https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/312

REPUBLIC OF KENYA IN THE TAX APPEALS TRIBUNAL AT NAIROBI TAX APPEAL NO E422 OF 2025 LALJI VISHRAM HIRAM .............................................................................. APPELLANT VERSUS COMMISSIONER OF CUSTOMS AND BORDER CONTROL .................... RESPONDENT JUDGMENT BACKGROUND 1. The Appellant is a Kenyan resident. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act 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 the 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 of the First Schedule to the Act for purposes of assessing, collecting and accounting for all revenues in accordance with those laws. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 1 of 25 3. The Respondent issued a demand for tax on the Appellant on 26 th December 2024 covering the period 2016 and 2017. The demanded tax was Kshs 2,039,423,932.00 being Income Tax, VAT, and Customs duty. 4. On 20th February 2025 the Appellant was allowed by the Respondent to object out of time, which he did on 24th February 2025. 5. The Respondent reviewed the Appellant’s objection and vide a letter dated 26th March 2025 issued the Review Decision. 6. Aggrieved by the Respondent’s decision, the Appellant filed his Notice of Appeal dated 11th April 2025 and filed on the same date. THE APPEAL 7. The Appeal is premised on the Appellant’s grounds of appeal as stated in his Memorandum of Appeal dated 30th April 2025 and filed on 4th May 2025. a. The Respondent erred in law and in fact by failing to consider that the matter was under investigation by the Directorate of Criminal Investigations (DCI) thereby questioning the origin and liability of the alleged tax arrears against the Appellant. b. The Respondent erred in law and fact and was unfair in their decision, having failed to consider the DCI status report confirming that the matter was still under investigation, which established that there was identity theft and misuse of the Appellant’s PIN. c. The Respondent’s Objection Decision dated 26th March 2025 failed to accurately reflect the DCI’s communication and Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 2 of 25 status of investigations, particularly clause 3.3 of the Respondent’s decision, which acknowledged that investigations are still ongoing, yet unjustifiably imposes liability on the Appellant. d. That the Respondent’s failure to consider and ascertain the relevance of the essential documents constituted a violation of the Appellant’s right to a fair administrative process, as enshrined in Article 47 of the Constitution of Kenya, 2010, and the Fair Administrative Action Act, 2015. e. That the Respondent’s failure to consider the clearance documents and related material resulted in an erroneous assessment of tax liability, which has and will cause undue prejudice and financial hardship to the Appellant. f. That the decision of the Respondent is unfair, irrational, and contrary to the principles of justice and equity, warranting intervention by this Honourable Tribunal. g. That the 2nd Respondent, being the ultimate tax administration body, erred in endorsing and upholding the flawed decision of the 1st Respondent without conducting an independent and impartial review of the Appellant’s objection. THE APPELLAANT’S CASE 8. The Appellant’s case is premised on its: a. Statement of Facts dated 30th April 2025 and filed on 4th May 2025 together with the documentation attached thereto. b. Supplementary Statement of Facts dated 18th May, 2026 Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 3 of 25 c. Written submission dated and filed on 25th May, 2026. 9. The Appellant asserted that it became aware of the alleged tax liability through correspondence dated 5th February 2019 and was surprised that a KRA PIN that belonged to him was linked to an entity, Apcon Developers Ltd, and used without his authorization. It therefore unequivocally denied any involvement with Apcon Developers Ltd and that the other entity, Jayan Enterprises, had been inactive since its establishment, as he had no means to do business and was under employment. He averred that the DCI subsequently conducted investigations in which all individuals suspected of fraudulently establishing Apcon Developers were summoned in 2021 and that he was also summoned despite his lack of involvement in the matter. 10. He stated that following the investigations, he was issued with a Departure Prohibitory Order (DPO) on 8th January 2021 which was later lifted on 22nd April 2021, thereby preventing him from travelling abroad, including for a scheduled medical treatment trip to India. 11. He asserted that, due to a lack of any evidence directly implicating the Appellant in the alleged tax evasion, the DCI Officer formally proceeded with investigations with regards to the actual perpetrators. He reiterated that the absence of evidence implicating him stemmed from his disclosure to the DCI that his vehicle was broken into and ransacked in 2019, resulting in the theft of crucial documents. 