https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/231

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E1090/2025 MEKELO COMPANY LIMITED VS KENYA REVENUE AUTHORITY JUDGMENT # BACKGROUND 1. The Appellant is a private limited company duly incorporated in Kenya under the provisions of the Companies Act whose principal activity is mounting sign posts, event organization and advertisement. 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 reviewed the Appellant’s vatable income and subjected the same to VAT amounting to Ksh.2,211,048 for the period 2020 to 2024. 4. The Appellant lodged an application to for late objection vide letter dated 11th June 2025. 5. The Respondent rejected late objection and confirmed the assessment on 24th June 2025. 6. Dissatisfied by the Respondent’s decision, the Appellant filed this appeal vide the Notice of appeal dated and filed 1st October 2025. # THE APPEAL 1. The Appeal is premised on the Memorandum of Appeal dated 1st October 2025 and filed on even date raising the following grounds of appeal: 1. The lateness was not deliberate. The client suffered sabotage from a former staff who was dismissed on grounds of misconduct. Consequently, the email that the Appellant was using to communicate with the Respondent mokellokambi@gmail.com was not receiving emails. The situation remained unnoticed until May 2025 when some clients complained that their emails had not been responded to. Unable to receive emails and regain control of the email address the Appellant resorted to opening a new email being info@mekelo.coke. 2. The Appellant instantly went physically to the offices of the Respondent informed the Respondent on the predicament and updated the new email address which the Respondent did not oppose. 3. Unfortunately, the Respondent had already issued an assessment on 7' March 2025 and communicated the same to the Appellant through the crashed email which the Appellant did not receive. 4. The Appellant lodged a late objection to the Respondent on 11th June 2025 which was declined hence this appeal. 5. The Respondent, in declining to accept the late objection considered the period 7th March 2025 to 11th June 2025 to and failed to consider that the Appellant was not able to receive emails until May 2025 and immediately the problem was identified, the Appellant swiftly visited the Respondent's office physically, created another email, and lodged objection without delay. 6. The test of lateness subjected to the late objection by the commissioner on the letter of 29.1.2014 under section 51(7) of TPA, 2015 falls to consider all facts, was biased and subjective. 7. PURSUANT to Rule 3(2) and 4(1) of Tax Appeals Tribunal Rules, 2015, the Appellant attaches * + - A copy of Rejection Notice - A copy of Notice to Appeal - A copy of Statements of Facts # THE APPELLANT’S CASE 1. In support of the appeal, the Appellant relied on its Statement of facts dated 1st October, 2025 and filed on even date. 2. The Appellant stated that, in order to comply with statutory filing deadlines, it filed nil tax returns whenever its books of accounts had not been balanced by the due dates. It explained that the nil returns were intended to be temporary and that accurate returns would subsequently be filed once the books had been finalized. According to the Appellant, this occurred during the tax periods 2020–2021, 2021–2022, 2022–2023, and 2023–2024, after which it filed the correct returns for those periods and paid the corresponding income tax liabilities in 2025. 3. The Appellant contended that the Respondent assessed VAT liabilities on the basis of the nil returns and failed to consider that those returns had only been filed temporarily pending submission of accurate returns. The Appellant further argued that despite filing the corrected returns and settling the related income tax liabilities, the Respondent did not amend the VAT assessments accordingly and could not have accurately arrived at a VAT assessment based solely on nil returns. 4. The Appellant stated that in late 2024 its company email account was breached and interfered with, rendering it incapable of receiving emails. It explained that it only became aware of the breach in May 2025, whereupon it immediately visited the Respondent’s offices, resolved the issue, and opened a new email account through which communication with the Respondent resumed. Following this, the Appellant discovered that the Respondent had issued an additional VAT assessment on 31 March 2025 and communicated the same via email, which the Appellant maintained it did not receive because of the email challenges caused by the breach. 