Judgment summary
The Applicant, Air-Go Consultants Limited, applied by Notice of Motion dated 9th November 2025 and filed 14th November 2025 under a Certificate of Urgency, seeking leave to file its appeal out of time and to have its Memorandum of Appeal, Statement of Facts and Notice of Appeal deemed duly filed (paragraph 1).
The application was supported by a sworn affidavit of the Applicant's Director, Mr. Jairus Mulei Musyoka, dated 13th November 2025 (paragraph 2). No party appeared at the inter partes hearing on 21st November 2025, and the Tribunal determined the matter on the basis of the submissions and material on record (paragraph 3).
The Tribunal considered the statutory framework for extensions of time under Section 13(3) and 13(4) of the Tax Appeals Tribunal Act and Rule 10(3) of the Tax Appeals Tribunal (Procedure) Rules, together with case law on the exercise of discretion in such applications (paragraphs 9 to 18).
The Tribunal found the delay adequately explained, the intended appeal arguable, and no prejudice demonstrated by the Respondent, and accordingly granted leave to appeal out of time (paragraphs 17 to 22).
Background
The Respondent raised additional assessments totalling Kshs. 127,203,506/= in VAT and Income Tax against the Applicant for the tax periods 2017, 2018, 2019, 2020, 2021 and 2022 (paragraph 2(b)).
The Applicant contended it had discharged its evidentiary burden by supplying financial records and supporting documentation in accordance with Section 17(3) of the VAT Act and Section 56(1) of the Tax Procedures Act, 2015 (paragraph 2(d)).
The Applicant's Director stated he suffered from Hypertension, Diabetes Mellitus and Rheumatoid Arthritis throughout 2024 and 2025, which impaired his ability to manage the filing of the appeal within statutory timelines (paragraph 2(c), paragraph 15).
The Applicant also averred that its accountant had wrongly filed Nil returns while the Director was hospitalised, and that it was not permitted to amend these returns (paragraph 2(h)). It further stated that it had sought Alternative Dispute Resolution under Section 55 of the Tax Procedures Act but received no response or guidance from the Respondent (paragraph 2(j), 2(l)).
The Objection Decision was issued in August 2024, and the Notice of Appeal was lodged in September 2025 (paragraph 17).
Core dispute
The core issue was whether the Tribunal should exercise its discretion under Section 13(3) and 13(4) of the Tax Appeals Tribunal Act and Rule 10(3) of the Tax Appeals Tribunal (Procedure) Rules to grant the Applicant leave to file its appeal out of time.
This required the Tribunal to assess whether the delay in filing had been satisfactorily explained, whether the intended appeal was arguable, and whether the Respondent would suffer any prejudice if the extension were granted (paragraphs 9 to 21).
The substantive basis of the intended appeal centred on the Respondent's use of an agency fee rate of Kshs. 10,000/= per entry in raising the VAT and Income Tax assessments, which the Applicant argued was arbitrary and inconsistent with the prevailing market rate of Kshs. 300/= per entry as shown in its invoices (paragraphs 2(e), 5, 19).
Court findings
The Tribunal held that extension of time is not a right but an equitable remedy available at the discretion of the Tribunal to a deserving party, citing Charles Karanja Kiiru vs. Charles Githinji Muigwa [2017] eKLR (paragraphs 12 to 13).
Applying the principles in Nicholas Kiptoo Arap Korir Salat vs. Independent Electoral and Boundaries Commission & 7 others [2014] eKLR, the Tribunal found that the Applicant had satisfactorily explained the delay, supported by medical records evidencing the Director's illness during the material period, which the Tribunal found credible and sufficient (paragraphs 14, 17).
The Tribunal considered whether the intended appeal was arguable, applying the standard in Samuel Mwaura Muthumbi vs. Josephine Wanjiru Ngungi & Another (2018) eKLR, and found that the ground relating to the agency fee rate of Kshs. 10,000 per entry raised a bona fide and arguable question as to the legality and reasonableness of the assessments (paragraphs 18 to 19).
On prejudice, the Tribunal noted that the Respondent had neither filed grounds of opposition nor demonstrated any prejudice, and this factor weighed in favour of granting the extension (paragraph 20).
The Tribunal concluded that the Applicant had satisfactorily explained the delay, demonstrated the arguability of the intended appeal, and shown that no prejudice would be occasioned to the Respondent, and therefore found the application meritorious (paragraphs 21 to 22).
Outcome
The Tribunal granted leave to appeal out of time (paragraph 23(a)).
The Applicant's Notice of Appeal, Memorandum of Appeal, Statement of Facts, Objection Decision and all other Appeal documents were deemed properly filed and served (paragraph 23(b)).
The Respondent was ordered to file and serve its Statement of Facts and/or any other response within thirty (30) days (paragraph 23(c)).
The costs of the Application were ordered to abide the outcome of the Appeal (paragraph 23(d)).
Major issues / areas of contention
- Whether the Applicant satisfactorily explained the delay in filing the Notice of Appeal and accompanying documents.
- Whether the delay was attributable to sickness or other reasonable cause under Section 13(4) of the Tax Appeals Tribunal Act and Rule 10(3) of the Tax Appeals Tribunal (Procedure) Rules.
- Whether the intended appeal disclosed arguable grounds, particularly regarding the agency fee rate of Kshs. 10,000/= per entry used in the assessments.
- Whether the Respondent would suffer prejudice if the Applicant were granted leave to appeal out of time.