https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/268

**THE REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAT NO. E1396 OF 2025** **MURANG’A COUNTY GOVERNMENT……………………..…….APPELLANT/APPLICANT** **VERSUS** **COMMISSIONER OF DOMESTIC TAXES………………………….……….…. RESPONDENT** **RULING** 1. The Applicant filed a Notice of Motion dated 11th June 2026 and filed on 12th June 2026 seeking the following Orders: - 2. Spent 3. The Appellant be granted leave to file and serve a Supplementary Bundle of Documents out of time. 4. That the Supplementary Bundle of Documents filed pursuant to leave granted by this Honourable Tribunal be deemed as duly filed and served upon payment of the requisite fees. 5. That the costs of this Application be in the Appeal. 6. The Application, which is supported by an Affidavit sworn by Edwin Kimuyu, the Applicant’s Director of finance dated 11th June 2026 and filed on 12th June 2026, is premised on the following grounds: - 7. That the Appellant lodged this Appeal challenging the Respondent’s Objection Decision. 8. That during preparation for the hearing of the Appeal and upon further review of the audit, objection and reconciliation records, the Appellant identified additional documents which are material and necessary for the fair and effective determination of the Appeal. 9. That the additional documents are intended to assist the Honourable Tribunal in determining the real issues in controversy and in arriving at a just determination of the Appeal. 10. That the Appellant has prepared a supplementary bundle of documents containing the said documents and seeks leave of the Tribunal to file and rely upon them. 11. That no prejudice shall be occasioned to the Respondent if the orders sought are granted as the supplementary bundle shall be served upon the Respondent who shall have an opportunity to respond thereto. 12. That it is in interest of justice that all relevant documents be placed before the Tribunal for consideration. 13. That the Application has been made in good faith and without undue delay. 14. The Respondent filed a Notice of Preliminary Objection by Frankline Gichora, officer within the Respondent’s Independent review of Objections division dated 22nd June 2026 and filed on the same date citing the following as the grounds of opposition to the Application: - 15. That the Applicant has not demonstrated any reason why the said documents are being introduced during this late stage of appeal, yet the said documentation was in its possession. Further, the Applicant has not demonstrated that the said documents could not be obtained with any reasonable diligence. 16. That the Applicant being the custodian of its records has a statutory duty to ensure that the said information or records are furnished to the Respondent to enable it to determine any tax liability as provided under Section 23 of the Tax Procedures Act 2013. 17. That the reason furnished by the Appellant as justification for introduction of the said documents is that it stumbled upon the documents during preparation of the hearing. This is unfounded and unmerited as it is impossible to stumble on information that is in your possession. It only means that this information was in its possession, but the Appellant chose not to provide it contrary to Section 23 and 59 of the Tax Procedures Act 2015. 18. That the Respondent vide an email dated 29th September 2025 and 3rd October 2025 requested the Appellant to provide various records in support of its objection, but the Appellant failed /neglected to do so. 19. That the Appellant is seeking to fill gaps/ lacunae in its case by providing this additional information during the hearing of the case without any basis why the same was never availed during the objection stage despite being accorded the opportunity to do so. 20. That the Applicant's current attempt to adduce new documents at this stage is in contravention of the procedure on objections and appeals as provided for in Part VIII of the Tax Procedures Act and a violation of the Respondent's right to fair hearing as granted for in Article 50 of the Constitution of Kenya 2010. 21. That pursuant to the provisions of Section 51 of the Tax Procedures Act, gives the Commissioner the opportunity to review a Taxpayer’s Grounds of objection to a tax decision and the supporting documents and thus issue an objection Decision. In this case, the intended document was never issued at the Objection stage for the Commissioner's review. 22. That the Respondent will be highly prejudiced should the new document be admitted into evidence because the same is being introduced too late in the day, considering that the Commissioner's Objection Decision was issued on 20th October 2005. 23. That in further response to paragraph 7 of the supporting affidavit wish to state that: - Allowing the additional documents will have a direct implication on the assessments confirmed since the confirmation was on the basis that the Applicant did not avail any information. 1. That the application by the Applicant is untenable and only amounts to asking this Tribunal to rehear the Objection on behalf of the Respondent. **Applicant’s submissions** 1. The Applicant filed written submissions dated 25th of June 2026 on 29th June 2026 in support of the Notice of motion wherein it submitted that the fundamental duty of this Honourable Tribunal is to determine the correctness of the Respondent’s objection decision and ultimately arrive at the proper tax liability if any, due from the Appellant. 