https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/107

Sondu Steel and Cement Limited v Kenya Revenue Authority (Appeal 10127 of 2025) [2026] KETAT 107 (KLR) (26 June 2026) (Ruling) Neutral citation: [2026] KETAT 107 (KLR) Republic of Kenya In the Tax Appeal Tribunal Appeal 10127 of 2025 RM Mutuma, Chair, JM Malla, G Ogaga & T Vikiru, Members June 26, 2026 Between Sondu Steel And Cement Limited Appellant and Kenya Revenue Authority Respondent Ruling 1.The application herein vide a Notice of Motion application was filed under certificate of urgency by the Appellant on the 4th June 2026 under Sections 16 of the Tax Appeals Tribunal Act and the Tax Tribunal (Procedure) Rules . The application is supported by an Affidavit sworn by Dipen Kumar filed 4th June 2026, and seeks for the following orders:-i.Spentii.Spent.iii.That there be an order of stay of execution of the judgment dated 02/06/2026 in Tribunal Cause No. E1027 of 2025 herein, pending the hearing and determination of this application inter-partes.iv.That pending hearing and determination of the Application for Review, the Respondent be restrained from attaching, distraining, or collecting the disputed tax of Kshs. 23,255,504.v.That there be a stay of execution and setting aside of the execution proceedings.vi.That the costs of this application be provided for. 2.The application is premised on the following grounds as stated on the face of the application and in the Affidavit of Dipen Kumar:-a.That Vide a judgment delivered on June 2, 2026, in Cause No E1027 of 2025, this Honorable Tribunal dismissed the appeal of the Appellant’s in Cause No. E1027 of 2025.b.That the Applicant being aggrieved by the said judgment intends to prefer a review against the whole of the said judgment.c.That the Applicant herein has sufficient evidence to review the judgment delivered on June 2, 2026.d.That the Respondent herein has threatened execution in satisfaction of the decree and unless an order for stay of execution is granted, great prejudice will be caused to the Applicant.e.That the conduct of the applicant herein and/or his accountant has been in good faith and therefore threatening the applicant herein with the notice to close his accounts is a total ambush meant to frustrate the applicant and defeat the ends of justice.f.That in the event that an order of stay of execution is not granted to preserve the status quo, great financial loss will be caused to the Applicant, and the review will be rendered nugatory upon execution being levied against the applicant seeking a total of Kshs 23,255,504.00 which amount will be impossible to recover from the Respondent.g.That the application for review has overwhelming chances of success should it proceed to full hearing, and it would defeat justice if the applicant is not granted a stay of execution as this may render the ultimate judgment on review as a worthless paper bereft of any benefit.h.That the Applicant is willing to comply with any other orders of the court in case the review is not successful, to ensure that the Respondent is not prejudiced by any order for stay of execution.i.The Applicant has filed an Application for Review with meritorious grounds.j.That this application is brought without delay and is in good faith and from the foregoing, it is in the interest of justice that an order for stay be granted in favor of the applicant herein. 3.The Appellant/Applicant submitted to the Tribunal that the information relied upon by the Respondent for the excessive tax due is totally defective, unverifiable, unrealistic and unreliable. That this is based on the following facts ventilated on the applicant’s supporting affidavit dated June 10, 2026, and the annextures attached thereto:- Wrong etr machine relied upona.That the Applicant’s database with the authority clearly shows the codes for the ETR machine the applicant uses for the relevant period of time. In this case, the applicant reiterates under oath that in the entire period of the year 2024, he was operating ETR machine No. KRACU0100028909 and not KRACU0300002615, this can be clearly ascertained from the Respondent’s database, and the applicant herein challenges them to prove otherwise. That all the invoices for the year 2024 should therefore show the unique no. KRACU0100028909 and not any other, all invoices with different codes are therefore erroneously calculated and objected to..b.That the Respondent's assessment herein is based on invoices attributed to ETR machine No. KRACU0300002615. That the applicant has provided evidence in his supporting affidavit to prove the period of time he acquired ETR Machine No. KRACU0300002615. That the evidence generated from the Respondent proves that ETR machine No. KRACU0300002615 was acquired and activated on January 13, 2025, as per the attached annextures. That this alone is substantive evidence to review the judgment of the Tribunal as the figures are not factual/verifiable as the law demands. That the applicant could not generate invoices from the machine before acquiring and activating the same. Note that the activation is at the discretion of the Respondent herein which was done on January 13, 2026.c.The it has annexed the receipt for purchasing the ETR machine as well as SMS message from the respondent activating the ETR machine.d.That if any invoice was generated from the said ETR machine No. KRACU0300002615 as alleged in the year 2024 or any date prior to January 13, 2025, it is therefore very clear that the invoices could not have originated from the Applicant as he had not acquired the ETR KRACU0300002615 machine in 2024. QR-Code verification differs from actual figures on the face of receiptsa.That upon verification of QR codes on the receipts alleged as undeclared by the Respondent, the Applicant noted variances which can only be clarified by the Respondent herein, as annexed on the applicant’s affidavit, significant discrepancies between original receipts and the information reflected upon QR-code