https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/220

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E1238/2025 Kenfreight E.A Limited 1st Appellant - Versus - Kenya Revenue Authority 1st Respondent JUDGMENT # BACKGROUND 1. The Appellant is a limited liability company duly incorporated under the Laws of the Republic of Kenya and licensed as a clearing and forwarding agent. 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 identified various consignments that had not exited the country and issued demand notices relating to customs taxes. After determining the customs value, the Respondent computed the excise duty, road maintenance levy (RDL), petroleum development levy (PDL), petroleum regulatory levy (PRL), Kenya Railway Development Levy (KRD) and import declaration fee (IDF). 1. The Respondent subsequently demanded the established unpaid customs taxes from the Appellant vide various demand letters dated 1st August 2016 and 15th June 2016. The total demanded taxes amounted to Kshs 60,089,863. The Respondent further sent notices dated 14th July 2016 to NIC Bank requiring payment of the bond amount guaranteed by the bank. 2. The Appellant was served with various demand notices dated 1 st August 2016 and 15th June 2016 relating to customs taxes namely; excise duty, road maintenance levy (RDL), petroleum development levy (PDL), petroleum regulatory levy (PRL), Kenya Railway Development Levy (KRD) and import declaration fee (IDF). 3. The Respondent issued notices dated 14th July 2016 to NIC Bank requiring payment of the guaranteed bond amounts amounting to Kshs 18,484,177. 4. Dissatisfied with the Respondent's actions the Appellant lodged a Notice of Appeal dated 23rd October 2025 before this Honourable Tribunal. # THE APPEAL 1. Through the memorandum of Appeal dated 3rd November 2025 and filed on even date, the Appellant raised the following grounds of appeal: 1. That the Respondent acted unlawfully, irrationally, and in abuse of statutory power by enforcing payment of customs duties under Section 109 of the East African Community Customs Management Act 2004 (EACCMA) in respect of transit entries whose bonds had already been cancelled and retired, and for which Certificates of Export had been duly issued by the Respondent's own officers. 2. That the Respondent failed to exercise due diligence and administrative consistency by initiating enforcement without reconciling its own bond management records and export certificates, thereby violating principles of transparency and accountability. 3. That the Respondent misapplied Section 78(3) of EACCMA by imposing obligations on the Appellant that were neither legally required nor operationally feasible, given the nature of overland exports and the Appellant's limited role as a clearing agent. 4. That the Respondent failed to produce verifiable evidence to support the claim that the goods did not exit Kenya, including data from the Electronic Cargo Tracking System (ECTS), weighbridge logs, or URA's Asycuda System, thereby rendering the enforcement speculative and unsubstantiated. 5. That the Respondent's reliance on Section 219 of EACCMA to invite the Appellant to compound an alleged offence was unlawful and inapplicable as the Appellant had not admitted to any offence and had consistently denied liability throughout its engagement with the Respondent. 6. That the Respondent's cumulative conduct marked by procedural irregularity, evidentiary gaps, and disregard for internal records, violated the Appellant's right to fair administrative action under Article 47 of the Constitution and the Fair Administrative Action Act. # THE APPELLANTS CASE 1. In support of the appeal, the Appellant lodged statement of facts dated 3rd November 2025 and filed on even date together with submissions dated 31stMach 2026 and filed. on 1st April 2026. 2. The Appellant averred that between 2014 and 2016, it was engaged by various exporters, including Finejet Limited, Petrocatm Kenya Limited, and Piccalilly International Limited, as a clearing and forwarding agent for various fuel consignments destined for Uganda, DRC, and South Sudan. The consignments were transported overland via tankers, and the Appellant's role as an agent was limited to documentation and clearance at the point of export. 3. The transit entries were secured under two general revolving bonds executed by the Appellant and guaranteed by NIC Bank Limited, namely RCTG14/12808KE and RCTG15/03654KE. Upon export, the Respondent's officers issued Certificates of Export confirming exit of the goods; subsequently, the bonds were retired and the amounts released back into the Appellant's revolving fund for utilisation for other consignments. 