2. It submitted that the documents sought to be introduced neither introduce a new cause of action nor alter the nature of the Appeal. They comprise documents arising from the audit, objection and reconciliation process and bear directly on the issues already in controversy between the parties. 3. The Applicant respectfully submitted that where evidence is relevant, material and necessary for the just determination of a dispute, the Tribunal ought to lean in favour of its admission so that the Appeal is determined on its merits rather than on procedural technicalities. 4. It relied on the case of **China Railways No. 5 Engineering Group Co. Ltd v Commissioner of Domestic Taxes (Tax Appeal 197 of 2023)[2023] KETAT 977(KLR) and Sergon v Commissioner of Domestic Taxes [2024] KETAT 1076(KLR)** where the Tribunal affirmed that it possesses discretion to admit supplementary documents where such documents are necessary for fair determination of the dispute and that the interest of justice favoured the admission of documents and equally afforded the Respondent an opportunity to respond thereto. 5. The Applicant submitted that the documents are neither extraneous nor intended to fill gaps in the Applicant’s case. Rather, they are directly connected to the subject matter of the Appeal and will assist the Tribunal in determining the real issue in controversy. 6. It submitted that it was not inviting the tribunal to undertake a fresh objection review on behalf of the Commissioner. Rather the Tribunal was being called upon to exercise its statutory appellate jurisdiction by determining whether the Respondent’s Objection decision was correct on the basis of all relevant evidence placed before it. 7. The Applicant argued that the Respondent has not demonstrated any prejudice that cannot adequately be remedied by appropriate directions of this Tribunal. The supplementary documents have already been served upon the Respondent, who has had sufficient opportunity to review them, analyse their content and where necessary, file any supplementary response or rebuttal evidence. 8. It relied on article 159(2)(d) of the constitution to submit that the provision obligates courts and Tribunals to administer justice without undue regard to procedural technicalities. 9. It also relied on the following cases 10. **Raila Odinga & Others v IEBC & Others [2013] eKLR** 11. **Nicholas Kiptoo Arap Korir Salat v IEBC & 6 Others** **Respondent’s Submissions** 1. The Respondent filed its written submissions dated 22nd June 2026 where it submitted that the Applicant was seeking to introduce documents which were not considered at the review stage and that is highly prejudicial as it will have a direct implication on the assessments arrived at by the Respondent. 2. It relied on the case of **Alliance Tobacco Limited vs Commissioner of Legal Services [TAT Appeal No.42 of 2024]** to support the position that the guiding principle in application to amend pleadings is that the same will be liberally and freely permitted unless prejudice and injustice will be occasioned to the opposite party. 3. It relied on the case of **Mahamud v Mohamad & 3 Others [2018] KESC 62 (KLR)** where the supreme court highlighted the principles governing whether or not a Court can allow for the production of additional evidence by a party in suit. 4. The respondent submitted that the Appellant has not demonstrated to this Tribunal that the documents being introduced were not in its possession when it lodged its Objection and further when the Respondent severally requested for the said information. 5. It relied on the case of **Commissioner of income Tax-vs-Total Kenya Limited [2021] eKLR which cited the case of Wanjie & others v. Sakwa & Others {19841 KLR 275** in deciding whether or not to allow a litigant to file additional documents, considering the need for restricting reception of additional evidence under Rule 29 of the Court of Appeal Rules where the Court observed that the Rule does not authorise the admission of additional evidence for purpose of removing a lacunae and filing in gaps in evidence. 6. It submitted that the Tribunal frowned against a party introducing documents that were not considered during the Objection review stage in the case of **TAT/E1221/2024 Kuscco Housing co-operative Society Limited vs Kenya Revenue Authority.** 7. The Respondent further submitted that the Appellant has failed to demonstrate that it has met the Threshold to adduce additional documents in light of the reasons stated above and therefore the said application should fall on that premise. **Analysis and Findings** 1. The Tribunal has carefully considered the Applicant’s Notice of Motion dated 11th June 2026 and filed on 12th June 2026, the Supporting Affidavit thereto the Respondent's grounds of opposition and the applicable law. 2. The Tribunal notes that the Notice of Motion is primarily for the Appellant/Applicant seeking leave to file additional documents annexed thereto. The issue falling for determination is whether the Applicant has established sufficient cause to warrant leave to file and rely on a supplementary bundle of documents out of time. 3. The Applicant's case is that upon further review of its audit, objection, and reconciliation records during preparation for the hearing of this Appeal, it identified additional documents that are material to the determination of the dispute. It contended that the documents would assist the Tribunal in determining the real issues in controversy and that no prejudice will be suffered by the Respondent if the documents are admitted since the Respondent will have an opportunity to respond to