2. This appeal be allowed 3. The objection decision dated 14th October 2022 and 30th January 2025 be set aside in its entirety. 4. The agency notice dated 15th July 2025 be set aside in its entirety. 5. Any other orders that the Tax Appeals Tribunal may deem fit. 6. The costs be in the cause. **THE RESPONDENT’S CASE** 1. In response to the appeal, the Respondent relied on its Statement of facts dated 7th October 2025 and filed on 8th October 2025. The Respondent also placed reliance on its written submissions dated 26th March 2026 and filed on 27th March 2026. 2. The Respondent averred that upon review of the period between 2019 to 2023, it established that the taxable sales compared to the declared returns were at a variance, and that the Appellant made taxable supplies to clients who are withholding agents but the Appellant did not declare income tax or VAT. 3. In addition, the Respondent stated that the Appellant had made duplicate claims for the period amounting to Kshs 2,621,447. Consequently, The Appellant was then served with the demand for taxes on 23rd September 2024 and additional assessments on 30th September 2024 and 1st October 2024. 4. The Respondent stated that the Appellant failed to object as guided in section 51 (2), (3) and (7) of the TPA the Respondent rejected the late objection application on 30th January 2025. 5. The Respondent averred that the Appellant has the duty to establish which section of the Respondent’s analysis did not give a true reflection of the tax position. 6. In response to paragraph 43 of the statement of facts, the Respondent relied on Section 31(4) of the TPA which provides that: *"(4) The Commissioner may amend an assessment- (a) in the case of gross or wilful neglect, evasion, or fraud by, or on behalf of, the taxpayer, at any time."* 1. The Respondent argued that the Appellant did not provide documents under as provided under Section 17(3) of the Value Added Tax Act (Cap 476) (VATA). 2. According to the Respondent, the law has provided mandatory requirements for the Appellant to keep records under Section 17(3) and Section 43 of the VAT Act. The Respondent further averred that it did nor err in law or fact in confirming the VAT Tax Assessments due to lack of supporting documentation. 3. The Respondent stated that it is empowered by Section 31(1) (b) and Section 29 of the TPA to amend the assessment based on the information available to it and to the best of its judgement. 4. The Respondent stated that it is allowed by Section 24(2) of the PTA to assess a taxpayer's liability using any information available to him. To this extent, the Respondent asserted that it operated within the confines of the law by using the data available following a return review. 5. The Respondent averred that the Appellant’s objection was rejected pursuant to Section 51(3) of the TPA on the basis that the Appellant failed to support its objection by providing all the relevant documents relating to the objection. 6. The Respondent contended that it was guided by the foregoing laws which are in line with Article 57 of the Constitution of Kenya. The Respondent also relied on the case of **Commissioner of Domestic Services v Galaxy Tools Limited [2021] eKLR** where the Court noted that: - *"...the tax Laws reverse the well-known principle of evidence of "he who alleges must proof". In this regard, the tax authorities would assess what it considers to be the tax due from a taxpayer and the tax laws would burden the tax payer to disprove that the assessment or tax demanded is wrong or incorrect."* 1. The Respondent stated that the Appellant failed to comply with Section 51(3) of the TPA which left the Respondent with no choice than to reject the Appellant's objection application. 2. It stated that it was guided by Section 56(1) of the TPA which provides that *"in any proceedings under this Part, the burden shall be on the taxpayer to prove that a tax decision is incorrect."* 3. The Respondent submitted that additional assessments were justified; and that the Objection decision was proper. It cited the case of **Commissioner of Domestic Taxes v Altech Stream (EA) Limited [2021] eKLR** to support the position that Section 31(1) of the TPA allows the Commissioner to make an assessment based on such information as may be available and to the best of his judgement. 4. The Respondent cited the cases of **Mulherin v Commissioner of Taxation [2013] FCAFC 115; Intime Stone Age Limited v Commissioner of Domestic Taxes (Appeal 714 of 2022) [2024] KETAT 44 (KLR) (26 January 2024) (Judgment);** and **Osho Drapers Limited versus Commissioner of Domestic Taxes [2022] eKLR** to support the position that the Taxpayer has to adduce documents to support the objection but the Appellant failed. 