Judgment summary
The Appellant, Mekelo Company Limited, appealed against the Respondent's decision of 24th June 2025 rejecting its application for extension of time to lodge a late notice of objection to a VAT assessment of Kshs.2,211,048 for the period 2020 to 2024 (paras 3, 5).
The Tribunal identified a single issue for determination: whether it had jurisdiction to hear the appeal (para 66). It found that the Appellant had lodged its Notice of Appeal on 1st October 2025, more than 30 days after being served with the rejection notice on 24th June 2025, and without leave of the Tribunal as required under Section 13(3) and (4) of the TAT Act (paras 76, 79).
Having found that it lacked jurisdiction, the Tribunal held that it could not proceed to determine the merits of the appeal and struck out the appeal (paras 77-80).
Background
The Appellant is a private limited company incorporated under the Companies Act, whose principal activity is mounting sign posts, event organisation and advertisement (para 1). The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 (para 2).
The Respondent reviewed the Appellant's vatable income and assessed VAT amounting to Kshs.2,211,048 for the period 2020 to 2024, on the basis that the Appellant had filed nil returns despite having taxable revenue (paras 3, 18, 38).
The Appellant stated that its official email account was breached in late 2024, preventing it from receiving communications, and that it only discovered this in May 2025, after which it opened a new email address (paras 11, 69). The Respondent had issued an additional VAT assessment, communicated by email, which the Appellant said it did not receive because of the email problems (para 70).
The Appellant lodged an application for a late objection by letter dated 11th June 2025 (paras 4, 71). The Respondent, by email dated 18th June 2025, requested supporting documents by 21st June 2025 (paras 19, 72). The Respondent rejected the application for extension of time and confirmed the assessment on 24th June 2025 (paras 5, 73). The Appellant filed its Notice of Appeal on 1st October 2025 (para 6).
Core dispute
The Appellant sought to have the Tribunal set aside the Respondent's rejection of its late objection and direct the Respondent to accept the late objection and amend the VAT liability (para 15). It argued that the delay in objecting was caused by an email breach beyond its control and that the two-day period given by the Respondent to provide supporting evidence was unreasonable (paras 12-13).
The Respondent argued that the Appellant failed to satisfy the mandatory requirements under Section 51(6) and (7) of the Tax Procedures Act for an extension of time, having failed to provide reasons or supporting evidence for the delay when requested (paras 22-23, 39-40). The Respondent further submitted that the appeal itself was filed out of time and without leave, contrary to Sections 12 and 13 of the Tax Appeals Tribunal Act, and was therefore incompetent for want of jurisdiction (paras 32, 35-37).
Court findings
The Tribunal considered the pleadings and submissions and identified the sole issue for determination as whether it had jurisdiction to determine the appeal (para 66).
The Tribunal noted that under Section 51(2) of the TPA a taxpayer must object within thirty days, and Section 51(6) permits an application for extension of time, with Section 51(7) providing the grounds for granting leave (para 75).
The Tribunal found that, apart from the Appellant's late objection to the Respondent, the Appellant had also approached the Tribunal outside the statutory timeframe. Section 51(12) of the TPA requires a taxpayer to challenge the Respondent's decision within thirty days, yet the Appellant, having been served with the rejection notice on 24th June 2025, lodged its Notice of Appeal only on 1st October 2025, without leave of the Tribunal under Section 13(3) and (4) of the TAT Act (para 76).
Relying on Felister Wakonyo Waruhiu vs. Joseph Wachira Mwangi, Civil Appeal No. 8 of 2013, and Owners of Motor Vessel "Lilian S" v Caltex Oil (K) Limited [1989] eKLR, the Tribunal held that the competency of an appeal filed out of time goes to jurisdiction, that jurisdiction cannot be cured by the overriding objective, and that a tribunal without jurisdiction must down its tools (paras 77-78).
The Tribunal acknowledged that striking out an appeal is a draconian option but held that, having found it lacked jurisdiction, it had no choice but to do so (para 79).
Outcome
The Tribunal found the Appeal incompetent and struck it out. Each party was ordered to bear its own costs (paras 80-81).
Major issues / areas of contention
- Whether the Tribunal had jurisdiction to determine an appeal filed outside the statutory timeframe.
- Whether the Appellant's Notice of Appeal, filed on 1st October 2025 after service of the rejection notice on 24th June 2025, complied with the 30-day period under Section 51(12) of the Tax Procedures Act.
- Whether leave of the Tribunal under Section 13(3) and (4) of the Tax Appeals Tribunal Act was required and obtained before filing the appeal out of time.
- Whether the Respondent properly rejected the Appellant's application for extension of time to lodge a late objection under Section 51(7) of the Tax Procedures Act.
- Whether the Appellant provided sufficient evidence to the Respondent to justify the delay caused by the alleged email breach.