them. 4. The Respondent opposed the Application on the basis that the documents sought to be introduced were always within the Applicant’s possession and control and that no plausible explanation has been offered as to why they were not availed during the audit and objection stages. The Respondent further argues that admission of the documents would undermine the statutory objection process established under the Tax Procedures Act and effectively require the Tribunal to undertake a fresh review of the objection contrary to law. 5. The Tribunal notes that under Sections 23 and 59 of the Tax Procedures Act, a taxpayer is under a statutory obligation to maintain, avail and furnish records required by the Commissioner for purposes of determining tax liability. Equally, Section 51 of the Tax Procedures Act contemplates that a taxpayer will place before the Commissioner all relevant documents and information in support of an objection so as to enable the Commissioner to make an informed objection decision. 6. It is settled that the Tribunal's jurisdiction under Section 3 of the Tax Appeals Tribunal Act is appellate in nature, confined to a review of the objection decision rendered by the Respondent. The scheme of the Tax Procedures Act, and in particular Section 51 thereof, is designed to ensure that disputes are ventilated and, where possible, resolved at the earliest opportunity through the objection process, with the taxpayer bearing the primary obligation to place before the Commissioner all material and documentary evidence in support of its objection within the stipulated timelines. 7. However, Section 13(6) of the TATA empowers the Tribunal to admit additional documents or additional grounds of appeal. It provides that: *The appellant shall, unless the Tribunal orders otherwise, be limited to the grounds stated in the appeal or documents to which the decision relates.* 1. Section 13(2) (d) of the TATA provides that the Appellant is mandated to file such other documents as may be necessary to enable the Tribunal to make a decision on the appeal. 2. Consequently, during preparation for the hearing of the Appeal and upon further review of the audit, objection and reconciliation records, the Appellant identified additional documents which are material and necessary for the fair and effective determination of the Appeal and made this Application. 3. The Supreme Court in**Mohamed Abdi Mahmud v Ahmed Abdullahi Mohamed & 3 Others [2018] eKLR** laid down the governing principles on allowing additional evidence in appellate courts in Kenya as follows: *“We therefore* *lay down the governing principles on allowing additional evidence in appellate courts in Kenya as follows:* 1. *The additional evidence must be directly relevant to the matter before the court and be in the interest of justice;* 2. *It must be such that, if given, it would influence or impact upon the result of the verdict, although it need not be decisive;* 3. *It is shown that it could not have been obtained with reasonable diligence for use at the trial, was not within the knowledge of, or could not have been produced at the time of the suit or petition by the party seeking to adduce the additional evidence;* 4. *Where the additional evidence sought to be adduced removes any vagueness or doubt over the case and has a direct bearing on the main issue in the suit;* 5. *The evidence must be credible in the sense that it is capable of belief;* 6. *The additional evidence must not be so voluminous making it difficult or impossible for the other party to respond effectively;* 7. *whether a party would reasonably have been aware of and procured the further evidence in the course of trial is an essential consideration to ensure fairness and due process;* 8. *Where the additional evidence discloses a strong prima facie case of willful deception of the Court; the Court must be satisfied that the additional evidence is not utilized for the purpose of removing lacunae and filling gaps in evidence. The Court must find the further evidence needful.* 9. *A party who has been unsuccessful at the trial must not seek to adduce additional evidence to, make a fresh case in appeal, fill up omissions or patch up the weak points in his/her case.* 10. *The court will consider the proportionality and prejudice of allowing the additional evidence. This requires the court to assess the balance between the significance of the additional evidence, on the one hand, and the need for the swift conduct of litigation together with any prejudice that might arise from the additional evidence on the other.”* 11. On the material before it, the Tribunal is not satisfied that the Applicant has discharged the burden of demonstrating a plausible explanation for the failure to avail the documents in question during the audit or objection stages. The documents, on the Applicant's own case, were generated in the ordinary course of its business operations and were, or ought reasonably to have been, within its possession and control at the material time. The explanation proffered is general in character and falls short of the specificity required to justify a departure from the ordinary rule that a taxpayer must place its case fully before the Commissioner during the objection process. 