5. The Appellant stated that upon learning of the assessment, it promptly sought an extension of time to lodge a late objection and explained the reasons for the delay to the Respondent. The Appellant expressed dissatisfaction that, through a communication dated 19 June 2025, the Respondent granted only two days within which to provide all supporting evidence, a period which it considered wholly inadequate. The Appellant further stated that only four days later, on 24 June 2025, the Respondent confirmed the assessment notwithstanding its request for additional time. 1. The Appellant contended that the Respondent continued to insist on payment of the assessed VAT despite its protest that the two-day period granted for compliance was unreasonable and insufficient. It further stated that it had since provided all the supporting documents requested by the Respondent and argued that the Respondent’s finding that the objection was late under section 51(7) of the Tax Procedures Act, 2015 failed to take into account all relevant facts and was therefore biased and subjective. The Appellant maintained that the two-day period did not constitute a reasonable time within the circumstances. 2. In conclusion, the Appellant prayed that the Tribunal set aside the Respondent’s decision confirming the assessment and direct the Respondent to admit and consider the Appellant’s late objection. # Appellant’s Prayers 1. The Appellant prayed for the following reliefs: 1. Tribunal sets aside the rejection and 2. directs other Respondent to accept the late objection then Amend the Value Added Tax liability as per the supporting documents. # THE RESPONDENT’S CASE 1. The Respondent’s case was premised on its Statement of facts dated 15th April 2026 and filed on 24th April 2026 and its written submissions dated 30th April 2026 and filed on 4th May 2026. 2. The Respondent stated that the Appeal arose from its decision dated 24 June 2025 rejecting the Appellant’s application for an extension of time within which to lodge a notice of objection against an assessment. 3. The Respondent stated that the Appellant had filed nil returns despite having taxable revenue and that, upon reviewing the Appellant’s vatable income, it assessed VAT amounting to Kshs. 2,211,048 for the period between 2020 and 2024. 1. The Respondent stated that the Appellant subsequently lodged an application for leave to file a late objection through a letter dated 11 June 2025. According to the Respondent, it requested the Appellant, through an email dated 18 June 2025, to provide supporting documents and evidence in support of the reasons advanced for the late objection by 21 June 2025. 2. The Respondent stated that the Appellant failed to provide the requested information, thereby leaving it with no option but to reject the application for extension of time through a rejection notice issued on 24 June 2025. Dissatisfied with that decision, the Appellant proceeded to file the present Appeal. 3. The Respondent denied the Appellant’s allegation that the period granted to furnish supporting information was insufficient. It maintained that the Appellant ought to have submitted all supporting information and evidence at the time of lodging the application for extension of time. 4. The Respondent stated that under Section 51(6) of the Tax Procedures Act, a taxpayer who fails to lodge a notice of objection within the prescribed period may apply for an extension of time, but such extension can only be granted where the taxpayer demonstrates that the delay resulted from absence from Kenya, sickness, or another reasonable cause, and that the application was made without unreasonable delay after the cessation of those circumstances. 5. The Respondent contended that the Appellant failed to satisfy these mandatory statutory requirements for the grant of an extension of time. It stated that when the Appellant lodged its application, it neither provided reasons for the delay nor responded to the Respondent’s email of 18 June 2025 requesting explanations and supporting evidence. 6. The Respondent further stated that despite being guided and afforded an opportunity to justify the late objection, the Appellant squandered that opportunity and ignored the Respondent’s directions. It argued that had the Appellant in fact responded to the email of 18 June 2025, it could easily have produced a copy of that response before the Tribunal for examination and determination as to whether the reasons advanced were justified. 7. The Respondent asserted that the Appellant was raising explanations for the delay for the first time before the Tribunal and that it could not therefore be faulted for rejecting the application without having had an opportunity to consider those explanations. The Respondent further argued that for the Tribunal to consider those reasons in the first instance would amount to usurping the Respondent’s statutory discretion. 