5. The Respondent also relied on the cases of **Boleyn International Limited versus Commissioner of Investigations & Enforcement (Tax Appeal Tribunal No 55 of 2019); and Rongai Tiles and Sanitary Ware Limited v Commissioner of Domestic Taxes (Tax Appeals Tribunal No 163 of 2017**) to support the position that the taxpayer has a duty to provide documents to validate the notice of objection. 6. The Respondent 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. **Respondent’s prayers** 1. The Respondent urged the Tribunal for the following reliefs: 2. The appeal be dismissed with costs; and 3. The tax assessment as confirmed by the objection decision be upheld. 4. The Appellant to pay the costs of the appeal. **ISSUES FOR DETERMINATION** 1. The Tribunal identified the following issues for determination: 2. **Whether there is a valid Appeal before the Tribunal.** 3. **Whether** **the Tribunal has jurisdiction to determine the appeal in relation to the decision dated 30th January 2025; and** 4. **Whether the Respondent erred in confirming VAT assessment in relation to objection decision dated 14th October 2022.** **ANALYSIS AND FINDINGS** 1. Having identified the issue for determination, the Tribunal proceeds to analyse the same as hereunder. 2. **Whether there is a Valid Appeal before the Tribunal** 3. The dispute at hand emanates from the decisions of the Respondent dated 14th October 2022 and 30th January 2025. The Tribunal noted that the decision dated 14th October, 2022 was an Objection decision while the decision dated 30th January 2025 was a rejection for application to file a late objection. 4. The Tribunal’s jurisdiction to determine disputes is to be invoked in accordance with the provisions Sections 12 and 13 of the Tax Appeals Tribunal Act, 2013, The sections provide as follows regarding Appeals to the Tribunal: - “12. *A person who disputes the decision of the Commissioner on any matter arising under the provisions of any tax law may, subject to the provisions of the relevant tax law, upon giving notice in writing to the Commissioner, appeal to the Tribunal:* *Provided that such person shall before appealing, pay a non-refundable fee of twenty thousand shillings.* ***Procedure for appeal*** 1. *(1) A notice of appeal to the Tribunal shall—* 1. ***be in writing;*** 2. *be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner.* 2. Section 13(1) of the Tax Appeals Tribunal Act cited above is couched in mandatory terms and therefore a taxpayer must comply. It is the Notice of Appeal that invokes the Tribunal’s jurisdiction, without it the Tribunal has no jurisdiction to hear and determine the dispute. 3. From the documents presented to the Tribunal it was noted the Appellant did not attach a Notice of Appeal. It thus follows that the Appellant has not invoked the jurisdiction of the Tribunal to hear this Appeal. There is thus no proper Appeal before the Tribunal. 4. The Tribunal has held in many occasions that procedure must be adhered to as per the holding in **W.E.C. Lines Ltd vs. The Commissioner of Domestic Taxes [TAT Case No. 247 of 2020]** where it was held at Paragraph 70 while reiterating the holding in **Krystalline Salt Ltd vs KRA [2019] eKLR** that: - *“Where there is a clear procedure for redress of any particular grievance prescribed by the constitution or an Act of Parliament, that procedure should be strictly followed. Accordingly, the special procedure provided by any law must be strictly adhered to since there are good reasons for such special procedures. The relevant procedure here is the process of opposing an assessment by the Commissioner.”* 1. The Tribunal is further guided by the case of **The Owners of the Motor Vessel ―Lillian S. -vs-Caltex Oil (Kenya) Ltd (1989) KLR** (as reported in **Peter Lai Muthoka-vs-Standard Group [2017] eKLR**) Nyarangi J.A., held as follows with regard to jurisdiction:- *“Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”* 1. In light of the foregoing circumstances, the Tribunal finds and holds that the Appeal lodged by the Appellant is invalid for failure to file a Notice of Appeal. 2. Having found that the Appeal was invalid, the Tribunal could not delve into the other issues falling for determination in the Appeal as they had been rendered moot. **FINAL DECISION** 1. Based on the foregoing analysis, the Tribunal determines that the Appeal is incompetent and the Tribunal accordingly proceeds to issue the following Orders: 2. The Appeal be and is hereby struck out. 3. Each party to bear its own costs. 4. It is so ordered. **DATED AND DELIVERED AT NAIROBI THIS 2ND DAY OF JUNE 2026** ……………………………..…. ROBERT M. MUTUMA CHAIRMAN ……………………………… ……..….……..…………….. JIMMY M. MALLA. GLORIA A. OGAGA MEMBER MEMBER ……………………………… DR. TIMOTHY B. VIKIRU MEMBER