https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/83

Salu Chainlinks Ltd v Kenya Revenue Authority (Tax Appeal E695 of 2025) [2026] KETAT 83 (KLR) (5 June 2026) (Judgment) Neutral citation: [2026] KETAT 83 (KLR) Republic of Kenya In the Tax Appeal Tribunal Tax Appeal E695 of 2025 RO Oluoch, Chair, Cynthia B. Mayaka, E Komolo & AM Diriye, Members June 5, 2026 Between Salu Chainlinks Ltd Appellant and Kenya Revenue Authority Respondent Judgment Background 1.The Appellant is a limited liability company incorporated in Kenya. 2.The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act. The Kenya Revenue Authority is an agency of the Government of Kenya mandated with the duty of collection and receipting of all tax revenue, and the administration and enforcement of all tax laws set out in parts 1 & 2 of the First Schedule to the Act, including assessing, collecting, and accounting for all tax revenues in accordance with those laws. 3.On 30th January, 2025, the Respondent issued the Appellant with additional VAT assessments for December 2022, 2023 and 2024, and income tax assessments for the years 2022 and 2023. 4.On 7th March, 2025, the Appellant objected to the Respondent’s additional assessments. 5.On 5th May, 2025, the Respondent issued its Objection Decision confirming the additional VAT and income tax assessments. 6.On 9 th July, 2025, the Appellant lodged this Appeal, with leave of the Tribunal, vide its Notice of Appeal dated 13th June 2025. The Appeal 7.In its Memorandum of Appeal filed on 9th July, 2025, the Appellant raised the following grounds of appeal: -a.That the Respondent erred in computing both income and VAT from income derived from other sources.b.That the Respondent erred in issuing erroneous, irrational and unreasonable assessments given the circumstances. Appellant’s Case 8.The Appellant’s case is based on its Statement of Facts filed on 9th July 2025, in which it solely averred that the Respondent in issuing demand dated 22nd February 2023 demanded VAT that had already been declared and paid for in the previous months. As such, the Appellant also challenged the Respondent’s decision to add interest and penalties on the principal amounts charged. Appellant’s Prayers 9.The Appellant prayed to the Tribunal for the following orders: -a.The Appeal be allowed.b.The Tribunal be pleased to grant any other orders it deems fit.c.The costs of the Appeal be awarded to the Appellant. Respondent’s Case 10.The Respondent filed its Statement of Facts dated 6th August, 2025 and Written Submissions dated 25th March, 2026 in opposition to the Appeal. 11.The Respondent averred that it undertook a review of the Appellant’s operations to ascertain whether it was declaring the correct taxes as required by the law. Upon conclusion of the review, it was established that the Appellant failed to account for its VAT tax liabilities for the periods 2022 to 2024. 12.The Respondent further averred that the objection review, it requested the Appellant to provide the following documents: -a.Audited financial accounts for the periods under review.b.Certified bank statements for the period under review.c.Detailed sales and purchase ledgers.d.Reconciliation analysis of the purchases made.e.Stock analysis and stock valuation report. 13.The Respondent submitted that the Appellant failed to provide the requested documents leading to issuance of its Objection Decision on 5th May 2025 confirming the assessments entirely. 14.The Respondent relied on Section 56(1) of the Tax Procedures Act to argue that the Appellant bore burden of proof, which it has not discharged. 15.In its Written Submissions, the Respondent reiterated that the Appellant had not discharged its burden of proof and sought to rely on several precedents including CMC Aviation Ltd vs Cruisair Ltd (1) (1978) KLR; Kenya Revenue Authority -vs- Man Diesel & Turbo Se Kenya (2021) eKLR amongst others. Respondent’s Prayers 16.The Respondent prayed to the Tribunal for the following orders: -a.The Appeal be dismissed with costs as it lacks merit.b.The Respondent’s Objection Decision dated 5 th May, 2025 be upheld. Issues For Determination 17.The Tribunal having considered the parties' pleadings, submissions and documents filed before it is of the view that the issue that falls for its determination is whether the Respondent’s Objection Decision dated 5th May, 2025 is justified. Analysis And Determination 18.This Appeal is premised on the Respondent’s Objection Decision dated 5th May, 2025, which confirmed additional income tax and VAT assessments of the Appellant of Kshs. 22,199,309.32. The Respondent justified its Objection Decision on the singular ground that the Appellant did not support its grounds of objection by providing the requested documents. 