https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/143

JG Eco Bio Solutions Limited v Commissioner of Domestic Taxes (Tribunal Case E519 of 2026) [2026] KETAT 143 (KLR) (29 June 2026) (Ruling) Neutral citation: [2026] KETAT 143 (KLR) Republic of Kenya In the Tax Appeal Tribunal Tribunal Case E519 of 2026 RM Mutuma, Chair, JM Malla, G Ogaga & T Vikiru, Members June 29, 2026 Between JG Eco Bio Solutions Limited Applicant and Commissioner of Domestic Taxes Respondent Ruling Background 1.The Applicant moved this Tribunal vide a Notice of Motion dated 4th May 2026 and filed on even date under Certificate of Urgency seeking the following Orders:i.Spentii.That the Respondent be restrained from enforcing or issuing any further agency notices in respect of the disputed tax assessment pending determination of the Appeal.iii.That this honourable Tribunal issue an order compelling the Respondent to serve the Applicant with all the copies of the agency notices issued to the appellant’s Bankers and or agents other than the one annexed in the Applicant’s affidavit herewith and grant leave to Applicant file supplementary affidavit if need be.iv.That Costs of this Application be in the cause.v.That such further orders be made as the tribunal may deem just and expedient. Grounds for the Application 2.The Application was supported by a sworn affidavit by Alice Waithira Murage, filed on 4th May 2026 citing the following grounds:i.That the Respondent issued an Agency Notice before on the disputed assessment.ii.That enforcement action prior to determination of the objection is premature, unlawful, and contrary to fair tax administration principles.iii.That the tax liability was not final or due at the time the Agency Notice was issued.iv.That the Agency notice has disrupted the Appellant’s business operations and cash flows.v.That unless lifted, the Appeal will be rendered nugatory, and the Appellant will suffer irreparable prejudice.vi.That It is the interests of justice that enforcement measures be suspended pending determination of the Appeal. Response to the Application 3.The Respondent filed a Replying Affidavit of Lilian Nyarigita dated and filed on 12th May 2026, citing the following as the grounds of opposition to the application.i.That the Appellant’s Notice of Motion application is seeking for orders to lift agency notices alleged to have been issued by the Respondent.ii.That the alleged Agency Notice has neither been attached to the application nor has the Appellant cited the date when the agency notice was placed upon its account.iii.That it is trite law that he who alleges must prove. Therefore, the Appellant has the evidentiary burden to demonstrate that the agency notice was indeed placed by the Respondent.iv.That the Appellant has not discharged this evidentiary burden of proof and therefore cannot invite this court to act in vain or on mere allegations.v.That the Appellant’s application is therefore incompetent, frivolous and unmerited since the order that it seeks to set aside has not been attached and therefore, we invite the Honourable Tribunal to dismiss the same.vi.That the Appellant in its Notice of Appeal dated 4th May 2026 has stated that it seeks leave to file an appeal out of time against the Respondent’s objection decision dated 6th June 2024.vii.That the Appellant has not attached the objection decision dated 6th June 2024 thus making it difficult for the Respondent to establish if a decision was indeed issued.viii.That it is trite law that a party cannot simply make allegations without substantiating the same with proof. Again, the burden rests on the Appellant to attach the decision which it is appealing against.ix.That Further, the notice of appeal has alluded that the Appellant seeks leave to file an appeal out of time through the application dated 4th May 2026. The said application has not sought any orders to file an appeal out of time. The Application solely seeks orders to lift an alleged agency notice which has also not been attached.x.That it is trite law that parties are bound by their pleadings, the Appellant cannot seek that which they have not pleaded, therefore the prayers seeking to file an appeal out of time falls on that ground.xi.That in addition to that the Appellant has not stated any reasons why they have never filed an appeal from 2024, they have not attached any documents to support the delay.xii.That the discretion of the Tribunal cannot be exercised in vain, a party has to provide reasonable grounds to enable the Tribunal to exercise its discretion.xiii.That in light of the reason on paragraph 11 and 12 the Appellant has failed to meet the requirements under Section 13(4) of the TAT Act. Analysis and Findings 4.The Applicant seeks lifting and staying the implementation of the Respondent’s Agency Notices issued by the respondent and restraining the Respondent from issuing further agency notices pending the hearing and determination of this Application and intended Appeal. 5.The Tribunal has carefully considered the Notice of Motion dated 4th May 2026, the supporting affidavit sworn by Allice Waithira Murage, the replying affidavit sworn by Lilian Nyarigita, together with the parties’ pleadings and the applicable law. 6.The Applicant’s case is premised on the argument that the Respondent issued an agency notice before determination of the appeal lodged against the disputed assessment and that such enforcement action was unlawful, premature, and prejudicial to its business operations. 