Judgment summary
The Appellant, a construction company, appealed against an objection decision by the Commissioner of Domestic Taxes dated 12th November 2025, which confirmed VAT and income tax assessments for the period 2016 to 2023 [3], [4].
The Tribunal identified two issues for determination, namely whether the appeal was competent and whether the Respondent erred in confirming the assessment [34].
The Tribunal treated the Respondent's reliance on section 51(7) of the TPA and the invalidation notice as a preliminary objection [35]. It found that the Appellant had filed its notice of objection out of time and had not obtained leave from the Respondent to object out of time [45].
The Tribunal held that the appeal was incompetent, that it lacked jurisdiction to hear and determine it, and that the appeal was available for striking out. It concluded that analysis of the remaining issue was rendered moot [46], [47].
Background
The Appellant is a limited liability company whose principal activity is in the construction sector [1]. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 [2].
The Respondent undertook a VAT and income tax return review of the Appellant for the period 2016 to 2023, and issued an assessment dated 9th October 2019. The Appellant, being dissatisfied, lodged notices of objection dated 23rd October 2025 [3].
The Respondent, upon considering the objection, issued an objection decision dated 12th November 2025 confirming the assessment [4]. The Appellant filed a notice of appeal on 25th November 2025 [5].
The Appellant stated that it was registered for income tax company obligation effective 2nd September 2009, rent income obligation effective 1st July 2021, VAT obligation effective 2nd September 2025, and PAYE effective 1st December 2019 [8]. The Appellant stated that the Respondent raised VAT assessments on 27th March 2023, 20th December 2022, 21st December 2022, 21st March 2024, 19th March 2024, 22nd March 2024, 28th March 2024, and 12th April 2024, and that it objected to the assessments on 23rd October 2025 [37].
Core dispute
The Appellant contended that the Respondent erred in fact and in law in assessing the tax, in failing to consider the Appellant's nature of business, in failing to consider the Appellant's allowable deductions, and in failing to accord the Appellant a fair hearing despite lodging an objection [6].
The Respondent contended that the Appellant failed to support its ground of objection under Section 51(7) of the TPA, that it issued an invalidation notice on 6th November 2025, and that the Appellant failed to provide records requested, including audited accounts, trial balances, sales and purchases ledgers, and sales and purchases invoices [17], [18].
The Respondent argued that the notice of objection was not validly lodged under Section 51(3) of the TPA, that the Appellant bore the burden of proof under section 56 of the TPA and section 30 of the TATA, and that it was entitled to assess to the best of the Commissioner's judgment under section 31(1) of the TPA [19], [24], [25], [29].
Court findings
The Tribunal noted that the Respondent had invoked section 51(7) of the TPA in its objection decision and had issued an invalidation notice on 6th November 2025, which it treated as a preliminary objection [35].
The Tribunal cited Mukisa Biscuits Manufacturing Co. Ltd v West End Distributor Ltd [1969] E.A 696 on what constitutes a preliminary objection [36].
The Tribunal held that section 51(1) of the TPA requires a taxpayer to lodge an objection against a tax decision before proceeding under any other written law, and that a taxpayer who fails to lodge a notice of objection within the required timeline cannot lawfully invoke the powers of the Tribunal [38], [39].
The Tribunal noted that under section 51(2) of the TPA a taxpayer must object within thirty days of being notified of the decision, and that section 51(6) allows a taxpayer to apply in writing for an extension of time to lodge a notice of objection [40], [41]. It referred to section 51(7) on the Commissioner's discretion to allow such an application [42].
The Tribunal cited Commissioner of Investigations & Enforcement v Vyas t/a Rocon Enterprises (Income Tax Appeal E144 of 2021) [2022] KEHC 16027 (KLR), noting that decisions under section 51(7) of the TPA are not appealable and are subject to judicial review rather than appeal [43].
By the Appellant's own statement, it did not object to the assessments within thirty days [41]. The Tribunal found that the Appellant filed a late notice of objection and did not obtain leave from the Respondent to object out of time, and was therefore estopped by section 51(1) of the TPA from invoking the jurisdiction of the Tribunal [44], [45].
Outcome
The Tribunal found and held that the appeal was incompetent and that it lacked jurisdiction to hear and determine it [46], [47].
The Tribunal ordered that the appeal be struck out and that each party bear its own cost [47].
Major issues / areas of contention
- Whether the appeal was competent.
- Whether the Respondent erred in confirming the assessment.