12. He stated that he recorded the incident at Kilimani Police Station vide OB No.28/23/2019 and that it wasn’t until years later, after receiving correspondence from the Respondent dated 5th February Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 4 of 25 2019, that he realized that his documents that had been stolen were used to register a business as Apcon Developers. 13. He averred that despite these happenings, he received a demand letter dated 26th November 2024 alleging outstanding tax obligations, which shocked him, given that he had already been cleared of any involvement in the fraudulent transactions of Apcon Developers. 14. He pointed out that during the period from 2017 to 2022, he was undergoing critical medical treatment for a life-threatening enlarged prostate and urinary-related condition, in addition to recovering from an elbow fracture. He stated that his treatment predominantly took place outside Kenya requiring immediate medical attention and rendering him unable to respond to tax allegations during this period, which is the reason why he filed a late objection. 15. The Appellant asserted that he engaged the Respondent on various dates, including providing an update of the criminal investigation on 5th March 2025.However, despite all this effort, he was served with a demand for tax. He averred that he sought further updates from the DCI and was informed that the Respondent had been served with the pertinent documents concerning the case, and that the DCI had affirmed that the forensic examination established then one Kavit Shah was the one fraudulently operating the bank accounts to the alleged companies linked to the Appellant. 16. The Appellant averred that it was further established that the cheque transactions and outgoing wire transfers were fraudulently drawn by Kavit Shah in the Appellant’s name through fraudulently procured power of attorney. He argued that, despite confirmations Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 5 of 25 from the DCI through their status report, the Respondent issued the objection decision on 26th March 2025 attributing the customs liability of Kshs 862,264,240.00 to the Appellant, yet being well aware that the matter before the Respondent had a criminal element, in that it was being investigated by the DCI. 17. In his written submissions, the Appellant identified four issues for determination. a. Whether the tax assessments against the Appellant are sustainable in law and fact, given that the forensic evidence and the Respondent’s own communications now conclusively established that the subject bank accounts were fraudulently opened and operated by a third party using forged documents under the Appellant’s identity. 18. The Appellant submitted that the Respondent’s entire case rests on a banking analysis of accounts held at Diamond Trust Bank in the names of Apcon Developers and Jayan Enterprises attributed to the Appellant under KRA PIN A002711402N and which the Respondent treated every deposit in those accounts as the Appellant’s undeclared import value, hence arriving at a principal customs tax liability of Kshs 862,264,240 for the years 2016 and 2017. 19. He however, pointed out that although the export forensic evidence conducted by the DCI by Alex Mwongera dated 3rd February 2026, was his conclusions were also supported by a group of independent experts that the signatures on the account opening documents and the business registration forms were not the Appellant’s. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 6 of 25 20. The Appellant submitted that the DCI investigation, in his own words, stated that the signatures were ‘dissimilar and distinguishable,” a finding that was echoed by the Respondent’s letter dated 12th February 2026 to the Appellant’s counsel, notifying him that, as per the forensic document examiner’s report, the signatures were “dissimilar and distinguishable. 21. The Appellant pointed out that a party cannot, in one breath, maintain a tax assessment premised on the ownership and control of certain accounts, and in the same breath, acknowledge that forensic analysis has established that the account-opening signatures were not that party’s and that forgery perpetrators are being actively sought. 22. The Appellant submitted that as per the DCI Investigation Bureau internal memo dated 11th March 2025 forwarded to the Respondents vide a letter dated 3rd April 2025, which memo named the suspect other than the Appellant, he firmly believed that, drawing from the aforementioned, the Appellant was a victim of circumstances in a situation where an alleged perpetrator had been identified. 23. The Appellant submitted that within the meaning of Section 2 of the East African Community Customs Management Act (EACCMA) the Respondent identified wire transfers but never identified any actual goods physically brought into Kenya, as there were no import entry forms, no manifests, no customs records, or anything showing that goods entered Kenya and were attributable to the Appellant. He affirmed that, without an actual importation of goods within Section 2 of EACCMA, there was no subject matter upon which customs duty could be legally arise. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 7 of 25 24. He submitted that the Respondent bypassed the entire statutory gateway entirely and moved from wire transfers directly to a tax demand, thereby ignoring the prerequisite taxable event that the Act mandates. 