Judgment summary
The Appellant, Agriflora Kenya Limited, appealed against the Respondent's decision, communicated on 11 August 2025, rejecting its income tax refund application for the period 1 April 2016 to 31 March 2017 as time-barred [4, 142].
The Tribunal confined itself to the refund decision of 11 August 2025, which was the decision named in the Notice of Appeal dated 19 September 2025 [142]. It made no finding on the separate earlier dispute concerning additional assessments for the years 2016, 2018 and 2019 or the Objection decision of 8 November 2021, holding that a grievance against one decision cannot be revived collaterally through an appeal against another [143, 145]. It also declined to determine ground (f) relating to Article 47 of the Constitution and the Fair Administrative Action Act, 2015 [146].
The Tribunal reviewed documents the Appellant produced and found the overpayment arose in the accounting period 1 April 2013 to 31 March 2014, with the relevant payments made between 5 June 2013 and 19 March 2014 [154].
The Tribunal found the application tied to the decision under appeal, made on 4 February 2025, was long beyond five years from any of those payment dates and was therefore time-barred under Section 47(1)(b) of the Tax Procedures Act [155]. It held that the delay in the Respondent's handling of the legacy ledger credits did not suspend the limitation period [156, 157, 158].
The Tribunal found that Section 47(3) deemed approval operates only for a valid application under subsection (1) and could not validate a time-barred application [160]. It also found the plea of legitimate expectation could not succeed because there cannot be a legitimate expectation contrary to clear provisions of the law [161]. It dismissed the appeal and upheld the refund rejection decision [163, 164].
Background
The Appellant is a limited liability company incorporated under the Companies Act, engaged in large-scale horticultural production, processing and export, as well as domestic distribution of horticultural produce within Kenya [1].
The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, Cap 469 Laws of Kenya [2].
The Appellant stated it made an overpayment of Corporation tax amounting to Kshs. 10,239,625 in the year of income 2014, which it carried forward under the legacy system [8]. It applied Kshs. 316,028 in its final legacy return for the year ended 31 March 2015, reducing the carried forward balance to Kshs. 9,923,597 [9].
Upon migration to the iTax system in 2016, the Appellant stated that the corporate return template (IT2C) did not contain a dedicated field for brought-forward legacy credits, so it declared the credits under Field 13.4 (Credit under Section 42 of the Income Tax Act) and continued to do so through the year of income 2019 [10, 11].
The Appellant lodged an income tax refund application on 26 September 2019 for Kshs. 9,312,513, which the Respondent rejected on 27 June 2022 citing subsisting additional assessments for 2016, 2018 and 2019 [13, 23]. The Appellant was advised to re-apply through the 2017 return, the only year without an additional assessment [25, 148].
The Appellant lodged a refund application on 23 August 2024, rejected as time-barred by a notice dated 31 January 2025 [35]. It then lodged a further application on 4 February 2025 through the 2017 return, which the Respondent rejected as time-barred by a decision communicated on 11 August 2025 [36, 149].
The Appellant filed its Notice of Appeal dated 19 September 2025 [5].
Core dispute
The issue for determination was whether the Respondent was justified in rejecting the Income tax refund application for the period 1 April 2016 to 31 March 2017 in its refund decision communicated on 11 August 2025 [140].
The Appellant contended that the credits had been acknowledged and validated by the Respondent through a letter dated 6 October 2022, that this created a legitimate expectation the refund would be honoured, and that the application was deemed approved under Section 47(3) of the Tax Procedures Act because the Respondent failed to determine it within ninety days [152].
The Respondent contended that the refund was time-barred, that no legitimate expectation could arise contrary to statute, and that the Appellant had failed to discharge its burden of proof [116, 118, 137].
Court findings
The Tribunal confined itself to the refund decision communicated on 11 August 2025 as the decision defining the scope of the appeal [142]. It declined to make findings on the separate additional assessments and Objection decision of 8 November 2021, as no appeal against that decision was before it [143].
The Tribunal held that where the law prescribes a specific procedure for redress of a grievance, that procedure must be strictly followed, and a grievance against one decision cannot be revived collaterally through an appeal against another [145]. It declined to determine ground (f) concerning Article 47 of the Constitution and the Fair Administrative Action Act, 2015, holding it more properly the subject of a claim under that Act or a constitutional petition before the High Court [146].
The Tribunal read Section 47 of the Tax Procedures Act as sequential, so that whether the Commissioner complied with the second step cannot arise unless the taxpayer first complied with the first step [153].
Having reviewed the Appellant's own documents, the Tribunal found the overpaid tax arose in the accounting period 1 April 2013 to 31 March 2014 and was paid on dates from 5 June 2013 to 19 March 2014 [154]. It found the application made on 4 February 2025 was long beyond five years from any of those dates and was therefore time-barred under Section 47(1)(b) [155].
The Tribunal found the limitation period was unaffected by the Respondent's protracted handling of the legacy ledger credits, as Section 47(1)(b) contains no provision suspending the period pending internal administrative review [156, 157]. It noted the Appellant's other two refund applications were equally out of time [159].
The Tribunal found reliance on Section 47(3) deemed approval could not succeed, as that provision operates only for a valid application under subsection (1) and does not validate an application already outside the five-year window [160].
The Tribunal found the plea of legitimate expectation was fatally flawed because there cannot be a legitimate expectation contrary to clear provisions of the law, and Section 47(1)(b) is such a provision [161]. It found the letter of 6 October 2022 formed part of a separate exercise to reconcile and migrate legacy ledger balances, was not a determination of the refund application on appeal, and could not revive a claim already time-barred [162].
Outcome
The Tribunal found the appeal was not merited. It ordered that the appeal be dismissed, that the Refund Rejection Decision dated 11 August 2025 be upheld, and that each party bear its own costs [164].
Major issues / areas of contention
- Whether the Respondent was justified in rejecting the Income tax refund application for the period 1 April 2016 to 31 March 2017 communicated on 11 August 2025.
- Whether the refund application of 4 February 2025 was made within the five-year period fixed by Section 47(1)(b) of the Tax Procedures Act.
- Whether the Respondent's internal administrative delays suspended or extended the statutory limitation period.
- Whether deemed approval under Section 47(3) of the Tax Procedures Act could apply to a time-barred application.
- Whether the Respondent breached the Appellant's legitimate expectation created by the letter dated 6 October 2022 and subsequent conduct.
- Whether the Tribunal should determine grounds relating to Article 47 of the Constitution and the Fair Administrative Action Act, 2015.