1. The Respondent maintained that it properly exercised its discretion in determining that the Appellant had failed to provide any explanation or evidence in support of its application to lodge an objection out of time. It further contended that the Appellant failed to furnish documentary or credible evidence to substantiate the reasons for the delay despite Sections 30 of the Tax Appeals Tribunal Act and 56(1) of the Tax Procedures Act placing the burden upon the Appellant to demonstrate that the Respondent’s decision was incorrect. 2. The Respondent argued that mere assertions unsupported by evidence could not form a basis for the exercise of discretion in favour of the Appellant. It maintained that its decision was lawful, rational, procedurally fair, and consistent with established legal principles, emphasizing that the discretion to extend time is not automatic but must be exercised judiciously. 3. The Respondent further stated that the Appellant had failed to demonstrate any illegality, misdirection, unreasonableness, or impropriety in the Respondent’s decision. On the contrary, it maintained that it had demonstrated that the Appellant never responded to the email requesting explanations and evidence in support of the delay. 4. The Respondent contended that allowing the Appeal would undermine statutory timelines and the principles of certainty and finality in tax administration and would set an undesirable precedent encouraging non- compliance with clear legal deadlines. 5. The Respondent further argued that the Appeal offended the provisions of Section 13 of the Tax Appeals Tribunal Act and indicated that it intended to raise a preliminary objection on that basis. 6. The Respondent concluded by maintaining that it acted lawfully, reasonably, and within the statutory framework in declining the Appellant’s application for extension of time. 7. The Respondent submitted that the Appeal was incompetent and improperly before the Tribunal because the Appellant failed to comply with the statutory timelines prescribed under Sections 12 and 13 of the Tax Appeals Tribunal Act. It submitted that having received the rejection notice on 24 June 2025, the Appellant ought to have filed its Notice of Appeal by 5 August 2025 and its Memorandum of Appeal by 26 August 2025. However, both documents were filed on 1 October 2025 without leave of the Tribunal, more than one month out of time. The Respondent therefore urged the Tribunal to strike out the Appeal. 1. The Respondent submitted that the timelines for lodging appeals are mandatory and not merely procedural guidelines. In support of this position, it relied on ***Joseph Ondiek Tumbo v Sony Sugar Co. Ltd [2014] eKLR***, where the Court cited ***Costellow v Somerset County Council (1993) 1 All ER 952*** and emphasized that prescribed timelines are requirements to be met and not mere targets or expressions of hope. 2. The Respondent further submitted that where Parliament has established a specific procedure for redress, such procedure must be followed strictly. It relied on ***W.E.C. Lines Ltd v Commissioner of Domestic Taxes, TAT Appeal No. 247 of 2020***, where the Tribunal held that special statutory procedures must be strictly adhered to whenever they exist. 3. The Respondent submitted that compliance with statutory timelines is a jurisdictional issue. In support of this proposition, it relied on ***Patrick Kiruja Kithinji v Victor Mugira Marete [2015] eKLR***, where the Court of Appeal held that whether an appeal is filed within time goes directly to the jurisdiction of the Court and that only appeals filed within time or with leave of the Court can be entertained. 4. The Respondent further submitted that because the Appeal was filed out of time and without leave, the Tribunal lacked jurisdiction to determine it. It relied on the celebrated decision in ***Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR***, where the Court held that jurisdiction is everything and that once a court finds it lacks jurisdiction, it must immediately down its tools. 5. The Respondent submitted that the Appellant’s failure to comply with statutory timelines was not a mere procedural defect capable of being cured under Article 159(2)(d) of the Constitution. It argued that the failure constituted a violation of express statutory provisions and therefore rendered the Appeal fatally defective. Consequently, the Tribunal was urged to strike out the Appeal for want of jurisdiction. 6. Turning to the merits of the dispute, the Respondent submitted that the Appeal arose from its decision dated 24 June 2025 rejecting the Appellant’s application for extension of time to lodge a notice of objection against a VAT assessment. It submitted that the Appellant had filed nil returns despite having taxable revenue and that following a review of the Appellant’s vatable income, VAT amounting to Kshs. 2,211,048 was assessed for the period 2020 to 2024. 