https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/246

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E358/2025 POLASSERVICESLIMITED VS STATE CORPORATIONS APPEAL TRIBUNAL JUDGMENT # BACKGROUND 1. The Appellant is a private limited company incorporated in Kenya. 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 subjected the Appellant to a tax audit for the years 2020,2021,2022,2023 and 2024 in respect of income tax; and VAT for: September, October, November, and December 2020; January, March and May 2021; September and December 2023; and March, April, and May 2024. 4. The audit revealed certain discrepancies, leading to the issuance of an additional assessment dated 16th December 2024 in relation to income tax assessment and another assessment dated 18th December 2024 in relation to VAT. The Appellant objected to the assessment via a notice of objection dated 14th January 2025. 5. Subsequently, the Respondent issued an Objection decision dated 13th March 2025, demanding a tax of Kshs 24,853,842. The Appellant being dissatisfied with the objection decision, lodged a Notice of appeal dated 13th April 2025. # THE APPEAL 1. The Appellant lodged its Memorandum of appeal dated and filed on 13th April 2025 wherein the Appellant raised the following grounds of appeal: 1. That the Respondent erred in law and in fact by failing to consider the Taxpayer's documents and explanations before issuing the objection decision which confirmed an amount of Kshs 24,853,842 inclusive of penalties and interest. 2. That the Respondent erred in law and in fact by failing to provide a basis for the assessment to enable the Taxpayer object from an informed position. 3. That the Respondent erred in law and in fact by failing to use all available information at its disposal in the default assessment of tax provided under Section 29 of the Tax procedures Act Cap 469B(TPA), but instead selectively used information that would impose the biggest tax burden of the taxpayers rather than giving an objective assessment. 4. That the supporting documentary evidence for expenses incurred is available and the application requesting to be accorded an opportunity to produce the same verification by the Respondent. # THE APPELLANT’S CASE 1. The Appellant relied on its Statement of facts filed on 13th April 2025. It did not file written submissions. 2. The Appellant stated that it was issued with the additional assessment on 16th December 2024 and 18th December 2024 in respect of income tax and VAT. It also stated that the Respondent served it with notice for compliance verification letter dated on 13th March 2025, specifying the documents required for review contract award letters. 3. In support of its case, the Appellant relied on the following documents: 4. A number of receipts; 5. Invoice dated 30th May 2022, 10th October 2022,21st June 2022, 22nd March 2022, 14th March 2022, 10th March 2022, 20th April 2022, and 9th May 2022; 6. Fiscal receipt dated 8th November 2023; 7. Cash sale receipt dated 18th March 2021, 11th March 2021, 6th May 2021, 29th April 2021, 7th May 2021, 9th April 2021, 5th May 2021, 22nd April 2021, 1st May 2021,8th May 2021, 21st April 2021; and 8. Bank statements for the year 2018, and 2019. 9. The Appellant stated that it provided the bank statements, sample purchases invoices, sample sales invoices and contract award letters. 10. According to the Appellant, the assessments is excessive and wrong since it disallowed purchases that were incurred and that the supporting documents provided were not considered. It therefore contended that it was not accorded fair hearing and a fair administrative justice. 11. The Appellant asserted that the assessment of the Respondent is not only adverse to the going concern of the appellant's business, but also the Respondent itself. The Appellant averred that if this unfair tax liability was to be imposed on the Appellant, it would negatively affect its cash flow and affect the operations of the business adversely. The Appellant therefore, maintained that it is the interest of the Appellant that the documents provided be considered. 1. The Appellant contended that it has shown willingness to co-operate and comply with that which as required by the law and very much willing to pay tax that will be fairly charged. # Appellant’s prayer 1. The Appellant prayed that the appeal be fairly considered. # THE RESPONDENT’S CASE 1. In response to the appeal, the Respondent lodged its Statement of facts dated and filed on 13th August 2025. The Respondent did not file written submissions. 2. The Respondent’s averred that it established that the purchase invoices claimed in the Appellant's VAT additional assessments in the filed returns were based on duplicate invoices. It contended that the Appellant failed to provide supporting documents that are required under Section 17(3) of the Value Added Tax Act Cap 476 (VATA). 3. The Respondent cited Section 43 of the VATA which mandates the taxpayer to keep records. 4. The Respondent further averred that it did not err in law or fact in confirming the VAT Assessments due to lack of supporting documentation. It stated that it is empowered by Section 31(1) (b) and Section 29 of the TPA to amend the assessment based on the information available to it and to the best of its judgement. 