25. The Appellant submitted that, flowing from the evidence established, including through the Respondent ‘s own department communications,the accounts were opened fraudulently without the Appellant’s knowledge or authority, and that a named third party was operating these accounts; the monies credited there were never the Appellant’s income. It argued that to tax the deposits as the Appellant’s income is to tax the victim of fraud for the proceeds of the fraudsters. He submitted that such a result was not only unjust, but was unsupported by any principles of income tax law. 26. The Appellant submitted that the Respondent’s banking analysis was predicated on the assumption that the individual under assessment was the true owner and operator of the disputed accounts, an assumption that has been forensically refuted. He submitted further that a fundamental principle is that an analytical framework built upon an erroneous premise cannot yield a valid conclusion. 27. The Appellant averred that while the Tribunal in Kirin Pipes Ltd vs Commissioner, TAT Appeal E116 of 2024(2025) KETAT confirmed that unexplained bank deposits are presumed to be taxable income, the Tribunal equally acknowledged that this presumption is rebuttable. It submitted that in the present case, this presumption has been conclusively rebutted by three evidentiary pillars; a. An independent expert forensic report Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 8 of 25 b. The Respondent’s own Intelligence & Enforcement communications; c. A DCI communication explicitly identifying the third-party account operator by name. 28. It was the Appellant’s submission that, moving forward, the Tribunal’s jurisdiction under Section 229 of the EACCMA requires the Appellant to demonstrate, on a balance of probabilities, that the assessment is incorrect. He submitted that the High Court in the case of Maluki Kitili Mwenda upheld the TAT’s finding that, KRA being the party conducting the investigation and possessing the institutional tools to examine the relevant records, it could not simply rest on the bank analysis once the taxpayer raised a credible rebuttal. 29. The Appellant submitted that the Respondent has stated at paragraph 13 of its Statement of Facts that the identity theft claim was a fabrication. This allegation is entirely unsubstantiated, and that its claim cannot be reconciled with the DCI’s independent correspondence dated 12th February 2026 or with the fact that active investigations remain ongoing. 30. To buttress his argument, the Appellant relied on the following cases: - Kenya Revenue Authority v Maluki Kitili Mwendwa (2021) KEHC 4148 (KLR) (2021) eKLR - Hickman Motors Ltd v Canada - Mbuthia Macharia v Annah Mutua Ndwiga & Another Civil Appeal No. 297 of 2015(2017) eKLR b) Whether the invalidation of the Appellant’s Notice of Objection under Section 51(3)(c) of the Tax Procedures Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 9 of 25 Act, 2015 was lawful in the specific circumstances of this case. 31. The Appellant submitted that the Respondent’s invalidation of the Appellant’s Notice of Objection dated 10th January 2025 was unlawful on two fronts. Firstly, the documents that the Respondent demanded were not in the Appellant’s possession as they were within the institutional custody of the Directorate of Criminal Investigations, which is a separate government agency. Secondly, that even the DCI itself, as confirmed in the Respondent’s letter dated 4th February 2026, encountered significant difficulties in obtaining the exhibits from the Registrar of Companies and DTB Bank. 32. He submitted that if the DCI, with its full investigative powers, experienced delays obtaining those documents, it was wholly unreasonable and impracticable for the Respondent to have required a private citizen to produce them within seven days. He argued that no statutory or equitable principle supports requiring a taxpayer to produce documents that are not within his powers to obtain. 33. The Appellant submitted that the Tribunal addressed this point in the case of Tanad Transporters Ltd v Commissioner of Legal Services & Board Coordination (TAT Appeal No. E242 of 2023 (2024) KETAT 844 (KLR) where the Respondent’s imposition of impractical timelines was found to violate Section 4(3) (b) and 4(4)(b) of the Fair Administrative Action Act and Article 47 of the Constitution. In allowing the appeal and setting aside the objection decision, the Tribunal held that the Respondent: “Infringed the Appellant’s rights to a Fair Administrative Action as provided for under Section 4(3)(b) and 4(4) (b) of Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 10 of 25 the Fair Administrative Actions Act and Article 47 of the Constitution of Kenya when it imposed on the Appellant impractical timelines to produce further supporting documents” 34. He submitted that he was required to produce DCI documents within seven days, when the DCI itself could not produce them within months. 