4. On 14 th July 2016, the Respondent issued agency notices to NIC Bank Limited, the Appellant's bankers, demanding payment of Kshs 18,484,177 on account of alleged non-cancellation of transit bonds. The Respondent then issued further notices demanding Kshs 31,273,459 and Kshs 10, 332, 227. The total amount demanded was Kshs.60,089,863. 5. The Appellant stated that it engaged the Respondent in an aim of resolving the dispute and offered all requested documentations and explanation but the Respondent maintained its demand. 6. The Appellant also stated that it sought intervention of the High Court seeking orders prohibiting the Respondent from enforcing the demands. 7. Dissatisfied with the Respondent's actions the Appellant lodged this appeal. 8. In support of ground one of the appeal, the Appellant stated that as a clearing and forwarding agent, its role was strictly limited to handling the customs documentation and facilitating exportation of the consignments in question out of Kenya; its role did not involve any aspect of importation of the consignment into Uganda. It did not have possession or custody, control, or beneficial ownership of the goods. 9. It asserted that the Respondent's attribution of liability to the Appellant disregards this operational distinction and misapplies the definition of 'owner under Section 2 of EACCMA, which cannot reasonably be extended to a non- custodian agent. 10. It contended that the Respondent's reliance on Section 78(3) of EACCMA to demand proof of landing in Uganda was legally misplaced. It averred that this Section's provision applies to goods transported under customs control to a foreign destination, but in this case, the goods were transported overland by tanker, and the Respondent had already certified their exit from Kenya. The Appellant claimed that its obligations ceased at the border and it had no mandate or capacity to monitor inland delivery in Uganda. 11. The Appellant stated that the Certificates of Export were issued by the Respondent's own officers after physical verification of seals and documentation. These certificates formed the legal basis for the cancellation of the transit bonds. It contended that the Respondent's subsequent enforcement contradicts its own certification and amounts to administrative inconsistency. It noted that the certifying officer who confirmed the exit and the officer who cancelled the bond were both acting within the Respondent's system, yet the enforcement ignored their actions entirely. 1. The Appellant further averred that the Respondent failed to produce any verifiable evidence to support its claim that the goods did not exit Kenya. It contended that no data from the Electronic Cargo Tracking System (ECTS), weighbridge logs, or URA's Asycuda system was presented, therefore, the enforcement was speculative and unsupported by objective monitoring tools. 2. It averred that the ECTS system which has been operational since 2009 and is owned and managed by the Respondent, is designed to track cargo in real time, detect seal tampering, and confirm exit events. It stated that the Respondent's failure to rely on this system, despite its availability, undermines the credibility of its enforcement action and violates the duty of candour owed to Taxpayers. in this case, the Appellant. 3. The Appellant averred that the Respondent's own documentation confirms that different officers certified export and cancelled the bonds. It opined that the internal action demonstrates that the Respondent had accepted the exit of goods and discharged the guarantees and that the enforcement demands ignore this internal consistency and reflect administrative irrationality, as no reconciliation was undertaken before invoking recovery powers. 4. According to the Appellant, the Respondent's conduct violated the principles of fair administrative action under Article 47 of the Constitution and the provisions of the Fair Administrative Action Act. It maintained that the enforcement was executed without transparency, proportionality, or regard for the Appellant's documentation and correspondence. 5. The Appellant averred that Section 109 of EACCMA empowers the Commissioner to recover duties from the guarantor where the conditions of the bond have not been fulfilled. In the present case, the Respondent had already confirmed compliance and discharged the guarantees. It stated that the invocation of Section 109 was therefore ultra vires and procedurally defective, as no breach had been established. 6. It stated that enforcement under Section 109 must be based on a demonstrable breach of bond conditions but the Respondent failed to identify any specific entries that were non-compliant, nor did it produce any audit trail, reconciliation report to justify the enforcement. 7. In light of the foregoing, the Appellant urged the Tribunal to find that the Respondent's enforcement under Section 109 of EACCMA was unlawful, irrational, and procedurally improper. The enforcement demands should be vacated in full, and the Appellant's constitutional and statutory rights affirmed. 