7. The Respondent submitted that there was no dispute that the Appellant’s objection had been lodged outside the statutory thirty-day period prescribed under Section 51(2) of the Tax Procedures Act. It argued that although Section 51(6) and (7) of the Tax Procedures Act permits a taxpayer to apply for an extension of time, such extension can only be granted where the taxpayer demonstrates reasonable cause for the delay and provides supporting evidence. 8. The Respondent submitted that two elements must exist before the Commissioner can exercise discretion under Section 51(7) of the Tax Procedures Act, namely a written application for extension of time and evidence demonstrating reasonable cause for the delay. It argued that although the Appellant lodged an application for extension of time, it failed to provide any supporting documents to substantiate its reasons. 9. The Respondent submitted that through an email dated 18 June 2025 it requested the Appellant to furnish supporting documentation by 21 June 2025. According to the Respondent, the Appellant failed to provide the requested information, leaving it with no option but to reject the application for extension of time on 24 June 2025. 10. The Respondent rejected the Appellant’s contention that the period granted to provide supporting documents was insufficient. It submitted that the Appellant ought to have supplied supporting evidence at the time of lodging the application itself and not after prompting by the Respondent. 11. The Respondent submitted that the Appellant failed to satisfy the mandatory conditions for extension of time because it neither provided reasons for the delay nor responded to the Respondent’s email requesting supporting evidence. It argued that despite being guided and given an opportunity to justify the delay, the Appellant squandered that opportunity. 12. The Respondent further submitted that discretion cannot be exercised in a vacuum. It argued that discretion must be exercised on the basis of material placed before the decision-maker and that where no material is supplied, the Commissioner cannot speculate or manufacture reasons on behalf of a taxpayer. 13. In support of this position, the Respondent relied on ***Republic v Commissioner of Domestic Taxes Ex Parte Mayfair Insurance Company Limited [2019] eKLR***, where the High Court held that compliance with Section 51 of the Tax Procedures Act is mandatory and that failure to adhere to statutory timelines renders an objection invalid. 14. The Respondent also relied on ***Speaker of the National Assembly v*** ***Karume [1992] KLR 21*** for the proposition that where a statute has established a clear procedure for redress, that procedure must be strictly followed. 1. The Respondent submitted that the objection process established under Section 51 of the Tax Procedures Act is the exclusive statutory mechanism through which a taxpayer may challenge an assessment. It argued that the process is mandatory and follows a sequential framework of assessment, valid objection, objection decision, and finally appeal. 2. The Respondent submitted that because the Appellant’s objection was never validly admitted, there was no valid objection capable of determination under Section 51(8) of the Tax Procedures Act. It argued that what was issued on 24 June 2025 was merely a rejection of an application to file a late objection and not a determination on the merits of a valid objection. 3. The Respondent relied on ***Commissioner of Domestic Taxes v Barclays Bank of Kenya Limited [2018] eKLR*** and submitted that tax statutes must be strictly construed and that courts and tribunals cannot rewrite statutory requirements under the guise of interpretation. 4. The Respondent submitted that permitting a taxpayer who failed to comply with statutory timelines and failed to justify the delay to nevertheless invoke the objection process would amount to rewriting Section 51 of the Tax Procedures Act. It argued that tax administration requires certainty and finality and that statutory timelines are essential to orderly revenue collection. 5. The Respondent further submitted that the Appellant failed to comply with Sections 51(2) and 51(7) of the Tax Procedures Act and that consequently the assessment remained valid and enforceable. 6. The Respondent relied on ***Eldo-Rosta Construction Limited v Commissioner of Domestic Taxes (Tax Appeal E459 of 2023) [2024] KETAT 1277 (KLR)***, where the Tribunal held that a taxpayer seeking extension of time must provide supporting evidence and that mere allegations without proof cannot justify the exercise of discretion in the taxpayer’s favour. 