[2023] KETAT 520 (KLR)

Waruhiu Construction Limited v Commissioner of Domestic Taxes (Tax Appeal 583 of 2022) [2023] KETAT 520 (KLR) (4 August 2023) (Judgment)

Neutral citation: [2023] KETAT 520 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal 583 of 2022

E.N Wafula, Chair, Cynthia B. Mayaka, Grace Mukuha, Jephthah Njagi & AK Kiprotich, Members

August 4, 2023

Between

Waruhiu Construction Limited

Appellant

and

Commissioner of Domestic Taxes

Respondent

Judgment

Background 1. The Appellant is a limited liability company incorporated in Kenya whose principal business activity is engaging in general construction works.

2. The Respondent is a principal officer appointed under and in accordance with Section 13 of the Kenya Revenue Authority (KRA) Act, and the Kenya Revenue Authority is charged with the responsibility of among others, assessment, collection, accounting and the general administration of tax revenue on behalf of the Government of Kenya.

3. On 3rd March 2020 the Respondent, through its Nairobi Office, wrote to the Appellant requesting for records and information pursuant to Section 59(1) of the Tax Procedures Act, 2015.

4. On 26th June 2020 the Respondent made an immediate tax demand of Kshs. 109,563. 167; Kshs. 55,776,890. 00 relating to VAT and Kshs. 53,786,277. 00 relating to Corporation tax.

5. On 18th September 2020 the Respondent through its Nakuru Office issued additional assessments through the iTax portal for VAT totaling Kshs. 18,624,902. 00 covering the months of November 2017, November 2018 and November 2019.

6. On 24th September 2020, the Respondent through its Nakuru office again issued additional assessments through the iTax portal for VAT amounting to Kshs. 23,055,762. 00 covering the month of October 2016. On the same date, the Respondent also issued additional assessments for Corporation tax amounting to Kshs. 45,621,017. 00 for the period 2016 to 2019.

7. On 25th September 2020 the Appellant objected to the assessments in its letter received by the Respondent on 28th September 2020 together with all supporting documentation. The Appellant was advised that the objection application also be uploaded on the iTax portal.

8. The Appellant, while uploading the above stated objection, noted further additional assessments that were issued on 2nd October 2018 for VAT totaling to Kshs 1,391,824. 00. The Appellant proceeded to also file an objection application against these assessments on 6th October 2020.

9. The Appellant wrote a follow up letter dated 20th January 2022 to the Respondent.

10. On 3rd March 2022, the Respondent communicated that objection decisions for the Appellant's applications had since been issued.

11. On 11th March 2022, the Appellant wrote to the Respondent seeking concurrence on the objection application being allowed due to passage of time

12. Thereafter, the Appellant filed a Notice of Appeal on 2nd June 2022.

The Appeal 13. The Appeal is premised on the following grounds as stated in the Memorandum of Appeal dated 2nd June 2022 and filed on 3rd June 2022:-a.That the Objection decision is invalid because it was not made and communicated within 60 days of a valid objection having been lodged by the Appellant contrary to Section 51(11) of the Tax Procedures Act;b.That the effect of failing to respond to the Objection lodged by the Appellant within 60 days, resulted in the Objection being allowed pursuant to Section 51 of the Tax Procedures Act;c.That the Respondent failed to follow proper procedure thereby violating the Petitioner’s right to fair administrative action; andd.That the Respondent erred by failing to consider all information, documents and explanations provided by the Appellant to address the disputed estimated additional assessments.

Appellant’s Case 14. The Appellant’s case is premised on the Appellant’s Statement of Facts dated 2nd June 2022 and filed on 3rd June 2022 together with the documents attached thereto.

15. That after the filing of the objection application dated 6th October 2020, the Appellant's Managing Director and principal person in the company fell sick and was diagnosed with Covid-19. That given the advanced age the Director took a while to respond to medication and was in isolation for a long time.That sample medication documentation relating to January 2021 is part of the Appellant's bundle of documents.

16. That the Respondent through the Nakuru Office continued to pursue the Appellant for payments and on 18th June 2021 even attempted to enter a payment plan for taxes which were still under objection and a validly lodged objection application was in place.

17. That upon recovery of the Managing Director, and with the assistance of a tax agent, the Appellant wrote a follow up letter dated 20th January 2022 to the Respondent reiterating that the assessments were erroneous and needed to be reviewed expeditiously.