1. In support of the second ground of appeal, the Appellant averred that for each of the transit entries in question, the Respondent, through its officers, had issued a Certificate of Export confirming that the goods had exited Kenya. These certificates were issued after physical verification of seals and documentation by the Respondent's own officers, and they triggered the cancellation of the corresponding transit bonds. 2. According to the Appellant, the cancellation of the bonds was effected within the Respondent's own bond management system. The guarantees were retired from the revolving fund held by NIC Bank Limited, and the Appellant's bond facility was restored for future use. It argued that these actions, taken by the Respondent itself, amounted to a formal acknowledgement of compliance by the Appellant. 3. The Appellant averred that despite the foregoing, the Respondent proceeded to issue enforcement demands totalling Kshs 60,089,863 without undertaking any reconciliation of its own records. It asserted that no audit trail or internal review was presented to justify the reversal of its earlier actions. It opined that the enforcement was therefore, not only premature but also legally indefensible. 4. The Appellant contended that the enforcement was based on a blanket assertion that the goods had not exited Kenya, yet the Respondent had already certified their exit and cancelled bonds. It opined that this contradiction reflects administrative inconsistency and undermines the integrity of the Respondent's decision-making process. 5. The Appellant contended that the Respondent's own officers had confirmed the exit and cancelled the bonds. These actions were recorded in the Respondent's systems and were not challenged or reversed at the time. It pointed out that the enforcement demands ignore these records entirely, suggesting that no reconciliation was undertaken before invoking recovery powers. 6. The Appellant noted that the failure by the Respondent to reconcile its records amounts to a breach of the duty of care and transparency owed to taxpayers. Further, it noted that the enforcement of the demands in the face of possible contradictory internal records constitutes an abuse of power on the part of the Respondent and violates the rule of law. 7. It urged that the Respondent's conduct reflects a breakdown in internal coordination and decision-making. The Appellant was of the view that the enforcement demands were issued without reference to the officers who had certified export or cancelled the bonds, and without any attempt to verify the status of the entries. 1. The Appellant further contented that the Respondent's failure to reconcile its records is not a mere administrative oversight; it is a substantive defect that goes to the legality of the enforcement itself. It noted that recovery powers under Section 109 of EACCMA cannot be exercised in the absence of a verified breach. 2. The Appellant averred that the Respondent's failure to reconcile its records also violates Article 47 of the Constitution and the Fair Administrative Action Act, and that the enforcement was executed without transparency, proportionality, or regard for the Appellant's documentation. 3. The Appellant stated that it had engaged the Respondent in correspondence and provided all relevant documentation, including the Certificate of Export but the Respondent declined to consider this evidence and proceeded with enforcement regardless, demonstrating administrative indifference and procedural unfairness. 4. It averred that the Respondent's failure to reconcile its records also offends the doctrine of legitimate expectation on the basis that once the Respondent certified export and cancelled the bonds, the Appellant was entitled to expect that no further liability would arise in respect of those entries. 5. The Appellant further stated that the Respondent's failure to reconcile its records reflects a pattern of administrative irrationality. It was of the view that the enforcement demands were issued without internal consistency, without evidentiary support, and without regard for the Appellant's operational role. 6. It stated that the Respondent's conduct also violates the principles of good governance, integrity, transparency, and accountability under Article 10 of the Constitution. It maintained that the enforcement was executed in a manner that was whimsical, excessive and in flagrant disregard of the rules of natural justice. 