35. The Appellant submitted that the Respondent was in direct institutional communication with the DCI regarding the very documents demanded, which is confirmed by the Respondent’s letter dated 3rd April 2026, where it confirmed receiving official communication from the DCI Investigation Bureau and forwarded sample documents from their investigations. 36. The Appellant argued that a party who is in actual institutional reach of the very documents it demands from an objecting taxpayer cannot simultaneously rely on the taxpayer’s non-production of those documents to invalidate the objection. He contended that such conduct was an abuse of the administrative process. c) Whether the Objection Decision violates Article 47 of the Constitution and the Fair Administrative Action Act, 2015. 37. The Appellant submitted that Article 47 (1) of the Constitution of Kenya, 2010 guarantees every person the right to administrative action that is expeditious, efficient, lawful, reasonable, and procedurally fair. Further, that Section 4(3) of the Fair Administrative Action Act, 2015 specifically requires an administrator, where an administrative action is likely to Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 11 of 25 adversely affect a person’s rights, to give that person a reasonable opportunity to present their case and to consider all relevant material before making a decision. 38. The Appellant relied on the case of Samira Engineering Ltd & others v Kenya Revenue Authority, Nairobi Petition No. 54 of 2011 (2012) eKLR where the court held: “I wish to emphasize that Kenya Revenue Authority as the state agency charged with the collection of taxes is bound by the provision of the Bill of Rights to the fullest extent in the manner in which it administers the laws concerning the collection of taxes. The values contained in Article 10 must at all times permeate its findings and activities which it is mandated to carry out by statute” 39. It was the Appellant’s submission that where the State fails to place before the court the material upon which it relied, the action cannot be sustained. It stated that in this matter, the case of Samira also held that a tax demand issued in violation of Article 47(1) was void and quashed the consequential agency notices. He argued that this principle is not procedural cosmetics but is a substantive constitutional obligation. 40. The Appellant submitted that a violation of fair procedure is independently sufficient to vitiate a decision. He pointed out that the Objection Decision was dated 26th March 2025 while the DCI correspondence confirming that Kavit Shah was the fraudulent operator of the account was dated 11th March 2025 and was communicated to the Commissioner on the very date the domestic taxes assessment decision, dated 11th March 2025 was made. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 12 of 25 41. The Appellant averred that the period between 11th March, 2025 and 26th March 2025 was a full fifteen days before the customs objection decision. It argued that the Respondent had, in its institutional possession, for over two weeks, the DCI’s findings establishing that Kavit Shah was the fraudulent operator of the account, yet chose to confirm the Kshs 862,264,240.00 findings. 42. The Appellant submitted that even the Respondent’s Objection Decision letter, at paragraph 3.3, expressly conceded that the DCI provided a status report of the said ongoing investigations, in which they indicated that the matter was still under investigation.It argued therefore that the decision to confirm the tax liability was made at a time when the Respondent both acknowledged that investigations were ongoing and had in hand material forensic and investigative findings pointing away from the Appellant’s culpability, yet chose to proceed regardless. The Appellant’s Prayers 43. The Appellant prayed that the Tribunal: - a. Do set aside the decision of the Respondent dated 26th March 2025 and declare it unlawful, unfair and without merit. b. Direct the Respondent to reconsider the Appellant’s tax assessment by taking into account all relevant evidence, including the DCI forwarded documents. c. Order the Respondent to expunge all enforcement proceedings related to the impugned tax liabilities. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 13 of 25 d. Declare that the Respondent decision violated the Appellant’s right to a fair hearing and fair administrative action under the Constitution of Kenya, 2010. e. Award costs of this appeal to the Appellant. f. Grant such further orders that the Tribunal deems just and expedient in the circumstances. THE RESPONDENT’S CASE 44. The Respondent’s case is premised on its a. Statement of Facts dated 16th June 2025 and filed on 18th June 2025 together with the documentation attached thereto; b. Written Submissions dated 16th May 2026. 45. The Respondent averred that it commenced investigations against the Appellant on suspicion that the Appellant was engaged in a tax evasion scheme. 46. The Respondent stated in response to the Appellant’s grounds of Appeal that the Objection Decision dated 26th March 2025 was issued on the grounds that, despite the indulgence issued to the Appellant to provide documents from any court or investigative body clearing it from the ownership of the accounts, none was availed. 