verification were noted as follows:-.i.Inflated transaction values:- the transaction values were inflated by millions of shillings. As illustrated by the applicant in his affidavit, for example, receipts valued at Kshs. 70,400 appear in the Respondent's records as Kshs. 7,040,000 upon scanning the QR code. That the variation extends to the total tax figures as well.ii.That the transaction dates and time also differ from the actual on the face of the receipts with most transactions generated on 13/11/2024 and 11/12/2024 at midnight (00.00 Hrs.). That this alone is suspicious on the face of the assessments as no one sells at midnight to customers.iii.The transactions also indicate different KRA Pin Numbers from the actual/correct Pin numbers on the face of the receipts. That the said KRA PIN Numbers cannot be traced on the applicant’s customer database.iv.That the Respondent contacted one of the alleged customers County Builders Limited (PIN No. P051381106K) on 20/5/2025 at 8:49Hrs at 15:56Hrs, he confirmed on 21/5/2025 that he had not transacted any business with the Applicant herein, the Respondent still pursued the same tax due upon the applicant. Duplicate and corrupted transactionsa.That as deponed by the applicant in his affidavit, most of the transactions in question herein are duplicated, the invoices purported to have generated from ETR machine KRACU0300002615 were actually generated in 2025 and taxes duly paid as per the figures on the face of the receipts, the same have been corrupted and contents changed/inflated resulting in the excessive assessments herein. That the Applicant has demonstrated the same in his affidavit. The appellant is of the opinion that the discrepancies might have been cause by computer/system errors from third party integration system. Invoice systematic numbering anomalies. (SSC006)a.That as deponed by the applicant there were anomalies on the sequence of the invoices. The invoices serial numbers are not aligned in the right/systematic sequence as they should be generated by an ETR machine with some of the numbers skipped. 4.The Applicant submitted that that such discrepancies are not minor clerical errors. They fundamentally alter the tax liability allegedly arising from the alleged transactions. That the existence of these inconsistencies demonstrates that the data relied upon by the Respondent was inaccurate and not verifiable thus rendering the assessment erroneous, inaccurate and unverifiable. 5.Therefore cumulatively, these discrepancies establish that the assessment cannot be relied upon without further scrutiny. That the Tribunal should therefore not entertain an assessment founded upon records whose accuracy is seriously contested by documentary evidence. 6.The Applicant submitted that the justice system requires information to be credible and verifiable, the evidence relied upon here by the Respondent raises verification questions thus cannot be relied upon based on the above sited discrepancies. That the authenticity and integrity of the records/data relied upon is questionable. 7.That the applicant therefore prays for burden of proof to be shifted to the Respondent to clarify on the raised issues before the Applicant can be overburdened with non-existing figures based on unreliable information. 8.The Appellant/Applicant maintains that the tax assessment issued was not properly founded in fact and law, and that the Judgment was reached based on unavailability of substantial evidence due to applicant’s representative’s inadvertence. 9.That the applicant apologizes for the same and prays for the Tribunal to consider and scrutinize the provide evidence and review the Tribunal’s Judgment for June 2, 2026 in accordance with statutory provisions. 10.The Appellant prays that the Tribunal allows the application dated June 4, 2026, and review the Judgment delivered on June 2, 2026 to allow the Appeal as the Applicant has demonstrated substantial discrepancies on the alleged figures. 11.That the Tribunal allows the appeal dated September 17, 2025, as prayed and grant costs to the appellant/applicant and any such further or other orders as the Tribunal may deem fit. Respondent’s Response 12.The Respondent opposed the Notice of Motion application by filing its Grounds of Opposition on 11th June 2026. The Respondent did not file written submissions. The Respondent laid down the following grounds in opposition:-a.That the Application is incompetent, bad in law, fatally defective and is an abuse of this Honourable Tribunal’s process.b.That no credible reason has been advanced by the Applicant to warrant review at Section 29A of the Tax Appeals Tribunal Act.c.That an application of this nature requires an Applicant to prove;i.upon the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within the knowledge of the applicant or could not be produced by the applicant at the time when the decree was passed or the order was made;ii.on account of some mistake or error apparent on the face of the record; oriii.for any other sufficient reason.d.That the Appellant has not presented any of the grounds above, no new evidence has been presented; no mistake or error has been raised or any other sufficient reason.e.That this is an attempt for the Appellant to reopen the case after a determination has been found by this Honourable Tribunal.f.That the Tribunal after delivery of its judgement on 2nd June 2026 became functus officio regarding the substance of the Appeal.g.The Respondent submitted that Equity aids the vigilant and not the indolent. The Appellant has other avenues to obtain the prayers sought.h.That this Application is an afterthought and a delay tactic which holds substantial Government Revenue.i.That the Applicant has not demonstrated that it deserves favourable discretion of this Tribunal and the Application should be dismissed with costs to the Respondent. Analysis and Findings 13.The Tribunal has been moved vide the Applicant’s Notice of Motion application filed on 4th June 2026 to review its judgment delivered on 2nd June 2026. 