7. The Taxpayer argued that the Respondent's failure to reconcile its records is particularly egregious given the availability of electronic systems, such as the Electronic Cargo Tracking System, which could have confirmed the exit of goods and the status of the bonds. The Respondent failed to consult or produce this data. 8. It further stated that the Respondent's failure to reconcile its records caused economic prejudice, including the direct debit of Kshs18,484,177 from the Appellant's account, without hearing or recourse. 9. In light of the foregoing, the Appellant urged this Honourable Tribunal to find that the Respondent's failure to reconcile its internal records before initiating enforcement under Section 109 of EACCMA, was unlawful, irrational, and procedurally defective. It opined that enforcement demands should be vacated in full, and the Appellant's constitutional and statutory rights affirmed. 10. In support of the third ground of appeal, the Appellant averred that Section 78(3) of ECCMA is intended to apply to goods exported under customs control to a foreign destination, typically in cases involving sealed containers or bonded cargo subject to verification at the point of importation. It averred that this provision requires proof of landing only where such control continues beyond the border. The Appellant opined that it does not apply to overland fuel consignments that have already been certified as having exited the exporting country. 11. It argued that the fuel consignment was transported by road via tankers and that its role was strictly limited to customs documentation and clearance at the point of export. The Appellant pointed out that the Respondent's officers physically verified the consignments, confirmed the integrity of seals and issued Certificates of Export. These Certificates triggered the cancellation of the transit bonds and discharged the Appellant's obligations. 12. The Appellant submitted that once the Respondent certified exit and cancelled the bonds, the Appellant had no further legal or operational mandate to track or verify inland delivery in Uganda. It was of the view that the demand for proof of landing was therefore, not only misplaced but also contrary to the statutory framework and the Appellant's limited agency role. 13. According to the Appellant, the Respondent's interpretation of Section 78(3) of EACCMA disregards the operational realities of overland exports and imposes a burden on the Appellant that is neither contemplated by law nor supported by practice. 14. The Appellant further noted that statutory powers are required to be exercised within the confines of the enabling legislation and cannot be stretched to impose obligations not expressly provided for. The Appellant added that the Respondent failed to produce any evidence from the Uganda Revenue Authority or the Asycuda system to support its claim that the goods did not enter Uganda. It noted that no endorsed T812 forms, URA clearance entries, or border processing records were presented. The Appellant was of the view that the enforcement was therefore speculative and unsupported. 1. The Appellant averred that the Respondent's reliance on the alleged absence of URA records, without verifying its own Certificates of Export or consulting the Electronic Cargo Tracking System, amounts to administrative negligence and breach of the duty of care and transparency. The Appellant stated that public bodies must provide a true and comprehensive account of their actions when challenged, and such administrative action is required to be rational, proportionate, and grounded in Law. It maintained that the Respondent's invocation of Section 78(3) of EACCMA fails this test and amounts to an abuse of statutory power. 2. The Appellant contended that the Respondent's actions also violate the principles of fair administrative action under Article 47 of the Constitution and the Fair Administrative Action Act. It argued that the enforcement was executed without transparency, proportionality, or regard for the Appellant's documentation. 3. According to the Appellant, the Respondent's interpretation of Section 78(3) of EACCMA is inconsistent with the doctrine of legitimate expectation. It was of the view that once the Respondent certified the export and cancelled the bonds, the Appellant was entitled to expect that no further liability would arise in respect of those entries. The Appellant contended that the Respondent's actions were arbitrary, whimsical, and in flagrant disregard of the rules of natural justice and fall squarely within the prohibited category of administrative fairness. 4. In light of the above, the Appellant urged this Honourable Tribunal to find that the Respondent misapplied Section 78(3) of EACCMA by imposing obligations on the Appellant that were neither legally required nor operationally feasible. It added that the enforcement demands premised on this misapplication should be vacated in full, and the Appellant's rights under the Constitution affirmed. 