7.The Respondent, on the other hand, contends that no Agency Notice was annexed to the Application, the Applicant has not disclosed the date of issuance of the notice and has failed to demonstrate that any such notice was ever issued. The Respondent therefore submitted that the Application is unsupported by evidence and ought to fail. 8.The Tribunal’s jurisdiction to grant orders staying implementation of a tax decision is anchored under Section 18 of the Tax Appeals Tribunal Act which provides as follows:“18.Order to stay or affect the implementation of the decision under review Where an appeal against a tax decision has been filed under this Act, the Tribunal may make an order staying or otherwise affecting the operation or implementation of the decision under review as it considers appropriate for the purposes of securing the effectiveness of the proceeding and determination of the appeal.” 9.The Tribunal is guided by its previous decision in Shop and Deliver limited v Commissioner of Domestic Taxes [Tax Appeal No. 141 of 2019] where it held that: -“29.… The Tribunal notes that the only purpose for which a stay may be granted is to secure the effectiveness of the proceedings and determination of the Appeal. Thus, in its wisdom, parliament appears to have donated the power to stay implementation to avoid a situation where monies are inadvertently collected from a taxpayer only to find out after determination that the amounts had been erroneously demanded. The Tribunal finds that filling of an appeal is a ground for stay by the Tribunal.” 10.It is clear from the foregoing provision that the Tribunal’s jurisdiction under Section 18 is predicated upon existence of an appeal properly filed before it. The tribunal must therefore first satisfy itself that there exists both a tax decision under challenge and a competent appeal. 11.The tribunal notes that the Applicant seeks orders directed at an Agency notice. However, despite the Notice being central to the application, the Applicant has not annexed the Agency complained of nor provided any documentary evidence showing its issuance or service upon its bankers, customers or agents. 12.Section 56(1) of the Tax Procedures Act, 2015 provides that:“In any proceedings under this Part, the burden shall be on the taxpayer to prove that a tax decision is incorrect.” 13.The burden therefore rests upon the Applicant to place before the Tribunal sufficient material to demonstrate the existence of the impugned enforcement action. Mere allegations cannot suffice. 14.In the absence of the Agency Notice, the Tribunal is unable to ascertain the date of its issuance, the amount sought to be recovered, the recipient of the notice, the assessment to which it relates or indeed whether such a notice exists at all. 15.Consequently, the Tribunal finds that the Applicant has failed to discharge its evidentiary burden regarding the existence of the Agency which forms the foundation of the present Application. 16.The Tribunal further notes that the Notice of Appeal indicates that the Applicant intends to seek leave to file an Appeal out of time against an Objection Decision dated 6th June 2024. However, no such prayer has been sought in the present Application, and no Objection Decision has been annexed to the pleadings. 17.Section 13(1) of the Tax Appeals Tribunal Act provides that an appeal to the Tribunal must be submitted within thirty days upon receipt of the decision by the Commissioner. Where an appeal is filed out of time, section 13(3) and (4) of TATA provide for extension of time on grounds of absence from Kenya, sickness, or other reasonable cause. 18.The Tribunal in Jomaki Investments v Commissioner domestic Taxes(supra) applied the principles from Nichola Kiptoo Arap korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR, namely that an application seeking extension of time must explain the delay, demonstrate that the delay is reasonable, show the application was made without undue delay and establish that no undue prejudice will be occasioned to the respondent if the extension is granted. 19.In the present matter, the Applicant has not sought extension of time, has not explained the delay of almost two years from the alleged Objection decision dated 6th June 2024 and has not placed before the Tribunal any material upon which the discretion under Section 13(4) may be exercised. 20.The Tribunal observes that parties are bound by their pleadings. This principle was emphasized by the court of Appeal in Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & 3 Others [2014] eKLR, where the Court held that:“Parties are bound by their pleadings which in turn limited the issues upon which a trial court could pronounce” 21.Since no Application for extension of time has been pleaded, the Tribunal cannot determine or grant such relief suo moto. 22.The Applicant’s failure to annex the Objection Decision further makes it impossible for the Tribunal to verify whether an appealable decision exists, when it was issued and whether a valid appeal has been instituted before the Tribunal. 23.The tribunal therefore finds that the Applicant has not established the existence of a competent appeal capable of invoking the Tribunal’s jurisdiction under section 19 of the Tax Appeals Tribunal Act. 24.In the absence of proof of the impugned enforcement action and in the absence of a properly constituted appeal, there is no basis upon which the Tribunal can exercise its discretion to grant the conservatory orders sought Disposition 25.In the circumstances, the Tribunal finds and holds that the Notice of motion dated 4th May 2026 is devoid of merit and hereby makes the following orders:a.The Notice of motion dated 4th May 2026 be and is hereby dismissed; andb.The prayers seeking the lifting, suspension, vacation of the alleged Agency Notice are hereby declined.c.No orders as to costs. 26.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF JUNE 2026ROBERT M. MUTUMACHAIRMANJIMMY M. MALLAMEMBERGLORIA A. OGAGAMEMBERDR. TIMOTHY B. VIKIRUMEMBER