Judgment summary
The Applicant filed a Notice of Motion dated 15th June 2026 seeking leave to file fresh documents in support of its appeal against the Respondent's objection decision. The Respondent opposed the application, arguing that the documents were being introduced for the first time on appeal and had not been provided during audit or objection review.
The Tribunal considered the applicable procedural rules and case law governing the admission of additional evidence at appellate stage. It found that the documents, comprising creditors schedules and bank analyses, were intended to corroborate evidence already before the Tribunal and went to the root of the dispute.
The Tribunal held that the tests for admitting additional evidence had been met and that no grave prejudice had been demonstrated by the Respondent. It allowed the application and granted the Respondent a corresponding opportunity to file its own additional documents.
Background
The Applicant moved the Tribunal by Notice of Motion dated 15th June 2026 and filed on 16th June 2026, seeking leave to file fresh documents, for those documents to be deemed as filed and served, and for costs to be in the cause [1].
The Application was supported by a sworn affidavit of Phillip Odeny, the Applicant's tax agent, dated 15th June 2026 and filed on 16th June 2026 [2]. The Applicant's grounds were that the documents were essential for meritorious disposition of the matter, and that the same documents had been adduced at the ADR process, so no prejudice would be occasioned to the Respondent [2].
The Respondent filed an opposing replying affidavit dated 1st July 2026 sworn by Mr Nafula Odonya [3]. The Respondent contended that the documents were being introduced for the first time on appeal, had not been provided at audit or objection review stage, and that admitting them would exceed the Tribunal's statutory mandate [3]. The Respondent further stated the assessments were based on disallowed purchases which were overstated or fictitious, that only a single supplier had acknowledged dealing with the Appellant, and sought to have the application struck out with costs [3].
Core dispute
The dispute concerned whether the Tribunal should exercise its discretion under Rule 10 of the Tax Appeals Tribunal (Procedure) Rules 2015 and Section 13(6) of the TATA to allow the Applicant to file additional documents at the appeal stage, where those documents had not been submitted at audit or objection stage but, according to the Applicant, had been adduced during the ADR process.
The Respondent argued that admission of the documents would exceed the Tribunal's appellate mandate, that the documents required forensic examination and verification with suppliers, and that only a single supplier had acknowledged dealing with the Applicant, casting doubt on the authenticity of the purchases underlying the assessments [3].
Court findings
The Tribunal held that its power to determine the application was anchored in Rule 10 of the Tax Appeals Tribunal (Procedure) Rules 2015 and Section 13(6) of the TATA [6, 7]. It applied the tests set out in Commissioner of Income Tax-vs-Total Kenya Limited [2021] eKLR, Tarmohamed & Another v. Lakhani & Company [1958] EA 567, Wanjie & Others v. Sakwa & Others [1984] KLR 275, and Mohamed Abdi Mahmud-vs-Ahmed Abdullahi Mohamed & 3 Others [2018] eKLR [8, 9].
The Tribunal noted that the additional evidence had neither been provided during the audit stage nor during the formative period of the dispute, though the Applicant maintained it had been provided during ADR [10]. The Tribunal found that it could not delve into whether the documents were indeed provided during ADR proceedings, as ADR is an independent process governed by the Tax Procedures (Settlement of Tax Disputes Out of Court or Tribunal) Regulations, Legal Notice No. 23 of 2020 [12].
Upon perusing the documents, the Tribunal found they were not entirely new, comprising creditors schedules and bank analyses intended to corroborate evidence already before the Tribunal, and going to the root of the dispute [15]. The Tribunal held that the tests in Mohamed Abdi Mahmud had been met, that the evidence would eliminate vagueness or doubt over the dispute and had a direct bearing on the main issue, and that there was no evidence the documents were intended to fill lacunae or gaps in evidence [16].
The Tribunal reiterated its holding in Alliance Tobacco Limited vs Commissioner of Legal Services & Border Control [TAT Appeal No. 42 of 2024] that amendments to pleadings should be liberally and freely permitted unless prejudice and injustice would be occasioned to the opposite party [17]. The Tribunal found that the Respondent had not proved the grave prejudice it would suffer if the documents were admitted [18].
Outcome
The Tribunal found the application merited and granted the Applicant leave to file additional documents limited to those identified in the application. The additional documents attached to the application were deemed properly filed and served. The Respondent was granted corresponding leave to file and serve its response and additional documents, if necessary, within fourteen (14) days of the date of the ruling [20].
Major issues / areas of contention
- Whether the Applicant should be granted leave to file additional documents at the appeal stage that had not been submitted during audit or objection review.
- Whether documents allegedly adduced during the ADR process could be admitted before the Tribunal without prejudice to the Respondent.
- Whether admitting the additional documents would exceed the Tribunal's statutory appellate mandate under the TATA.
- Whether the additional documents were being used to fill lacunae or gaps in the Applicant's case rather than to genuinely assist the Tribunal.
- Whether the Respondent would suffer grave prejudice if the documents were admitted into evidence.