19.In opposition to the additional assessments, the Appellant submitted primarily that the Respondent in issuing its demand dated 22nd February 2023, demanded VAT that had already been declared and paid for in the previous months. 20.The Tribunal has considered the rival submissions. It is not contested that in the process of reviewing the Appellant’s objection, the Respondent sought the following documents from the Appellant as outlined in the Objection Decision dated 5th May 2025: -a.Audited Financial Accounts for the period under review.b.Certified bank statements for the period under review.c.Detailed sales and purchases ledgers for the periods under review.d.Reconciliation analysis of the purchases made for the period under review.e.Stock analysis and stock valuation report.f.Any other supporting evidence. 21.It is equally not rebutted that the Appellant did not provide the documents outlined above. 22.The Tribunal is guided by the applicable law obligating parties in tax matters to produce relevant documents in reviewing assessments. In particular, Section 59 of the Tax Procedures Act (cap 469B) provides as follows regarding the Appellant’s duty to produce documents and records as may be sought by the Respondent: - 1.For the purposes of obtaining full information in respect of the tax liability of any person or class of persons, or for any other purposes relating to a tax law, the Commissioner or an authorised officer may require any person, by notice in writing, to – a.produce for examination, at such time and place as may be specified in the notice, any documents (including in electronic format) that are in the person's custody or under the person's control relating to the tax liability of any person;b.furnish information relating to the tax liability of any person in the manner and by the time as specified in the notice; orc.attend, at the time and place specified in the notice, for the purpose of giving evidence in respect of any matter or transaction appearing to be relevant to the tax liability of any person. 23.Besides, Section 56 (1) of the Tax Procedures Act (cap 469B), which provides as follows regarding the Appellant’s burden of proof: -In any proceedings under this Part, the burden shall be on the taxpayer to prove that a tax decision is incorrect. 24.Furthermore, Section 30 of the Tax Appeals Tribunal Act (cap 469A) provides as follows on the Appellant’s burden of proof: -In a proceeding before the Tribunal, the appellant has the burden of proving—(a)where an appeal relates to an assessment, that the assessment is excessive; or(b)in any other case, that the tax decision should not have been made or should have been made differently. 25.The Tribunal is also guided by its precedents on production of documents and the obligation of the parties to discharge their burdens of proof in tax matters. In Abyssinia Iron and Steel Ltd -vs- Commissioner of Customs and Border Control (TAT No. 435 of 2022), the Tribunal held as follows: -The bottom line is that once the Appellant has provided evidence that the Respondent's assessment was wrong, then the Respondent must push back and show that its assessment was not arbitrary, capricious, or imagined. The onus will then shift back to the Appellant once the Respondent has discharged its burden on a balance of convenience to discharge the prima facie case that has been presented by the Respondent. 26.The Tribunal, in Mugo -vs- Commissioner of Domestic Taxes (TAT E918 of 2024) KETAT 374 (KLR), also held as follows:As noted herein above, the Appellant failed to adduce positive documents to demonstrate that the Respondent’s decision was incorrect. Consequently, the Tribunal finds and holds that the Respondent’s decision was justified and the Appellant failed to discharge burden of proof contrary to Section 30 of the Tax Appeals Tribunal Act, 2013 (TATA) and Section 56(1) of the Tax Procedures Act, thus the Appeals is not successful.” 27.The Tribunal having considered the pleadings and records before it in thisAppeal, it is apparent that the Appellant did not provide the relevant documents requested by the Respondent to support its objection and discharge its burden of proof in the first instance in accordance with the above statutory provisions. Thus, the Respondent was justified to disallow the Appellant’s objection as outlined in its Objection Decision dated 5th May, 2025. Disposition 28.The upshot of the foregoing analysis is that the Tribunal finds and holds that the Appeal lacks merit and proceeds to issue the following orders: -a.The Appeal be and is hereby dismissed.b.The Respondent’s Objection Decision dated 5 th May, 2025 be and is hereby upheld.c.Each Party is to bear its own costs. 29.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 5TH DAY OF JUNE 2026HON. DR. RODNEY O.OLUOCH HON. CYNTHIA MAYAKAHON. DR. ERICK ONYANGO KOMOLOHON. ABDULLAHI DIRIYETAX APPEALS TRIBUNALDATE: 2026-06-05 14:52:11