12. The Tribunal finds merit in the Respondent’s contention that the documents sought to be introduced were within the Applicant’s possession and control. Being the custodian of its own records, the Applicant bore the responsibility of availing such documents when requested by the Respondent during the audit and objection processes. The Applicant has not provided any exceptional circumstances explaining its failure to do so. 13. However, the Tribunal is also guided by Article 159(2)(d) of the Constitution which obligates courts and tribunals to administer justice without undue regard to procedural technicalities. While this provision does not excuse non-compliance with statutory obligations, it requires the Tribunal, where appropriate, to focus on substantive justice and the determination of disputes on their merits. 14. Having perused the supplementary bundle, the Tribunal notes that it contains, among other documents, employment records, payroll schedules, tax exemption certificates, gratuity records, utilization schedules, imprest surrender records, and evidence of tax payments. The tribunal is satisfied that these are not documents that introduce a new cause of action, a new assessment, or a fundamentally different dispute from that contained in the objection decision. Rather, they relate directly to the very issues that form the subject matter of the appeal and are intended to support the grounds already before the Tribunal. 15. The Tribunal, however, observes that the Supplementary Bundle also contains documents relating to withholding tax and withholding VAT. Upon reviewing the Statement of Facts and the Objection Decision, the Tribunal finds that the Appellant did not object to, nor raise any grounds of appeal concerning, withholding tax or withholding VAT. Consequently, those issues do not form part of the dispute before the Tribunal. While the Tribunal is inclined to admit additional evidence that is relevant to the issues under determination, it cannot permit the introduction of documents relating to matters that were neither objected to before the Commissioner nor pleaded in this Appeal. To do so would effectively expand the scope of the dispute beyond the confines of the objection decision and the grounds of appeal. Accordingly, the Tribunal finds that the documents relating to withholding tax and withholding VAT are irrelevant to the present proceedings and shall not form part of the record of the Appeal. 16. The Tribunal further notes that the Respondent has not demonstrated that it would suffer prejudice incapable of being remedied if the documents are admitted. Any prejudice that may arise can adequately be addressed by granting the Respondent sufficient opportunity to review the documents, file supplementary pleadings, produce additional evidence and make further submissions in response thereto. 17. In considering the principles set out by the Supreme Court in Mohamed Abdi Mahmud v Ahmed Abdullahi Mohamed & 3 Others [2018] eKLR, the Tribunal is satisfied that the documents sought to be introduced are directly relevant to the issues in dispute; are capable of influencing the determination of the appeal; are credible on their face; and do not introduce an entirely new case. While the Applicant has not satisfactorily explained the delay in producing the documents, the Tribunal is persuaded that the overriding interests of justice favour a determination of the dispute on the basis of all relevant material rather than the exclusion of potentially probative evidence. 18. The Tribunal is particularly mindful that the ultimate purpose of the appellate process is to ascertain the correct tax position. Excluding documents that may assist the Tribunal in arriving at a fair and just determination would, in the circumstances of this case, elevate procedural shortcomings above substantive justice. 19. Accordingly, the Tribunal finds that sufficient grounds exist for the exercise of its discretion under Section 13(6) of the Tax Appeals Tribunal Act and grants the Applicant leave to file and rely on the Supplementary Bundle of Documents while preserving the Respondent’s right to respond thereto. ### **Disposition** 1. Based on the foregoing, the Tribunal finds that the Application is partially meritorious and accordingly proceeds to issue the following Orders: - 2. The Notice of Motion Application dated 11th June 2026 and filed on 12th June 2026 be and is hereby partially allowed. 3. The Applicant is hereby allowed to file the additional documents as contained in Annextures MCG-SD-1, MCG-SD-2, MCG-SD-3, MCG-SD-4, MCG-SD-5, MCG-SD-6, MCG-SD-7 MCG-SD-8, MCG-SD-9 and MCG-SD-11 of the supplementary bundle of documents filed with the Notice of Motion dated 11th June 2026; 4. The additional documents as contained in Annextures MCG-SD-1, MCG-SD-2, MCG-SD-3, MCG-SD-4, MCG-SD-5, MCG-SD-6, MCG-SD-7, MCG-SD-8, MCG-SD-9 and MCG-SD-11 of the supplementary bundle of documents filed with the Notice of Motion dated 11th June 2026 be and are hereby deemed as dully filed; 5. The Applicant's prayer for leave to file and rely upon the documents contained in Annexure MCG-SD-10 of the supplementary bundle of documents filed with the Notice of Motion dated 11th June 2026 is hereby declined. 6. The Respondent shall be at liberty to file amended statement of facts and any additional documents if need be in response to the documents as contained in MCG-SD-1, MCG-SD-2, MCG-SD-3, MCG-SD-4, MCG-SD-5, MCG-SD-6, MCG-SD-7 MCG-SD-8, MCG-SD-9 and MCG-SD-11 of the supplementary bundle of documents filed with the Notice of Motion dated 11th June 2026 on or before 21st July 2026. 7. It is so ordered. **DATED AND DELIVERED AT NAIROBI THIS DAY OF 15TH JULY 2026.** **……………………………..….** **ROBERT M. MUTUMA** **CHAIRMAN** **……………………………… ……..….……..……………..** **JIMMY M. MALLA GLORIA A. OGAGA MEMBER MEMBER** **……………………………..….** **DR. TIMOTHY B. VIKIRU** **MEMBER**