5. In support of ground four of the appeal, the Appellant averred that the Respondent's enforcement demands were premised on the assertion that certain consignments failed to reach their intended destination. The Appellant however, asserted that this claim was made without producing any objective or contemporaneous records to support it. It stated that no entry-level breach was identified, and no documentation was tendered to demonstrate that the goods remained within Kenyan territory. 1. The Appellant acknowledged that in tax matters, the burden of proof ordinarily rests with the taxpayer. In discharging this burden to prove that the consignment exited Kenya, the Appellant stated that it furnished the Respondent with Certificates of export duly issued by the Respondent's own officers, confirming that the goods had exited Kenya. 2. The Appellant averred that the ECTS system is specifically designed to monitor cargo under customs control and that it provides real-time tracking, seal integrity verification, and exit confirmation. According to the Appellant, the system is capable of generating alerts in case of route deviation, seal tampering, or failure to exit. It argued that the Respondent's failure to consult or produce ECTS data undermines the credibility of its enforcement action. 3. The Appellant further stated that weighbridge logs and URA's Asycuda entries could have provided independent confirmation of exit and cross-border processing. It asserted that these systems are routinely used to verify transit compliance and are accessible to the Respondent through inter-agency protocols. It contended that the absence of such records suggests that no proper investigation was undertaken prior to enforcement. 4. According to the Appellant, the enforcement was executed in disregard to the Certificates of Export issued by the Respondent's own officers. It stated that these certificates were based on effective verification of seals and documentation and triggered the cancellation of the transit bonds. It was of the view that the Respondent's failure to reconcile this documentation with its enforcement decision reflects internal inconsistency and procedural impropriety. 5. In light of the foregoing, the Appellant urged this Honourable Tribunal to find that the Respondent's action is unlawful, irrational, and procedurally defective. The demands should be vacated in full. 6. In support of the fifth ground of appeal, the Appellant stated that Section 219 of EACCMA empowers the Commissioner to compound offences only where the person charged admits to having committed the offence and consents in writing to the compounding process. It averred that this statutory mechanism is discretionary and conditional, and cannot be invoked unilaterally or coercively in the absence of an admission. 7. It averred that at no point did it admit to any offence under EACCMA or any other revenue law. On the contrary, the Appellant maintained that it had fully discharged its obligations as a clearing agent and provided Certificates of Export to demonstrate compliance. It stated that the Respondent's invitation to the compound was therefore, legally baseless and procedurally improper. 1. The Appellant stated that that the Respondent's invocation of Section 219 of EACCMA was not made in good faith, but rather as a coercive tactic to compel payment in the absence of a verified breach. It stated that this conduct amounts to abuse of statutory power and violates the principles of fair administrative action under Article 47 of the Constitution. 2. According to the Appellant, the courts have, on multiple occasions, held that statutory powers must be exercised reasonably, fairly, and within the bounds of the enabling legislation. It contended that the compounding mechanism under Section 219 of EACCMA cannot be used to circumvent due process or to impose liability where none has been established. 3. The Appellant further stated that the Respondent's actions also offend the doctrine of legitimate expectation in that having provided documentation confirming compliance, the Appellant was entitled to expect that no enforcement or compounding would be pursued without due process. 4. The Appellant averred that the Respondent's conduct reflects a broader pattern of administrative irrationality and procedural impropriety. It was of the view that the invitation to compound was issued without any investigations, and without identification of a specific offence. 5. It maintained that the Respondent's misuse of Section 219 caused reputational and economic prejudice, including the wrongful debit of Kshs. 18,484,177 from the Appellant's account, despite the absence of any proven offence. 