47. It averred that to date the Appellant has never availed any document from any investigation institution clearing it from the ownership and control of the accounts held at Diamond Trust Bank. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 14 of 25 48. The Respondent averred that it was important to note that the issue of there being identity theft was only raised after the initial investigation of the tax evasion was made and that the Appellant did not avail any documents to show that he had in 2016 reported any loss of documents, nor did he make any attempts during the said period to replace the documents. It argued that a simple replacement of some of the documents at that stage would have stopped the operationalization of the accounts with different documents. 49. The Respondent pointed out that the Appellant made the report to Kilimani Police Station way after the initial demand of 5th February 2019, as per OB Number 28/23/2019 and was part of the whole scheme to evade the taxes. 50. It asserted that while the Appellant contended that the matter was under investigation by the DCI, no conclusive findings or clearance from the DCI had been formally submitted to or received by the Commissioner to inform the Objection Decision. It argued therefore that, in the absence of such information, the Respondent acted lawfully and within its mandate by relying on the evidence on record to issue the decision. 51. The Respondent stated that the documents provided by the Directorate of Criminal Investigations indicated that the Appellant’s accounts were flagged by the Financial Reporting Centre on suspicion of being involved in money laundering and tax evasion schemes for the year 2017 and were therefore referred to the Respondent for tax evasion investigations. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 15 of 25 52. It stated that the DCI had indicated that the matter was pending investigations and that they were yet to confirm the accuracy of the allegations advanced by the Appellant. 53. The Respondent emphasized that the Appellant was duly offered the opportunity to lodge an objection and was even granted an extension of time to do so. However, the Appellant failed to validate its objection by providing the necessary supporting documents. It stated, therefore, that the Appellant’s assertion that the Respondent failed to consider or assess essential documents was unfounded. It asserted that the Appellant’s right to a fair administrative process was never violated, as all procedural safeguards were observed and the Appellant was given a fair opportunity to dispute the taxes assessed. 54. The Respondent reiterated that the burden of proof lies with the Appellant to substantiate any claims of non-ownership or lack of control over the accounts in question. It argued that the Appellant’s failure to discharge this burden reinforces the validity of the Respondent’s findings. It further noted that the Appellant’s delay in providing conclusive evidence, despite repeated opportunities, undermined its credibility and supports the Respondent’s position that the assessments were based on the best available information at the time. 55. The Respondent maintained that the tax assessments were issued in strict compliance with the provisions of the East Africa Community Customs Management Act (EACCMA) 2004 and that the Appellant’s non- compliance with statutory requirements rendered his objection invalid. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 16 of 25 56. The Respondent asserted that the grounds advanced therefore failed as no evidence of clearance from the Financial Reporting Centre nor the Directorate of Criminal Investigations had been availed. 57. In its written submission, the Respondent raised two issues for determination: a) Whether the Appellant has been discharged from tax and customs liability by virtue of the letter dated 12th February 2026. 58. The Respondent submitted that the central issue in this appeal arose from the analysis of bank accounts associated with the Appellant, which revealed transfers to overseas companies with a total customs value of Kshs 1,777,864,413.00. The Respondent therefore properly treated this amount as the customs value of imports and subjected it to import duty, VAT, IDF, and KRD to arrive at the assessed customs taxes. 59. In refuting the Appellant’s claim that the said bank accounts were being fraudulently operated in his name and that he had no knowledge of or involvement in its transactions, the Respondent stated that this preliminary finding related only to the account opening documents and did not extend to the operative documents of the accounts, including the cheques through which the imports were transacted. 60. The Respondent stated that the DCI’s preliminary findings were communicated to the Appellant via a letter which clearly stated that “Investigations are ongoing to establish persons who were involved in the forgery for recovery of taxes and subsequent prosecution of the perpetrators”. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 17 of 25 61. The Respondent pointed out that the Objection Decision dated 26th March 2025 was issued on the ground that, despite numerous indulgences granted to the Appellant, he failed to provide any document from the court or investigative body clearing him of ownership or control of the subject bank accounts. 