14.The Applicant’s grounds are that it has sufficient evidence to warrant review of the Judgement. That the said Judgment was reached based on unavailability of substantial evidence, a situation that arose due to the applicant’s representative’s inadvertence. 15.The Applicant further stated that it is upon reviewing the said judgement that it became clear to it that the information relied upon by the Respondent for the excessive tax due is totally defective, unverifiable, unrealistic and unreliable. The Applicant submitted in detail on the inconsistencies in the information relied upon by the Respondent in raising the assessment and attached documents in support of the Application for review. 16.It is on the foregoing basis that the Applicant has made an application for review of the judgement of the Tribunal delivered on 2nd June 2026 in Appeal No. TATC E1027 of 2025. 17.Having reviewed the grounds of review and opposition and submissions filed by the Applicant, the Tribunal proceeds to analyse whether the review is merited as below. 18.The Tribunal’s powers to review its Decrees or Orders are as set out under Section 29A of the TATA which provides as follows:“ (1)a person aggrieved by a decree or an order from which no appeal has been preferred from the Tribunal to the High Court, may apply for review of the decree or the order within seven days from the date the decree or order was made by the Tribunal. (2)Applications for review of decree or orders under subsection (1) may be made – a)upon the discovery of new or important matter or evidence which after the exercise of due diligence, was not within the knowledge of the applicant or could not be produced by the applicant at the time when the decree was passed or the order was made; b)on account of some mistake or error apparent on the face of the record; or c)for any other sufficient reason.” 19.On 2nd June, 2026 the Tribunal delivered its Judgement in respect of TAT Appeal NO. E1027 OF 2025 wherein it decreed that the Appeal lacked merit and proceeded to make its Orders as set out below:“Final decision53.The upshot of the above analysis is that the Tribunal finds that the Appeal is not merited. The Tribunal accordingly proceeds issue the following Orders:(a)The Appeal be and is hereby dismissed.(b)The Objection decision dated 21st August 2025 be and is hereby upheld.(c)Each party to bear its own cost.54. It is so Ordered.” 20.The Tribunal notes that the Applicant has made an application for the review by the Tribunal of its Orders within the statutory limit of seven (7) days pursuant to and in compliance with Section 29A(1) of the TATA, the Tribunal therefore has the jurisdiction to consider the Application. 21.The TATA specifically refers to the issue of review of decrees or orders. In order for the Tribunal to consider the matter in its full merits it must consider whether it is capable of doing so first and will therefore rely on the following holding by Mativo J in the case Bethuel Omondi Okal vs. Managing Director KPLC & Co. [2017] eKLR where the decision in National Bank of Kenya Ltd vs. Ndungu Njau (1996) KLR 469 (CAK) was upheld at page 381 :“A review may be granted whenever the Court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established.” 22.The Tribunal notes that in the instant case, the Applicant has not pointed out any apparent error or omission on its part. Instead the Applicant has in its application noted that the Tribunal’s decision was arrived at due to lack of sufficient evidence to discharge the burden of proof that rested upon it. 23.The Applicant’s application for review is therefore founded on the omission of crucial evidence in which case the Applicant is enjoined to demonstrate that it had either discovered new or important matter or evidence which after the exercise of due diligence, was not within its knowledge or could not be produced by the applicant at the time when the decree was passed or the order was made. 24.The Applicant has infact admitted that the evidence was in its possession only that it was left out due to the inadvertence of its representative. The Applicant has not made any effort to proof that the production of documents which it now seeks to rely on was not within its means at the time when the decision was made. In the absence of evidence demonstrating that the Applicant was constrained so as not to have provided the evidence, it follows that the Applicant failed to present its case competently at the Appeal stage and is now seeking an opportunity to reopen its case to patch up its evidence in the hope of getting a favorable determination. This is clearly not the intention of Section 29A(2) of TATA. 25.The Applicant is inviting the Tribunal to set aside its judgement and admit new evidence which was at all material times within the Applicant’s possession, this is not the import of Section 29A above. In effect, this is akin to the Applicant inviting the Tribunal to sit on Appeal on its own Judgement. Once the Tribunal delivered its reasoned judgement it became functus officio. As was stated in Telkom Kenya Limited v John Ochanda:“functus officio is an enduring principle of law that prevents the re-opening of a matter before a court that rendered the final decision thereon.” 26.Tribunal finds and holds that the Applicant has not satisfied the threshold to warrant the Tribunal to review its own decision. Disposition 27.The upshot of the foregoing is that the application is unmerited and the Tribunal accordingly proceeds to issue the following Orders:-a)The Notice of Motion application dated 4th June 2026 be and is hereby dismissed.b)The Tribunal upholds its Judgement delivered in TAT No. 1027 of 2025 on 2nd June 2026.c)No orders as to costs. 28.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 26TH DAY OF JUNE 2026.ROBERT M. MUTUMACHAIRMAN………………………………JIMMY M. MALLA.MEMBER………………………………GLORIA A. OGAGAMEMBER………………………………DR. TIMOTHY B. VIKIRUMEMBER