18. That on 3rd March 2022, the Respondent communicated that objection decisions for the Appellant's applications had since been issued. That though in the correspondence it was indicated that the copies were attached, it was not until 7th March 2022 that the decisions bearing the dates of 4th December 2020 and 21st May 2021 were shared.

19. That the Appellant reviewed the contents of the correspondences, and it became clear that the objection applications had been accepted by the Respondent through the operation of the law under Section 51(11) of the Tax Procedures Act, 2015. That the Respondent had failed to make an objection decision within the statutory timelines of sixty (60) days.

20. That on 11th March 2022, the Appellant wrote to the Respondent seeking concurrence on the objection application being allowed due to passage of time, but no replies have been forthcoming. That this has prompted filing of this Appeal before this Honorable Tribunal.

a. That the objection decision is invalid because It was not made and communicated within 60 days of a valid objection having been lodged by the Appellant contrary to Section 51(11) of the Tax Procedures Act. 21. That the Respondent, through its decision dated 3rd March 2022. averred that the Appellant was issued with twelve (12) Value Added Tax (VAT) and four (4) Corporation tax assessments on various dates covering the period 2015 to 2019.

22. That the Respondent went ahead to state that objection decisions had been issued for seven (7) VAT assessments and the four (4) Corporation tax assessments.

23. That the Respondent then stated in the correspondence that copies of the said objection decisions were attached. That however, this was not done until 7th March 2022 when the copies were shared on a separate email.

24. That upon review of the said copies of objection decisions as received on 7th March 2022, the Appellant noted that the dates indicated on the communication were 4th December 2020 and 21st May 2021.

25. That the Respondent has been unable to confirm service of the said decisions to any of the Appellant's contacts. That this therefore forced the Appellant to maintain 3rd March 2022 and 7th March 2022 as the effective dates of service for the said objection decisions.

26. That, without prejudice to its earlier averments above, the Appellant submits that even by going with the indicated dates on the Respondent's correspondence, eight (8) of the 11 decisions would be statutorily time barred as follows:Period Tax Head Amount Date of Objection Date of Objection Decision No of Days

Oct-16 VAT 15,578,218 05/10/2020 21/05/2021 229

Nov-16 VAT 681,501 06/10/2020 04/12/2020 60

Aug-17 VAT 611,021 06/10/2020 04/12/2020 60

Nov-17 VAT 4,875,816 27/10/2020 21/05/2021 207

Oec-17 VAT 99,302 06/10/2020 04/12/2020 60

Nov-18 VAT 5,770,632 27/10/2020 21/05/2021 207

Nov-19 VAT 4,466,509 27/10/2020 21/05/2021 207

2016 - 2017 Corp Tax 9,776,566 28/09/2020 21/05/2021 236

2015 - 2016 Corp Tax 11,366,169 28/09/2020 21/05/2021 236

2018-2019 Corp Tax 5,914,287 28/09/2020 21/05/2021 236

2017-2018 Corp Tax 8,138,203 28/09/2020 21/05/2021 236

27. It is the submission of the Appellant that the effective date of service of the said decisions remains 3rd March 2022. That pursuant to Section 51(11) of the Tax Procedures Act, 2015, the Appellant's objections have been allowed by operation of the law. That the said decisions were communicated to the taxpayer as per the below timelines:Period Tax Head Amount Date of Objection Date of Objection Decision No of Days

Oct-16 VAT 15,578,218 05/10/2020 21/05/2021 514

Nov-16 VAT 681,501 06/10/2020 04/12/2020 514

Aug-17 VAT 611,021 06/10/2020 04/12/2020 515

Nov-17 VAT 4,875,816 27/10/2020 21/05/2021 495

Oec-17 VAT 99,302 06/10/2020 04/12/2020 517

Nov-18 VAT 5,770,632 27/10/2020 21/05/2021 497

Nov-19 VAT 4,466,509 27/10/2020 21/05/2021 498

2016 - 2017 Corp Tax 9,776,566 28/09/2020 21/05/2021 528

2015 - 2016 Corp Tax 11,366,169 28/09/2020 21/05/2021 529

2018-2019 Corp Tax 5,914,287 28/09/2020 21/05/2021 530

2017-2018 Corp Tax 8,138,203 28/09/2020 21/05/2021 531

28. The Appellant further noted that no objection decisions have been issued in respect of the following applications despite the statutory timelines having lapsed:Period Tax Head Amount Date of Objection Date of Objection Decision