62. The Respondent further pointed out that the letter dated 12th February 2026 did not clear the Appellant, as it merely indicated that investigations remained ongoing. It argued that a statement that investigations were pending could not and did not constitute an exoneration or a discharge of tax liability, and that to hold otherwise would allow any taxpayer facing an assessment to indefinitely avoid payment merely by invoking an ongoing investigation, regardless of whether any findings of innocence had been made. 63. The Respondent submitted that even up to now the Appellant does not possess any document that clears him of the offence and that the documents he sought to rely on invited further investigations. 64. The Respondent relied on the case of Republic v Kenya Revenue Authority; Proto Energy Ltd (Ex-parte) (Judicial Review Application E023 of 2021 (2022) KEHC (KLR) where the High Court held as follows; “The most significant justification for placing the burden of proof on the taxpayer is a practical consideration that the Commissioner cannot sustain the burden because he does not possess the needed evidence. Under the system of self-reporting tax liability, the taxpayer possesses the evidence relevant to the determination of tax liability. It is Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 18 of 25 simply fair to place the burden of persuasion on the taxpayer, given that he knows the facts relating to his liability, because the Commissioner must rely on circumstantial evidence, most of it coming from the taxpayer and the taxpayer’s records. The taxpayer must present a minimum amount of information necessary to support his position. The taxpayer’s evidence must meet this minimum threshold.” 65. The Respondent therefore submitted that, in the absence of a conclusive and unambiguous clearance from the DCI or a court of law, specifically confirming that the Appellant was not the beneficial owner of the accounts and did not authorize the impugned transactions, the Respondent was entitled to rely on the evidence on record, including bank statements and forensic findings, to confirm the tax assessment. 66. It therefore submitted that the Appellant failed to discharge the burden of proof placed upon him under Section 56 of the Tax Procedures Act 2015 and Section 229(6) of the EACCMA 2004 and that the letter dated 12th February 2026 did not vacate or otherwise affect the confirmed tax liability. b) Whether the Respondent’s decision was proper and the Appellant failed to discharge his burden of proof. 67. The Respondent submitted that having demonstrated that the letter of 12th February 2026 did not clear the Appellant from owning and operating the bank accounts, the next issue was now whether the Appellant did discharge his burden of demonstrating that the customs demand was not Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 19 of 25 proper. The Respondent relied on the following statutes to buttress its argument: - Section 30 of the Tax Appeals Tribunal Act - Section 107 of the Evidence Act (Cap 80) - Section 109 of the Evidence Act - Section 223 of the East Africa Community Customs Management Act (EACCMA,2004) 68. The Respondent reiterated that the issue of identity theft was only raised after the initial investigation of the tax evasion was made and that the Appellant did not avail any document to show that he had, in 2016, reported any loss of documents nor did he make any attempts during the said period to replace the documents.It stated further that a simple replacement of some of the documents at this stage would have stopped the operationalization of the accounts with different documents. 69. The Respondent rehashed its argument as stated in its Statement of Facts and reiterated that the grounds advanced by the Appellant failed, as no evidence of clearance from the Financial Reporting Centre or the Directorate of Criminal Investigation had been availed. The Respondent’s Prayers 70. The Respondent stated that without the clearance from the various investigation bodies, the Appellant remained the owner of the accounts and as such, the liability for tax stands. ISSUES FOR DETERMINATION Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 20 of 25 71. The Tribunal has considered the parties’ pleadings, documentation, and submissions and is of the view that this appeal raises two issues for determination. a. Whether the Appellant is the rightful person to bear the tax demand b. Whether the Respondent’s tax demand is justified ANALYSIS AND FINDINGS 72. Having established the two issues for determination, the Tribunal will proceed to analyse them as hereinunder. a. Whether the Appellant is the rightful person to bear the tax demand 73. The dispute arose following the Respondent’s Notice of Tax Investigation dated 5th February 2019 where the Appellant was put on notice for investigations for the offence of tax evasion on account of Apcon Developers allegedly belonging to the Appellant. The said notice accused the Appellant of failure to declare income amounting to Kshs 2,436,343,938.00. 