7. The Respondent also relied on ***CMC Aviation Ltd v Cruisair Ltd (1) [1978] KLR 103***, where the Court held that pleadings are not evidence and that allegations remain unproven until supported by evidence. It submitted that the Appellant merely made assertions without furnishing any proof of the circumstances allegedly causing the delay. 8. The Respondent submitted that if indeed the Appellant had responded to the email of 18 June 2025, nothing would have been easier than producing a copy of that response before the Tribunal. It argued that the Appellant was introducing explanations for the delay for the first time before the Tribunal and that the Respondent could not therefore be faulted for rejecting the application in the absence of those explanations. 1. The Respondent submitted that for the Tribunal to consider the reasons for delay in the first instance would amount to usurping the Commissioner’s statutory discretion. It maintained that it properly exercised its discretion in finding that the Appellant failed to provide sufficient explanation and evidence to support the application for extension of time. 2. The Respondent submitted that once an objection is not lodged in accordance with Section 51 of the Tax Procedures Act, the assessment becomes confirmed by operation of law. It argued that because the Appellant neither lodged a valid objection within time nor properly invoked Section 51(7), there was no valid objection capable of consideration and the assessment consequently stood confirmed. 3. In support of this position, the Respondent relied on ***Republic v Kenya Revenue Authority Ex Parte Style Industries Limited [2019] eKLR***, where the High Court reaffirmed that statutory timelines in tax disputes are substantive legal requirements and not mere procedural technicalities. 4. The Respondent again relied on ***Speaker of the National Assembly v Karume [1992] KLR 21*** and submitted that where Parliament has prescribed a specific mechanism for redress, parties must strictly comply with it and cannot seek equitable relief outside the statutory framework. 5. The Respondent submitted that even if the Tribunal were to consider the Appeal on its merits, the burden of proof remained squarely upon the Appellant. It submitted that the Appellant was required to prove both that the reasons for the late objection were valid and that the assessment was excessive or erroneous. 6. The Respondent relied on Section 56(1) of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act and submitted that the burden rests upon the taxpayer to demonstrate that the Respondent’s decision is incorrect. It argued that the assessment enjoys a rebuttable presumption of correctness unless displaced by credible evidence. 7. The Respondent submitted that the Appellant failed to furnish any documentary or credible evidence to support its reasons for delay and therefore failed to discharge its statutory burden of proof. It argued that bare assertions without evidence cannot justify the exercise of discretion in favour of a taxpayer. 1. The Respondent submitted that its decision was lawful, rational, procedurally fair, and consistent with established legal principles. It further submitted that the discretion to extend time is not automatic and must be exercised judiciously upon consideration of the evidence presented. 2. The Respondent submitted that the Appellant had failed to demonstrate any illegality, irrationality, procedural impropriety, or unreasonableness in the Respondent’s decision. On the contrary, it maintained that it had demonstrated that the Appellant failed to respond to the request for supporting evidence. 3. Finally, the Respondent submitted that allowing the Appeal would undermine statutory timelines and the principles of certainty and finality in tax administration by encouraging non-compliance with legal deadlines. It therefore urged the Tribunal to find that it acted lawfully and within the statutory framework, dismiss the Appeal in its entirety, uphold the rejection of the Appellant’s application for extension of time, and award costs to the Respondent. # Respondent’s Prayers 1. Based on the above grounds, the Respondent prayed that: 2. Tribunal dismiss the Appeal in its entirety, 3. Uphold the Commissioner’s decision rejecting the application for late objection, and 4. Award costs to the Respondent. # ISSUE FOR DETERMINATION 1. The Tribunal has considered the parties’ pleadings and submissions, and has identified the following issue for determination; **Whether the Tribunal has jurisdiction to determine the Appeal** # ANALYSIS AND FINDINGS 1. Having identified the issue for determination, the Tribunal proceeds to analyse the same as hereunder: - # Whether the Tribunal has jurisdiction to determine the Appeal 1. The dispute arose from the Respondent’s review of the Appellant’s vatable income for the period 2020 to 2024, during which it established that the Appellant had been filing nil VAT returns despite having taxable revenue. Upon completion of the review, the Respondent assessed additional VAT amounting to Kshs. 2,211,048 covering the years 2020 to 2024. 