Mar-18 VAT 579,000 11/05/2020 Not yet Issued

Apr-18 VAT 1,390,695 11/05/2020 Not yet Issued

May-18 VAT 517,132 11/05/2020 Not yet Issued

Jul-15 VAT 485,154 11/05/2020 Not yet Issued

Nov-15 VAT 151,375 11/05/2020 Not yet Issued

29. That in the case of Equity Group Holdings Limited vs. Commissioner of Domestic Taxes [2021] eKLR. the judge, at Paragraph 60, observed as follows:‖Section 51(II) of the TPA is couched in peremptory terms. Having correctly found that the decision was made after the expiry of 60 days, the TAT had no legal basis to proceed as it did and to invoke Article 759(2) (d). First, there was no decision at all. The decision had ceased to exist by operation of the law. Second, the provisions of section 51(II) (b) had kicked in. The Objection had by dint of the said provision been deemed as allowed. Third, the TAT had no discretion to either extend time or to entertain the matter further. Fourth, discretion follows the law, and a tribunal cannot purport to exercise discretion in clear breach of the law.‖

30. That the matter was brought to the attention of the Respondent on 11th March 2022. That however. the Respondent has continued to disregard, ignore and/ or neglect the Appellant's concerns culminating in the filing of this Appeal before this Honourable Tribunal.

31. It is the Appellant's submission that the decisions issued remain null and void through the operation of the law.

b. That the Respondent failed to follow proper procedure thereby violating the petitioners' right to fair administrative action. 32. That the Respondent sent out a combination of tax compliance findings and tax demands to the Appellant claiming that the Appellant had underpaid their taxes.

33. That in the letter dated 3rd March 2020. the Respondent requested for records from the Appellant dating back to January 2014. That the records were required to be availed by 12th March 2020 which is a period of 9 days. That this duration is not covered anywhere by any law but demonstrates the Respondent's intent to make it impossible for the Appellant to comply with the notice.

34. That while the Appellant worked tirelessly and made available the requested documents, the Respondent followed with a letter dated 26th June 2020 where an immediate demand was made for Kshs. 109,563. 167. 00.

35. That Section 31(4) of the TPA provides the circumstances under which the Commissioner may amend a taxpayer's tax assessment.

36. That upon carrying out the amendment, the Commissioner is required by Section 31 (8) of the TPA to take the following steps:―(8) When the Commissioner has made an amended assessment, he or she shall notify the taxpayer in writing of the amended assessment and specify-a.the amount assessed as tax or the deficit or excess input tax carried forward, as the case may be:b.any amount assessed as late payment penalty payable in respect of the tax assessed;c.any amount of late payment interest payable in respect of the tax assessed;d.the reporting period to which the assessment relates;e.the due date for payment of any tax, penalty or interest being a date that is not less than thirty days from the date the taxpayer received the notice; andf.the manner of objecting to the assessment.‖

37. That the Respondent ignored the above provisions and failed to give the Appellant a notice of the amended assessment as prescribed in law.

38. That the Respondent has inflated selective months with VAT assessments without any basis and thereby made it impossible for the Appellant to understand the source of the said omitted sales.

39. That in the month of October 2016, the Respondent raised an assessment of Kshs. 15,578,218. 00 as tax when the business has never achieved sales of that magnitude in a single month, leave alone VAT of that magnitude.

40. That in the case of Mohamed Ali t/a Top Model Apparels & 44 others vs. Kenya Revenue Authority [2020] eKLR the Court observed as follows:―Although the process for objecting to a tax decision is provided in the TPA. it is an express obligation of the Respondent to indicate the procedure whenever a tax decision has been made, and this obligation cannot be circumvented.‖

41. That the Appellant further noted that the said objection decisions did not disclose specific explanations on any gaps that were observed in the supporting documentation provided.

42. That in Local Production Kenya Ltd vs. Commissioner of Domestic Taxes, Tax Appeal No. 50 of 2017, the Tribunal was emphatic that by failing to give reasons for its decision, KRA had acted in violation of the taxpayer's right to fair administrative action.

43. That from the foregoing, the Respondent subjected the Appellant to a process shrouded in uncertainty while at the same time disregarding due process and available supporting documentation during the review of the tax affairs of the Appellant.

44. That to the extent that the Respondent failed to follow due process in issuance and enforcement of the above assessments, the same must be set aside in totality.

SUBPARA c) That the Respondent erred by failing to consider all information, documents and explanations provided by the Appellant to address the disputed estimated additional assessments. 45. That the Respondent attempted to equate annual inputs in VAT returns and the cost of sales in the Audited Financial Statements.