6. In light of the above, the Appellant urged this Honourable Tribunal to find that the Respondent's reliance on Section 219 of EACCMA to invite the Appellant to compound an alleged offence was unlawful, inapplicable, and procedurally defective. It added that the enforcement demands premised on this misuse should be vacated in full. 7. In support of the sixth ground of appeal, the Appellant stated that Article 47(1) of the Constitution provides that every person has the right to administrative action that is expeditious, efficient, lawful, reasonable, and procedurally fair. According to the Appellant, the Respondent's enforcement conduct fell short of each of these standards. It added that the enforcement was executed without reconciliation of internal records. 8. The Appellant asserted that the Respondent failed to act transparently or reasonably in issuing enforcement demands totalling Kshs 60,089,863. It noted that the demands were issued in bulk and in disregard of Certificates of Export and bond cancellation records that the Respondent's own officers had issued. 9. It maintained that the Respondent's conduct reflects a pattern of administrative indifference and procedural unfairness. The Appellant had engaged the Respondent in correspondence, provided all relevant documentation and clarification, which the Respondent declined to consider and proceeded with enforcement regardless. 10. The Appellant submitted that the Respondent's disregard for its own documentation, including Certificate of Export and bond management history, amounts to administrative irrationality and procedural impropriety and should not be allowed to set precedent for how the Respondent handles such matters. 11. It stated that the Respondent's conduct violates the principle of good governance, integrity, transparency, and accountability under Article 10 of the Constitution. Public officers are required to act in the service of the people and in accordance with the law. It added that the Respondent's actions were whimsical, excessive, and in flagrant disregard of the rules of natural justice. 12. In light of the foregoing, the Appellant urged this Honourable Tribunal to find that the Respondent's cumulative conduct violated the Appellant's right to fair administrative action under Article 47 of the Constitution. It urged the Tribunal to set aside the demands in full, and affirm the Appellant's constitutional right to fair administrative action. # Appellant’s Prayers 1. The Appellant prayed for the following orders: 2. The Appeal as filed be allowed and the agency notices and enforcement demand issued by the Respondent set aside in their entirety; 3. The enforcement demands of Kshs 60,089,863 be declared unlawful, unfair, and ungrounded in customs law and be vacated in full; 4. The Respondent's invocation of Sections 78(3), 109, and 219 of the East African Community Customs Management Act be found to have been misapplied and procedurally defective; 5. The Respondent's conduct be declared to have violated the Appellant's right to fair administrative action under Article 47 of the Constitution and the Fair Administrative Action Act; 6. The Kshs. 18,484,177 paid under the agency enforcement be refunded to the Appellant; 7. Costs of this Appeal be awarded to the Appellant; and 8. Any other orders that this Honourable Tribunal may deem fit. # THE RESPONDENT’S CASE 1. In response to the appeal, the Respondent filed its Statement of Facts dated 26th January 2026 and filed on 27 th January 2026.together with submissions dated 30th March 2026 and filed on 31st March 2026 2. On whether the Commissioner erred in acting against Section 109 of EACCMA on cancelled bonds, the Respondent stated that it issued the tax demands based on the consignments that had not exited the country. It stated that the Appellant did not provide the Certificates of Export to demonstrate that the consignments exited the country. In this regard, it stated that the conditions of the bond had not been complied with and the Respondent acted within the provisions of Section 109 of EACCMA by issuing the notices. 3. On whether the Commissioner erred in failing to carry out due diligence on reconciling bond records, the Respondent stated that the investigations conducted by the Respondent pointed out consignments that had not exited the country. In addition, there were no Certificates of Export provided for the identified consignments. The Respondent then proceeded to issue tax demands to the Appellant and issued notices to NIC Bank requiring payment of the guaranteed bond amounts. 4. The Respondent stated that its notices to NIC Bank were specific to the identified consignments which had not exited the country. As such, the Appellant's assertion that the Respondent failed to carry out due diligence on reconciliation of bond records was false. 5. On whether the Commissioner erred by failing to provide evidence that the goods did not leave Kenya, the Respondent stated that the Appellant failed to provide the Certificates of Export to demonstrate that the consignments exited the country. 