Judgment summary
The Tax Appeals Tribunal heard an appeal by Kings Mabati Company Limited against a review decision of the Commissioner of Customs and Border Control which confirmed an assessment for short-levied duties of Kshs 3,770,150 [4, 5].
The Tribunal identified two issues for determination: whether the appeal was competent, and whether the Respondent erred in deviating from the transaction value method in favour of the transaction value of identical goods method [46].
The Tribunal dealt only with the first issue. It found that the assessment was issued on 16th June 2025, and that the Appellant applied on 30th July 2025 for leave to lodge an objection out of time, which the Respondent granted [47, 53]. However, the evidence on record did not show that the Appellant subsequently lodged the intended objection [53].
The Tribunal held that in the absence of a valid objection and a corresponding review decision, there was no appealable decision before it, and its jurisdiction is appellate in nature [56]. It found the appeal incompetent and struck it out, with each party to bear its own costs [58, 60].
Background
The Appellant is a company incorporated in Kenya and engaged in the manufacture and trading of roofing sheets and related steel products [1].
The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya's Laws [2].
The Respondent sought to establish the accuracy of the values declared for the Appellant's galvanized steel coils and carried out a comparative analysis of the Appellant's importations against those of other identical consignments from China [3]. The analysis revealed that the Appellant's declared FOB value was lower when compared to the FOB value of identical goods originating from China, which was 1100/MT in 2022 and 1200/MT for 2023, leading to the issuance of an assessment for short-levied duties dated 16th June 2025 in the sum of Kshs 3,770,150 [4].
The Appellant applied for extension of time to file a response to the assessment by a letter dated 30th July 2025, and the Respondent granted leave to object out of time [5]. The Respondent issued a Review decision dated 25th August 2025 confirming the assessment on the basis that the Appellant did not object even though it was granted leave to object out of time [5].
Dissatisfied with the Review decision, the Appellant filed a Notice of Appeal dated 2nd September 2025 [6], and lodged a memorandum of appeal dated 16th December 2025 [7].
Core dispute
The Appellant contended that the Respondent erred in determining the value of its imported goods by comparing them with goods that were not truly identical in specification, quality or terms of sale, and that the assessment was based on an arbitrary and unsubstantiated benchmark price [7]. The Appellant argued that the Respondent misapplied Section 122 of EACCMA and the Fourth Schedule by invoking the identical goods method without first establishing that the transaction value could not be determined [12, 14, 21].
The Respondent maintained that all actions were taken in accordance with the EACCMA and related regulations, that the assessment was properly founded in fact and law, and that the Appellant was granted an opportunity to respond in line with due process [36, 37, 38]. The Respondent submitted that the Appellant did not lodge an application for review as required under Section 229 of EACCMA, so the grounds of appeal were not placed before the Respondent at the review stage [45].
The Tribunal framed the determination around whether the appeal was competent and whether the Respondent erred in deviating from the transaction value method in favour of the transaction value of identical goods method [46].
Court findings
The Tribunal noted that the letter dated 30th July 2025 and the email dated 6th August 2025 were not on record, and that the Appellant in its statement of facts did not point out the date it lodged an objection against the assessment, despite the Respondent stating that the Appellant did not lodge an objection even after being granted leave to object out of time [51].
The Tribunal found that the starting point for the Appellant's case should have been to address whether it filed an objection against the assessment, but it did not, and it did not file any document to demonstrate that it objected [52].
The Tribunal observed that the Appellant's application dated 30th July 2025 for leave to lodge an objection out of time demonstrated that the Appellant acknowledged no valid objection had been filed within the statutory period, but the evidence on record did not show that the Appellant thereafter lodged the intended objection [53]. It noted that the Respondent consistently raised this issue in its Review Decision, Statement of Facts, Witness Statement and Written Submissions, and the Appellant neither disputed nor rebutted the assertion [53].
The Tribunal cited Section 229(1) and (3) of the EACCMA [50], and referred to Mukisa Biscuits Manufacturing Co. Ltd v West End Distributor Ltd [1969] E.A 696 [48], Republic v Kenya Revenue Authority Commissioner of Custom Services Ex-Parte Europa Healthcare Limited [2014] KEHC 5271 (KLR) [54], and Ripple Pharmaceuticals Limited v Commissioner, Customs and Border Control [2025] KEHC 806 (KLR) [55].
The Tribunal found that although the Respondent granted the Appellant leave to lodge an objection out of time, the Appellant failed to demonstrate that it subsequently filed a valid objection [56]. It held that in the absence of evidence of a properly lodged objection and a corresponding Review decision, there was no appealable decision before it, and since its jurisdiction is appellate in nature, the appeal lacked a proper legal foundation [56].
The Tribunal held that to inquire into matters not ventilated before the Commissioner would convert it into a court of first instance, contrary to the appellate framework, and declined to do so [57]. Having found the appeal incompetent, the Tribunal held that analysis of the remaining issue was rendered moot [58, 59].
Outcome
The Tribunal found and held that the appeal was incompetent [58, 60]. It ordered that the appeal be struck out and that each party bear its own costs [60].
Major issues / areas of contention
- Whether the appeal was competent.
- Whether the Respondent erred in deviating from the transaction value method in favour of the transaction value of identical goods method.