46. That the Appellant maintains that the comparison was misleading owing to the source of the inputs as well the different expense lines that are used to recognize the inputs.

47. It was the Appellant's position that inputs from non-VAT registered sources will not be captured in the VAT returns. That further, the Appellant's business being construction, the costs are driven by among other factors, casual labour and crude construction materials sourced from the public not necessarily registered for VAT.

48. That the Respondent proceeded to levy a non-existent penalty under Section 84(b) of the Tax Procedures Act thereby inflating the additional tax demanded.

49. That the Appellant provided supporting documentation together with reconciliations and kept them at the disposal of the Respondent throughout the review process.

50. That the Appellant held meetings with the Respondent in a quest to assist the Respondent best understand the issues in dispute.

51. That the Respondent refused, disregarded and/ or ignored to review the Appellant's grounds of objection together with supporting documentation which were readily available as stated in the chronology of events above.

52. That any dispute must be settled through reliance on the transaction documents relating to a specific entity as opposed to generalizations and screaming tax assessments which are not well anchored in any law. That it is clear from the correspondence of the Respondent that the additional taxes have not been explained nor specific gaps in documentation brought out.

53. That the Appellant has duly filed self-assessment returns and diligently paid all applicable taxes. That the Respondent has failed to defend the additional tax estimates after the Appellant facilitated full access to all documentation supporting the objection application.

54. That the immediate tax demand by the Respondent created a lot of anxiety and emotionally drained the Appellant owing to the casual manner in which the Respondent progressed with the review in blatant disregard of due process.

55. That as a public entity with tremendous mandate in tax administration, the Respondent must be estopped from such conduct and assessments that are products of such illegalities set side. That this is the Appellant's prayer in this Appeal.

Appellant’s Prayers 56. The Appellant made the following prayers;a.That this Appeal be allowed;b.That the Respondent's objection decision dated 21st January 2022, together with accompanying decisions dated 21st May 2021 and 4th December 2020, be set aside in their entirety;c.That the principal tax and attendant penalties and interest demanded by the Respondent amounting to Kshs. 50,778,969. 00 vide its decision dated 3rd March 2022 be vacated forthwith in its entirety;d.That the costs of and incidental to this Appeal be awarded to the Appellant: ande.Any other orders that the Tribunal may deem fit.

RESPONDENT’S CASE 57. The Respondent’s case is premised on the hereunder filed documents and proceedings before the Tribunal:-a.The Respondent’s Statement of Facts dated 7th June, 2022 and filed on 8h June, 2022 together with the documents attached thereto.b.The Respondent’s Preliminary Objection dated and filed on 10th November, 2022. c.The Respondent’s written submissions dated and filed on 10th November, 2022 together with the legal authorities filed therewith.

58. The Respondent in its Preliminary Objection stated as follows:-a.That the Appellant’s Appeal dated 3rd June 2022 is incompetent, vexatious, misconceived and otherwise an abuse of the court process.b.That this Honourable Tribunal herein lacks statutory jurisdiction to deal with the issues raised in the Appeal as it is in contravention of Section 13(1) & (2) of the Tax Appeals Tribunal Act, No 40 of 2013.

59. The Respondent was of the considered view that the main issue raised in this Appeal for this Tribunal's determination is: Whether the Appeal filed on 3rdJune 2022 is incompetent and contrary to Sections 13(1), (2) & (3) of the Tax Appeals Tribunal Act, 2013.

60. That the Appellant filed the Notice of Appeal on 16th March 2022 and the main Appeal on 3rd June 2022 contrary to express provisions of Section 13 of the Tax Appeal Tribunal Act (TATA) , 2013.

61. That Section 13 of the TATA provides as follows:Procedure for appeal2. 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-a.a memorandum of appeal;b.statements of facts; andc.the tax decision.3. The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).‖

62. The Respondent in support of its Preliminary Objection dated and filed on 810th November 2022 associates itself with the definition of a preliminary objection as set out in the case of Mukisa Biscuit Manufacturing Co. Ltd vs. West End Distributors Ltd (1969) EA 696:―So far as I'm aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit.‖

63. That in Felister Wakonyo Waruhiu vs. Joseph Wachira Mwangi, Civil Appeal No. 8 of 2013, where the appeal had been filed out of time, the Court of Appeal addressed that issue as thus:-―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.‖

64. That the Appeal dated 3rd June 2022 before the Tribunal is incompetent and ought to be struck out on the first instance.Whether the objection decisions dated 21st May 2021 and 3rd March 2022 are contrary to Section 51(11) of the TPA

