Judgment summary
The Tribunal determined a preliminary objection raised by the Commissioner of Domestic Taxes challenging the competence of an appeal filed by Lakiis General Builders (K) Limited against VAT additional assessments for March and May 2022.
The Tribunal found that the appeal had been filed more than two years after the objection decision, far beyond the 30-day period prescribed under Section 13(1) of the Tax Appeals Tribunal Act, and that no application for extension of time had been made under Section 13(3) and (4) of the Act.
Having found that it lacked jurisdiction, the Tribunal struck out the appeal without considering the merits of the dispute.
Background
The Appellant, Lakiis General Builders (K) Limited, is a limited liability company incorporated in Kenya and a registered taxpayer whose principal business activity is contractual and related works (para 1).
The Respondent issued the Appellant with VAT additional assessments for the period March and May 2022 on 16th August 2022 amounting to Kshs. 2,438.512.00 (para 3).
The Appellant lodged a late objection on 20th September 2023. The Respondent reviewed the objection and on 2nd October 2023 issued a decision, described in the background as an objection decision partially allowing the Appellant's objection (para 4).
Dissatisfied, the Appellant filed a Notice of Appeal dated 22nd December 2025 (para 5). The Respondent thereafter filed a Notice of Preliminary Objection dated 11th August 2026, impugning the competence of the Appeal (para 6).
Core dispute
The Respondent raised a preliminary objection contending that the Appeal was filed out of time, contrary to Section 13(1), (2), (3) and (4) of the Tax Appeals Tribunal Act, without the Appellant seeking leave of the Tribunal to file out of time, and that the Tribunal therefore lacked jurisdiction to hear the substantive Appeal (paras 15 to 16).
In the alternative, on the merits, the Respondent contended that the Appellant's objection, lodged more than a year after the assessments, was invalid for failing to meet the requirements of Section 51(3) and 51(7) of the Tax Procedures Act, 2015, including the requirement to precisely state grounds of objection and to substantiate the claim of sickness with evidence (paras 27 to 45).
The Appellant maintained that its late objection was justified by sickness under Section 51(7) of the Tax Procedures Act, that it had attached medical reports which the Respondent failed to consider, and that the additional assessments were excessive, partly because they related to pending bills from its customer, Belgut CDF, which had not been recognised as revenue (paras 9 to 12).
Court findings
The Tribunal held that jurisdiction is a threshold issue which must be determined before the merits of an appeal can be considered, citing Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR (paras 58, 59).
The Tribunal found as undisputed that the Respondent issued its decision on 2nd October 2023 and that the Appellant filed the Appeal at the Tribunal on 22nd December 2025, more than two years later and well beyond the 30-day statutory period under Section 13(1)(a) and (b) of the TAT Act (para 59).
The Tribunal noted that Section 13(3) and (4) of the TAT Act provides a procedure for seeking an extension of time to file a notice of appeal out of time, including on grounds of sickness, but found that the Appellant did not seek any such extension (paras 62 to 63).
Relying on W.E.C. Lines Ltd vs. The Commissioner of Domestic Taxes [TAT Case No. 247 of 2020] and Boss Freight Terminal Ltd vs Commissioner of Domestic Taxes (2017) eKLR, the Tribunal held that the special statutory procedure for filing appeals must be strictly adhered to and that whether an appeal is filed on time goes to jurisdiction (paras 63 to 64).
The Tribunal found that the Appeal was not properly before it and that it therefore had no jurisdiction to determine it on its merits. Having made this finding, the Tribunal did not consider the second issue, namely whether the Respondent's decision was justified, as it had been rendered moot (paras 65 to 66).
Outcome
The Tribunal held that the Appeal was incompetent and unsustainable in law.
The Appeal was struck out.
Each party was ordered to bear its own costs (paras 67 to 68).
Major issues / areas of contention
- Whether there was a valid appeal on record, given the time of filing.
- Whether the Appellant was required to seek leave of the Tribunal under Section 13(3) and (4) of the TAT Act before filing its Notice of Appeal out of time.
- Whether the Respondent's decision on the VAT additional assessments was justified (this issue was not determined, having been rendered moot).