Judgment summary
The Tax Appeals Tribunal at Nairobi heard an appeal by Cedar Marketing and Communications Limited against a VAT additional assessment confirmed by the Commissioner of Domestic Taxes.
The Respondent raised a preliminary objection that the appeal was filed outside the statutory timelines and without leave of the Tribunal. The Tribunal agreed, finding the Notice of Appeal was lodged three years and seven days late without any application for enlargement of time under Section 13(3) of the Tax Appeals Tribunal Act.
Having found the appeal incompetent for want of jurisdiction, the Tribunal did not consider the substantive merits of the VAT assessment. The appeal was struck out, with no order as to costs.
Background
The Appellant is a limited liability company dealing in construction (para 1). The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, 1995 Cap 469, mandated under Section 5(1) and 5(2) to collect and administer revenue (para 2).
The Respondent raised a VAT additional assessment on 30th August 2022 for Kshs 1,300,136.16 being principal tax (para 3). The Appellant objected to the assessment on 23rd September 2022, and the Respondent issued its Objection Decision on 22nd October 2022 (para 4).
Aggrieved by the decision, the Appellant filed its Notice of Appeal dated 28th October 2025 on 29th October 2025 (para 5).
Core dispute
The Appellant argued that the Respondent had disallowed expenses despite the Appellant sharing purchase invoices, and that the nature of its business meant it paid suppliers in small amounts, later consolidated into one purchase invoice per location, often settled via M-pesa and cash (paras 6, 9, 10).
The Respondent contended that it had disallowed input VAT claims because the relevant suppliers had not declared corresponding sales invoices in their VAT returns, and because the Appellant failed to provide delivery notes and proof of payment as required under Section 43(1)-(3) of the VAT Act 2015, leading to disallowance under Section 16 of the VAT Act (para 14).
The Respondent also raised a preliminary issue that the appeal was not properly before the Tribunal, having been filed outside the 30-day statutory period under Section 13 of the Tax Appeals Tribunal Act and Rules 3 and 4 of the Tax Appeals Tribunal (Procedure) Rules 2015, without leave to file out of time under Section 13(3) of the Act (para 17).
Court findings
The Tribunal identified two issues for determination: whether the appeal was valid, and whether the Respondent's demand was justified (para 24).
On validity, the Tribunal noted the Objection Decision was issued on 22nd October 2022, meaning the Notice of Appeal ought to have been filed by 22nd November 2022 under Section 13(1) of the Tax Appeals Tribunal Act and Section 51(12) of the Tax Procedures Act. Instead, the Notice of Appeal was filed on 29th October 2025, three years and seven days late, without leave of the Tribunal (paras 27-30).
The Tribunal found that the Appellant failed to invoke the reprieve under Section 13(3) of the Tax Appeals Tribunal Act to seek leave to file out of time (para 31). It held that this failure stripped the Tribunal of jurisdiction to hear the matter, relying on Owner's of Motor Vessel "Lillian S" vs Caltex (Kenya) Limited (1989) eKLR on the centrality of jurisdiction, and Kariinya Mukiira vs Middle East Bank Limited (2018) eKLR and the Supreme Court's remarks in Moses Mwicigi on the importance of procedural rules (paras 32-33).
Having found the appeal incompetent for being filed outside statutory timelines and without leave to enlarge time, the Tribunal did not proceed to determine the second issue, considering it moot (paras 35-36).
Outcome
The Tribunal found the appeal incompetent and struck it out. No orders were made as to costs (para 37).
Major issues / areas of contention
- Whether the Appeal was validly before the Tribunal given the timelines for filing.
- Whether the Respondent's demand confirming the VAT assessment of Kshs 1,300,136.00 was justified, which was rendered moot and not determined.