74. The matter had been forwarded to the Directorate of Criminal Investigation following the Appellant’s claim that his motor vehicle was ransacked and vandalized and, in the process, he lost valuable documents which may have been used to fraudulently register an entity by the name Apcon Developers and bank accounts in the Appellant’s name at Diamond Trust Bank. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 21 of 25 75. From the documentation availed by both parties, the matter was taken over by the Directorate of Criminal Investigations (DCI) which conducted some forensic analysis of the Appellant’s and the persons who registered the company, and who operated the bank accounts at Diamond Trust Bank. 76. The Tribunal notes that even before the investigations were completed, the Respondent issued an Objection Decision dated 26th March, 2025. Further, the DCI’s investigation findings contained in the internal memo dated 11th March, 2025 concluded in its findings that: “Upon reviewing the file, the team (NIS, DCI, OAG and DPP) unanimously agreed to forward the fraudulently registered company using details of Lalji Vishram to KRA for failure to declare taxes” 77. A reading of this quote states that the company was fraudulently opened using the details of Lalji Vishram and does not mean that the Appellant was found culpable. 78. The Tribunal has similarly sighted the Respondent’s letter to the Appellant’s counsel dated 12th February 2026, which stated in part: - “Currently the investigations are ongoing, but based on your request vide your letter ref: GEN/008/2024 dated 9 th February 2026, the following was established during our preliminary investigations: The documents containing signatures i.e. known, questioned and specimens, were forwarded to DCI headquarters for Document Forensic Analysis. According to the report from the forensic document examiner, in his opinion, the signatures were “Dissimilar and Distinguishable. Investigations are ongoing Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 22 of 25 to establish persons who were involved in the forgery for recovery of taxes and subsequent prosecution of the perpetrators” 79. According to Black’s Law Dictionary, the terms Dissimilar and Distinguishable mean: Dissimilar: “Means not alike, different in nature, form, character, or quality. In legal usage, it often describes things that cannot reasonably be treated as the same because they lack relevant similarity.” Distinguishable: “Mean capable of being identified as different from something else” In law, it emphasizes that the two things may be compared and still separated based on clear relevant differences. 80. The Tribunal further notes that the DCI internal memo dated 11th March, 2025 that was received by the Respondent as evidenced by its received stamp of 3rd April 2025 identified one Kavit Shah as the person operating the accounts at Diamond Trust Bank and the CR 12, although it showed that the organization had been registered in the name of the Appellant, the signature both in the Bank accounts and the registrar of company was dissimilar and distinguishable from the Appellant. The Respondent has not denied the receipt of this internal memo from the DCI. Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 23 of 25 81. If then, the Respondent was aware of this position through the correspondence between itself and the DCI, why then did it demand tax from another party other than the one identified as involved in the company’s transactions and bank accounts? It is also worth noting that the Respondent’s Objection Decision was dated 25th March 2025 and yet the Respondent’s letter dated 12th February 2026 still spoke of investigations still ongoing to establish persons who were involved in the forgery for recovery of taxes and subsequent prosecution of the perpetrators. 82. It is evident from the investigative findings from the DCI and by the Respondent’s own admission that the Appellant is not responsible for the fraudulent activities and until the investigations are completed the Respondent cannot accuse the Appellant of tax evasion or demand the said tax from him. 83. Consequently, the Tribunal finds and holds that the Appellant is not the rightful person to bear the tax demand. b) Whether the Respondent’s Tax Demand is justified 84. Having established that the Appellant has not been found culpable for the offenses as alleged by the Respondent, the Respondent’s tax demand is therefore not justified FINAL DECISION 85. The upshot of the foregoing is that the appeal is meritorious and the Tribunal proceeds to issue the following orders: a. The Appeal be and is hereby allowed Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 24 of 25 b. The Respondent’s’ Objection Decision dated 25th March, 2025 be and is hereby set aside. c. Each party to bear its own costs. 86. It is so ordered. DATED and DELIVERED at NAIROBI this ………31st …..…... day of……… July....… 2026 ................................................................ DR. RODNEY ODHIAMBO OLUOCH CHAIRMAN ……………………………. ……..............…………….. ABDULLAHI M. DIRIYE DR. ERICK K’OMOLO MEMBER MEMBER Judgement TAT No. E422 of 2025 Laiji Vishram Hiram V Commissioner of Customs and Border Control Page 25 of 25