65. That the facts surrounding this issue are as laid out below:a.On 27th October 2020, the Appellant provided the first set of documents as requested by the Respondent.b.On 11th December 2020, 45 days later the Respondent requested for further records from the Appellant.c.On 18th December 2020, the Appellant presented additional documents for verification as requested.d.On 3rd February 2021, the Respondent issued a progress report to the Appellant regarding the document verification exercise, exactly 47 days after receipt of certified bank statements.e.On 24th February 2021, the Appellant acknowledged and responded to the Respondent's preliminary findings, prompting them to furnish additional documents on 30th March 2021. f.52 days later, on 21st May 2021, the Respondent conclusively gave its objection decision after completing the verification of all the records submitted by the Appellant.

66. That the Appellant’s allegations that the Respondent breached procedures which violated its right to fair administrative action is not substantiated in evidence and in law.

67. That on the objection decision dated 3rd March 2022, the Appellant manually objected on 20th January 2022 and provided information on 17th February 2022, and the decision was issued on 3rd March 2022 within the statutory timelines.

68. That Section 51(11) of the Tax Procedures Act states that:―Where the Commissioner has not made an objection decision within sixty days from the date that the taxpayer lodged a notice of the objection, the objection shall be allowed.‖

69. That pursuant to Section 56 of the Tax Procedures Act the burden of proof lies on the taxpayer to prove that an assessment is excessive or a tax decision is incorrect. That Section 56 (1) of the Tax Procedures Act 2015 provides that;―the burden shall be on the taxpayer to prove that a tax decision is incorrect.‖

70. That the Appellant’s objection was processed in accordance with the relevant supporting documents that were availed to assist in reviewing the objection. That the initially assessed amounts were therefore adjusted and the new position resulted in total taxes due amounting to Kshs. 65,173,587. 17.

71. That the documents and records availed by the Appellant were used to issue a merited and amended tax position of Kshs. 65,173,587. 17.

72. That the Respondent made the objection decision within the statutory prescribed 60 days after receiving further information required from the taxpayer in order to make an objective decision.

73. The Respondent stated that the letter dated 4th December 2020 and the objection decision dated 3rd March 2022 is for VAT and Corporation tax for the period 2015 to 2019 and the Appellant has not discharged its burden to show that the outstanding tax of Kshs. 109,563,168 is excessive.

74. That the Appellant is basically presenting different documents before the Tribunal with no explanations of their relations contrary to provisions of the law.

75. The Respondent relied on the following cases:a.Osho Drapers Limited vs. Commissioner of Domestic Taxes (Income Tax Appeal E147 of 2020) [2022] KEHC 196 (KLR) (Commercial and Tax) (18 March 2022).b.Wolken Telecommunications Limited vs. Commissioner of Domestic Taxes.c.Histoto Limited vs. Commissioner DTD (TAT 369 of 2019).

Respondent’s Prayers 76. The Respondent prayed that:a.The Appeal be dismissed with costs.b.The objection decisions dated 21st May 2021 and 3rd March 2022 be upheld.

ISSUES FOR DETERMINATION 77. The Tribunal upon due consideration of the pleadings and the written submissions of the parties was of the considered view that the Appeal raises the following issues for its determination:a.Whether the appeal is validb.Whether the Respondent’s objection decisions were allowed by lawc.Whether the assessments were justified

ANALYSIS AND DETERMINATION 78. The Tribunal having established the issues for its determination proceeded to analyse the same as hereunder.

a. Whether the appeal is valid 79 .The Respondent raised a Preliminary Objection on the matter stating that the Appellant’s Appeal dated 3rd June 2022 is incompetent, vexatious, misconceived and otherwise an abuse of the Tribunal process. The Respondent further submitted that this Honourable Tribunal lacks statutory jurisdiction to deal with the issues raised in the Appeal as it is in contravention of Section 13(1) & (2) of the Tax Appeals Tribunal Act, No 40 of 2013.

80. The Respondent further submitted that the Appellant filed the Notice of Appeal on 16th March 2022 and the main appeal on 3rd June 2022 contrary to express provisions of Section 13 of the Tax Appeal Tribunal Act (TATA) , 2013.