6. It stated that the burden of proof lies with the Appellant and in the absence of documents/information to support the loans alleged by the Appellant, the Respondent's assessment enjoys the presumption of correctness as was held in the case of ***Kenya Revenue Authority v Man Diesel & Turbo Se, Kenya [2021] eKLR****.* 7. In response to the assertion that the Appellant had not admitted to any offence to warrant application of Section 219 of EACCMA, the Respondent stated that it issued demand notices to the Appellant and that it did not compound the offences committed by the Appellant. It maintained that Section 219 of EACCMA does not apply in this case. 8. On whether Commissioner violated Article 47 of the Constitution and the Fair Administrative Action Act, the Respondent asserted that following issuance of the tax demand notices on 1st August 2016 and 15 th June 2016, the Appellant did not provide any information or documents to dispute the assessed taxes. Therefore, the Respondent contended that the Appellant's claim that its right to fair administrative action was violated is unfounded, as it failed to exercise its right to contest the demanded taxes. 9. The Respondent argued that the onus of proving the violation against the legal provisions lies on the Appellant. 10. According to the Respondent, there is no evidence averred that the Respondent did not review documents provided nor has the Appellant submitted evidence to show that it presented evidence to the Respondent. 11. The Respondent relied on Section 56(1) of the Tax Procedures Act Cap 469B(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." 12. The Respondent averred that all actions were taken in accordance with the following provisions; 13. Sections 78, 109 and 219 of EACCMA; 14. Section 13, 30 of the Tax Appeals Tribunal Act, No. 40 of 2013; and 15. The Appellant was granted an opportunity to respond to the audit findings and object to the assessment in line with due process. 16. The Respondent submitted that the tax demands were justified. That Section 135 of the EACCMA empowers the Respondent to demand for short levied taxes. It also cited the case of ***Pharmaceutical Manufacturing (K) Co*** ***Ltd & 3 others v Commissioner General of Kenya Revenue Authority & 2 others [2017] eKLR*** to support this position. 1. The Respondent submitted that the Objection of the Appellant was rejected on the basis that the Appellant did not provide proper documents in support of the grounds raised in the objection raised. It cited the cases of ***Mulherin vs Commissioner of Taxation [2013] FCAFC115****;* ***Intime Stone Age Limited v Commissioner of Domestic Taxes (Appeal714 of 2o22) [2024] KETAT 44 (KLR);*** *and* ***Osho Drapers Limited v Commissioner of Domestic Taxes [2022] eKLR*** to submit that the taxpayer has a duty produce documents to demonstrate that the Respondent decision was incorrect. The Respondent submitted that the Appellant failed to discharge the burden of proof. # Respondent’s Prayers 1. The Respondent prayed;- 2. Tribunal to dismiss the Appeal in its entirety with costs to the Respondent, and 3. uphold the tax assessment as confirmed by the Respondent. 4. Orders Appellant to pay the costs of the Appeal # ISSUES FOR DETERMINATION 1. The Tribunal having considered the pleadings puts forth the following issues for determination: # Whether the Tribunal has jurisdiction to entertain the appeal; and 1. **Whether the Respondent was justified in demanding for unpaid custom taxes from the Appellant.** **ANALYSIS AND FINDINGS** 1. Having identified the issues for determination, the Tribunal proceeds to analyse the same as hereunder; # a. Whether the Tribunal has jurisdiction to entertain the appeal 1. The Tribunal noted several issues in relation to this appeal. First, the Respondent issued a number of demand notices dated 15th June 2016 and 1st August 2016. The cause of action arose in 2016 yet the Appellant approached this Tribunal vide a notice of appeal dated 23rd October 2025, being over nine years since the cause of action arose. Consequently, the timelines under Tax Appeals Tribunal Act Cap 469A(TATA) are in focus and raised an issue whether the Tribunal has jurisdiction. 2. Secondly, the Appellant filed a bundle of documents composed of three types of documents *(the general bond, notice seeking to recover funds secured under the bonds issued to the Appellant’s banker, and demand of taxes issued to the Appellant)*. In that bundle, there was no evidence to indicate that the Appellant objected to the Respondent’s tax demands. The Respondent also pointed out at paragraph 23 of the statement of facts that the Appellant failed to exercise its right to contest the demanded taxes. Therefore, the issue for determination would be whether the Tribunal has jurisdiction to entertain the appeal where the taxpayer has not objected to the assessment. 