1. According to the Appellant, during late 2024 its official email account became inaccessible after it was allegedly breached, resulting in the Appellant being unable to receive communications from the Respondent. The Appellant maintained that the problem remained undetected until May 2025 when it discovered the email difficulties and subsequently created a new email address to restore communication. 2. On 31 March 2025, the Respondent issued an additional VAT assessment arising from the review of the Appellant’s tax affairs. The assessment was communicated electronically, although the Appellant contended that it did not receive the communication because of the email challenges it was experiencing at the time. 3. Following the discovery of the assessment, the Appellant lodged an application dated 11 June 2025 seeking leave to file a late notice of objection and explained that the delay had been occasioned by the email problems. 4. On 18 June 2025, the Respondent requested the Appellant to provide supporting documents and evidence in support of the application for extension of time and required the same to be furnished by 21 June 2025. The Respondent later maintained that the Appellant failed to provide the requested evidence within the stipulated period. 5. Consequently, on 24 June 2025, the Respondent rejected the Appellant’s application for extension of time and confirmed the assessment on the ground that the Appellant had failed to demonstrate reasonable cause for the delay as required under Section 51(7) of the Tax Procedures Act. 6. Dissatisfied with the rejection decision, the Appellant filed a Notice of Appeal and subsequently lodged the present Appeal on 1 October 2025, seeking to set aside the rejection notice and compel the Respondent to admit the late objection and reconsider the VAT assessment. 7. The Tribunal notes that under Section 51(2) of the TPA, a taxpayer has a statutory duty to object to the assessment within thirty days. On the other hand, Section 51(6) of the TPA grants a taxpayer leeway to seek for extension of time to lodge a notice of objection with Section 51(7) providing grounds upon which such leave may be granted. 8. In this Appeal, apart from filing its objection late with the Respondent, the Appellant equally approached the Tribunal outside the stipulated legal timeframe. This is because whereas Section 51(12) provides that a taxpayer seeking to challenge the Respondent’s decision must do so within thirty (30) days, the Appellant upon being served with a rejection notice on 24th June 2025 lodged a Notice of Appeal at the Tribunal on 1st October 2025 and without leave of the Tribunal as provided for under Section 13(3) and (4) of the TAT Act. 9. The Tribunal notes that it is without jurisdiction when a party appears before it and does so outside the set legal timelines. The Tribunal relies on the # case of Felister Wakonyo Waruhiu vs. Joseph Wachira Mwangi, Civil **Appeal No. 8 of 2013,** where in regards to an appeal filed out of time, the Court of Appeal held that; *“Can the overriding objective of this Court be invoked to save the appeal? We are of the view that the competency of the appeal goes to the jurisdiction of this Court and cannot be cured by the overriding objective 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.”* 1. Similarly, the Tribunal is guided by the findings of **Nyarangi J in the *locus classicus*** case of **Owners of Motor Vessel “Lilian S” v Caltex Oil (K) Limited [1989] eKLR** where the Court observed that, jurisdiction is everything without it, a court must down its tools. Consequently, the Tribunal can only strike out the appeal. 1. The Tribunal recognizes that striking out of an appeal has been described as draconian option. However, the Tribunal having established that it does not have jurisdiction to determine the appeal it must down its tools. # FINAL DECISION 1. The upshot of the foregoing is that the Appeal is incompetent and the Tribunal proceeds to make the following Orders: 2. The Appeal be and is hereby struck out. 3. Each party shall bear its own costs. 4. It is so ordered # DATED AND DELIVERED AT NAIROBI THIS 6TH DAY OF JULY, 2026 SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. EUNICE NJERI NGANGA HON. SANKALE SPENCER OLOLCHIKE** **HON. BERNADETTE MUTHIRA GITARI** **HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-07-06 17:41:06