81. The Tribunal reviewed the parties’ pleadings in detail and specifically the chronology of events that led to this dispute. Specifically, the Tribunal noted the below trail of correspondence:-a.On 3rd March 2020, the Respondent, through its Nairobi Office, wrote to the Appellant requesting for records and information pursuant to Section 59(1) of the Tax Procedures Act, 2015. b.On 26th June 2020 the Respondent made an immediate tax demand of Kshs. 109,563. 16. 007; Kshs. 55,776,890. 00 relating to VAT and Kshs. 53,786,277. 00 relating to Corporation Tax.c.On 18th September 2020 the Respondent through its Nakuru Office issued additional assessments through the iTax Portal for VAT totalling Kshs. 18,624,902 covering the months of November 2017, November 2018 and November 2019. d.On 24th September 2020 the Respondent through its Nakuru office again issued additional assessments through the iTax portal for VAT amounting to Kshs. 23,055,762 covering the month of October 2016. On the same date, the Respondent issued additional assessments for corporation tax amounting to Kshs. 45,621,017. 00 for the period 2016 to 2019. e.On 25th September 2020 the Appellant objected to the assessments in its letter received by the Respondent on 28th September 2020 together with all supporting documentation.f.The Appellant, while uploading the above stated objection, noted further additional assessments that were issued on 2nd October 2018 for VAT totalling to Kshs 1,391,824. 00. The Appellant proceeded to file an objection application against these assessments on 6th October 2020. This objection application is not in file.g.An objection decision dated 4th December 2020 was issued but the Appellant avers that it never received this document.h.An objection decision by the Respondent dated 21st May 2021 reviewing assessments and demanding taxes was issued and the Appellant equally avers that it never received this communication.i.A letter by the Respondent dated 18th June 2021 stating that it had received the Appellant’s payment plan proposal dated 18th June 2021 relating to outstanding assessments of Kshs. 51,173,587. 17. The Appellant’s cited this letter which is however not on record.j.The Appellant’s follow up letter dated 20th January 2022 to the Respondent.k.On 3rd March 2022, the Respondent communicated that objection decisions for the Appellant's applications had since been issued. Although in the correspondence it was indicated that the copies were attached, the Appellant claims that it was not until 7th March 2022 that the decisions bearing the dates of 4th December 2020 and 21st May 2021 were shared.l.On 8th March 2022, the Appellant wrote to the Respondent seeking concurrence on the objection application being allowed due to passage of time.

82. In its pleadings the Appellant argued that the Respondent’s decisions were out of time and were therefore allowed by operation of the law.

83. On its part, the Respondent argued, in its Preliminary Objection, that the Appellant did not abide by the provisions of Section 13 of the Tax Appeal Tribunal Act (TATA) , 2013.

84. Section 13 of the Tax Appeal Tribunal Act (TATA), 2013 states as follows regarding the filing of an appeal before the Tribunal:―(1) A notice of appeal to the Tribunal shall—a.be in writing;b.be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner.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 Clerk, of –a.a memorandum of appeal;b.statements of facts; andc.the tax decision.‖

85. The Tribunal, having considered the parties’ pleadings, is of the considered view that even if the Appellant had proof that it received the Respondent’s objection decisions on 7th March 2022, its Notice of Appeal dated and filed on 2nd June 2022 would still be late as it exceeded the statutory timeline for filing an Appeal at the Tribunal.

86. Section 13(3) of the Tax Appeals Tribunals Act states as follows regarding late appeals:―The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).‖

87. It is the Tribunal’s considered opinion that Section 13 of the TATA is couched in mandatory terms and therefore a party must file appeal documents within the stated timelines under Subsection (1) and (2). Further, if a party needs to file a late appeal, it must seek leave from the Tribunal.

88. The Appellant in the instant case did not seek leave to file a late appeal as per Section 13(3) of the Tax Appeals Tribunal Act.

89. As a result of the foregoing, the Tribunal finds that the instant Appeal by the Appellant is invalid as it equally lodged its Appeal documents late and contrary to the provisions of Section 13 of the Tax Appeals Tribunals Act, 2013.

90. The Tribunal having entered the above finding, did not delve into the other issues for its determination, namely: ―Whether the Respondent’s objection decision was allowed by law‖ and ―Whether the assessment was justified‖ as they have been rendered moot.

Final Decision 91. In view of the foregoing, the Tribunal finds that the Appeal is incompetent and unsustainable in law and accordingly makes the following Orders: -a.The Appeal be and is hereby struck out.b.Each Party to bear its own costs.

92. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 4TH DAY OF AUGUST, 2023ERIC NYONGESA WAFULA - CHAIRMANCYNTHIA B. MAYAKA - MEMBERGRACE MUKUHA - MEMBERJEPHTHAH NJAGI - MEMBERABRAHAM K. KIPROTICH - MEMBER