3. Thirdly, the Appellant in statement of facts stated as follows at paragraph 6 of the statement of facts: *‘‘The Appellant also sought intervention of the High Court is obtaining orders prohibiting the Respondent from enforcing the demands.’’* The Appellant and the Respondent did not shed light on the proceedings at the High Court therefore, it is not clear whether the High Court has pronounced itself on this matter. Therefore, it is not clear whether the matter is *res judicata*. It is also not clear whether the matter is still pending at the High Court and if that is the case, this appeal should be halted. 4. The Tribunal has already established that the cause of action arose in 2016 yet the Appellant approached the Tribunal on 23rd October 2025, being over nine years since the cause of action arose. 5. The question before the Tribunal is whether it has jurisdiction on this matter, 6. The Court cannot make a move without jurisdiction. In the *locus classicus* case of **Owners of the Motor Vessel “Lillian S" v Caltex Oil (Kenya) Ltd [1989] KECA 48 (KLR),** Nyarangi JA held, *inter alia*: *‘‘…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 the proceedings pending other evidence. A court of law downs its tools in respect of the matter before it the* *moment it holds the opinion that it is without jurisdiction.”* 1. Section 13(1) of the TATA which provides that: *13. Procedure for appeal* 1. *A notice of appeal to the Tribunal shall—* 1. *be in writing or through electronic means;* 2. *be submitted to the Tribunal* ***within thirty days*** *upon receipt of the decision of the Commissioner.* 2. Where the taxpayer delays to file an appeal, the taxpayer is at liberty to seek leave from the Tribunal to file appeal out of time. In this regard, Section 13(3) and (4) of the TATA provides as follows: 3. *The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).* 4. *An extension under subsection (3) may be granted owing to absence from Kenya, or sickness, or other reasonable cause that may have prevented the applicant from filing the notice of appeal or submitting the documents within the specified period.* 5. In the case of ***Commissioner of Domestic Taxes v Lifecare International Brokers Limited [2020] eKLR*** the Court observed as follows at paragraph 14: *"Failure to file an appeal within time and without complying with statutory conditions is not a mere technicality that can be overlooked, it goes to the competence of the appeal..."* 1. Similarly, the Court of Appeal in the case of **Patrick Kiruja Kithinji v Victor Mugira Marete** MRU CA Civil Appeal No. 48 of 2014 [2015] eKLR held that: ‘‘*It is our view, whether or not an appeal is filed on time goes to the jurisdiction of this Court. It is trite that this Court has jurisdiction to entertain appeals filed within the requisite time and/or appeals filed out of time with leave of the Court. To hold otherwise would upset the established clear principles of institution of an appeal in this Court. Consequently, we find that an appeal filed out of time is not curable under Article 159.’’* 1. The cause of action arose in 2016 yet the Appellant approached the Tribunal over nine years later. There is nothing on record to indicate that the Appellant sought leave to appeal out of time. As such the appeal is not properly filed. 2. The Appellant should have filed an application seeking leave to appeal out of time before filing the appeal. For the reason, the appeal is invalid. Secondly, the Appellant did not file evidence of objection to the assessment and without it, the Tribunal cannot ascertain that the Appellant objected to the assessment. Failure to object to a tax assessment means that the Tribunal cannot have jurisdiction over the matter because an appeal cannot arise where there is no objection. Thirdly, the Appellant having mentioned that it sought audience from the High Court but failed to provide the status update on the matter, it is not clear whether this appeal is *res judicata* or whether the appeal is *res sub judice* 3. This being the finding, the consideration of the issue on whether the Respondent was justified in demanding for unpaid custom taxes from the Appellant is hereby rendered moot. # FINAL DECISION 1. The upshot to the foregoing is that the Appeal is incompetent. Consequently, the Tribunal makes the following orders: - 2. The Appeal is hereby struck out; and 3. Each party to bear its own cost. 4. It is so ordered. # DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF JUNE 2026 SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. ROBERT MUGAMBI MUTUMA (CHAIRPERSON) HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER DOMINIC KIPKEMOI RONO HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-06-03 15:05:19