Judgment summary
The Applicant filed a Notice of Motion dated 17th June 2026 seeking leave to file an appeal out of time against the Respondent's objection decision, and for the annexed Memorandum of Appeal to be deemed duly filed upon payment of fees (1).
The Respondent did not file a response to the application (3).
The Tribunal considered the statutory framework under section 13(3) and 13(4) of the Tax Appeals Tribunal Act and Rule 10 of the Tax Appeals Tribunal (Procedure) Rules, together with judicial authorities on extension of time, and allowed the application (4)-(23).
Background
The Applicant, through its director Sandra Cheruto Morogo, moved the Tribunal under certificate of urgency by a Notice of Motion dated 17th June 2026 and filed on 22nd June 2026, supported by an affidavit sworn on 17th June 2026 (1).
The Applicant sought leave to file an appeal out of time against the Respondent's objection decision, and for the annexed Memorandum of Appeal to be deemed duly filed and served upon payment of the requisite fees (1).
The objection decision in issue is dated 29th December 2025 (19).
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 of the TAT Rules to grant the Applicant leave to file its appeal out of time.
The Applicant grounded its application on assertions that the delay was not deliberate or inordinate, that it had engaged the Respondent in good faith negotiations following the objection decision, that the assessment involved complex reconciliation of VAT, withholding tax and allowable expenses, and that it faced administrative and system-related challenges in compiling records (2).
The Applicant also asserted that its intended appeal was meritorious, raising issues including double taxation, erroneous disallowance of expenses and misapplication of tax principles, and that no prejudice would be suffered by the Respondent that could not be compensated by costs (2).
The Respondent did not file a response to the application (3).
Court findings
The Tribunal noted that the power to extend time under section 13(3) of TATA and Rule 10 of the TAT Rules is discretionary and not a right, citing Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] eKLR and Wasike v Swala [1984] KLR 591 on the relevant factors, namely merit of the appeal, absence of undue prejudice, and whether the delay is inordinate (7)-(8).
On merit, the Tribunal examined the draft Memorandum of Appeal, which raised grounds including double taxation on income already declared and accounted for, and a failure to appreciate timing differences in VAT and income tax reporting resulting in declared income being wrongly treated as omitted income. The Tribunal found the intended appeal arguable, as the Respondent ought to respond to these assertions (13)-(14).
On reasonable cause for the delay, the Tribunal accepted the Applicant's explanation that it had engaged the Respondent in good faith negotiations following the objection decision, creating a legitimate expectation of settlement without litigation. As the Respondent did not challenge this explanation, it remained unchallenged (16)-(17).
On whether the delay was inordinate, the Tribunal noted the objection decision was dated 29th December 2025 and the application was filed close to six months later. The Tribunal found the delay, though notable, was explained satisfactorily by reference to the settlement negotiations (19).
On prejudice, the Tribunal found the Respondent could not demonstrate any prejudice as it had not responded to the application, and held that the Respondent would not be prejudiced since, should the appeal fail, it would recover the taxes in issue plus interest (21)-(22).
Outcome
The Tribunal allowed the application dated 17th June 2026 and filed on 22nd June 2026 (23).
The Tribunal granted the Applicant leave to file an appeal out of time against the Respondent's objection decision, and ordered that the annexed Memorandum of Appeal be deemed duly filed and served upon payment of the requisite fees (23).
The Respondent was granted liberty to put in its response within statutory timelines, and the Tribunal made no orders as to costs (23).
Major issues / areas of contention
- Whether the Tribunal should grant leave to file an appeal out of time under section 13(3) and 13(4) of the Tax Appeals Tribunal Act and Rule 10 of the TAT Rules
- Whether the intended appeal, raising grounds of double taxation and timing differences between VAT and income tax reporting, was arguable and meritorious
- Whether the Applicant demonstrated reasonable cause for the delay, based on ongoing good faith settlement negotiations with the Respondent
- Whether the delay of close to six months from the objection decision was inordinate
- Whether the Respondent would suffer prejudice if the extension of time was granted