5. The Respondent stated that it is allowed by Section 24(2) of the TPA to assess a taxpayer's liability using any information available. It stated that it operated within the confines of the law by using the data available following a return review. 1. The Respondent averred that the Appellant’s objection was rejected pursuant to Section 51(3) of the TPA as the Appellant failed to support its objection by providing all the relevant documents relating to the objection. It contended that the Appellant failed to comply with Section 51(3) of the TPA which left the Respondent with no choice than to reject the Appellant's objection application. 2. According to the Respondent, there is no evidence that the Respondent did not review documents provided. The Respondent contended that the Appellant has not submitted evidence to show that it presented evidence to the Respondent. 3. The Respondent relied on Section 56(1) of the 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."* 4. It maintained that the tax assessment issued was properly founded in fact and law, and that the objection decision was fair, reasonable, and made in accordance with statutory provisions. # Respondent’s prayers 1. Based on the foregoing, the Respondent prayed as follows: 2. The tax assessment as confirmed by the objection decision be upheld; and 3. The appeal be dismissed with costs. # ISSUES FOR DETERMINATION 1. The Tribunal has considered the pleadings and made by the parties, and considers the issues for determination as follows: 2. Whether the appeal is valid; and 3. Whether the Respondent was justified in confirming the assessments. # ANALYSIS AND FINDINGS 1. Having identified the issues for determination, the Tribunal proceeds to analyse the same as hereunder; # a. Whether the appeal is valid 1. Whereas it appears from the pleadings that the Respondent issued an objection decision dated 13th March 2025, the Objection decision was not on record neither was it on CTS. 2. Section 13 of the Tax Appeals Tribunal Act Cap 469A(TATA) mandates the taxpayer submit to the Tribunal, the appealable decision. In particular, Section 13(2)(c) thereof provides as follows: *(2) The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the Tribunal, of—* 1. *a memorandum of appeal;* 2. *statements of facts; and* 3. ***the appealable decision****; and* 4. *such other documents as may be necessary to enable the Tribunal to make a decision on the appeal.* 5. Section 13 (2) of the TATA employs the word ‘shall.‘ It is therefore stated in mandatory terms meaning that all documents thereunder must be filed. The Tribunal has evaluated the pleadings filed by the Appellant and what stood out was that the objection decision was neither filed nor placed on record. 6. Further, the Tax Appeals Tribunals (Procedure) Rules, 2015 mandates the taxpayer to file the tax decision. Rule 4(1)(d) provide that:- *4(1) A memorandum of appeal referred in rule 3(2) shall—* *(d) be accompanied by a copy of the—* 1. ***tax decision****; and* 2. *notice of appeal.* 3. In **Nat General Merchants Limited v Commissioner of Domestic Taxes [2026] KETAT 53 (KLR)** The Tribunal while considering a similar matter stated as follows: *It is clear from the above provisions of law that a tax decision should accompany and be filed alongside an Appellant’s Memorandum of Appeal and Statement of Facts. The reason for this is simple: the Tribunal/Court would find itself in a quandary if it were invited to determine an Appeal emanating from a tax/objection decision that it has not sighted.* 1. Further, in the case of **Aspire Kenya Limited v Commissioner of Domestic Taxes [2025] KETAT 245 (KLR)** this Tribunal stated thus: *“The provisions of Section 13 (2) (c) of the TATA are crafted in peremptory terms and ought to be adhered to in a very strict sense, to the extent that the Tribunal would have no business or jurisdiction to entertain an appeal where the Appellant has not presented an appealable decision, as is the case here. Premised on the foregoing, the appeal is improperly before the Tribunal and is untenable and ought to be struck out.’’* 1. In the absence of an appealable decision, the Tribunal has nothing to review, set aside, or uphold. It is unclear whether a decision was made in the first place. As such, the Tribunal does not have a decision over which it can exercise jurisdiction. The Appellant has to put its house in order before approaching this Tribunal. This appeal is ripe for stricking out. 2. Having established the foregoing, the second issue for determination is hereby rendered moot. # FINAL DECISION 1. The upshot to the foregoing is that the Tribunal finds and holds that the Appeal is invalid and makes the following orders: - 2. The Appeal be and is hereby struck out; and 3. Each party to bear its own cost. 4. It is so ordered. **DATED** and **DELIVERED** at **NAIROBI** this 19TH DAY OF MAY **2026** SIGNED BY/FOR: HON. ROBERT MUGAMBI MUTUMA (CHAIRPERSON) HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER HON. BILLY GRAHAM OKUMU MIJUNGU **★ TH E JUDICIAR Y O F KENY A ★** **HON. ROBERT MUGAMBI MUTUMA (CHAIRPERSON) HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-05-19 17:16:44