Judgment summary
The Appellant, Melly and Lelly General Contractors, appealed against the Respondent's Objection Decision dated 8th August 2025, which confirmed additional VAT and income (corporation) tax assessments.
The Tribunal considered whether the Objection Decision was justified. It found that the Appellant had failed to provide documents requested by the Respondent to support its objection, and that this failure remained unrebutted.
The Tribunal held that the Appellant did not discharge its burden of proof under Section 56(1) of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act, and dismissed the appeal, upholding the Respondent's Objection Decision.
Background
The Appellant is a private limited liability company registered in Kenya (para 1). The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, responsible for collection and administration of tax laws (para 2).
The Respondent issued the Appellant with a Notice of Assessment dated 22nd March 2024 relating to income (corporation) tax and VAT (para 3).
On 17th June 2025, the Appellant filed a late objection to the Notice of Assessment. On 8th August 2025, the Respondent issued its Objection Decision (para 4).
Aggrieved by the Objection Decision, the Appellant filed the Appeal by Notice of Appeal dated 8th December 2025 (para 5).
Core dispute
In its Memorandum of Appeal dated 8th December 2025, the Appellant raised grounds that the Respondent erred in assessing the tax payable, failed to consider the Appellant's nature of business, failed to consider allowable deductions incurred in generating income, and failed to accord the Appellant a fair hearing despite lodging an objection (para 6).
The Appellant stated it had filed self-assessment returns for income tax (company) and VAT for the years of income ended 2022, September 2022, November 2022 and July 2015, to which the Respondent raised additional assessments (para 8). The Appellant also stated that no Objection Decision was issued on the iTax platform for the objection lodged for the VAT return in the period July 2015 (para 10).
The Respondent averred that the Appellant only provided bank statements from Equity Bank A/C no. 0190280893038, and failed to provide requested records including audited accounts, trial balance, sales and purchase invoices, sales and purchase ledgers, bank reconciliations, support invoices for disallowed inputs, support ledgers for disallowed inputs, and support for a material bank deposit, despite requests dated 19th June 2025, 26th June 2025, 9th July 2025, 15th July 2025 and 22nd July 2025 (paras 13 to 16).
The Respondent relied on Sections 51(3)(c), 23(b), 24 and 56 of the Tax Procedures Act, and cited Fuel Link Limited vs Commissioner of Investigation & Enforcement for the proposition that absence of requested documentation renders a Notice of Objection invalid (paras 17 and 19).
The Appellant prayed that the Appeal be allowed with costs and that the Objection Decision dated 8th August 2025 be discharged and set aside (para 11). The Respondent prayed that the Appeal be dismissed with costs and that the Objection Decision be upheld (para 22).
Court findings
The Tribunal framed the issue for determination as whether the Respondent's Objection Decision dated 8th August 2025 was justified (para 23).
The Objection Decision confirmed additional VAT and income tax assessments of Kshs. 6,258,414.00 inclusive of interest and penalty for September and November 2022, and the 2022 year of income (para 24).
The Tribunal found it was not contested that the Respondent had sought specified documents from the Appellant, being audited accounts, trial balance, sales and purchase invoices, sales and purchase ledgers, bank reconciliations, support invoices for disallowed inputs, support ledgers for disallowed inputs, and support for the material bank deposit (para 25).
The Tribunal noted that the Respondent's contention that the Appellant did not provide these documents remained unrebutted, and there was no evidence that the Appellant availed any documents to validate its objection (para 26).
The Tribunal referred to Section 59 of the Tax Procedures Act (cap 469B) on the duty to produce documents, Section 56(1) of the Tax Procedures Act on the taxpayer's burden of proof, and Section 30 of the Tax Appeals Tribunal Act (cap 469A) on the appellant's burden of proof (paras 27 to 29).
The Tribunal also referred to Abyssinia Iron and Steel Ltd -vs- Commissioner of Customs and Border Control (TAT No. 435 of 2022) regarding the shifting burden of proof between taxpayer and Respondent (para 30).
The Tribunal held that the Appellant did not sufficiently support its objection against the additional VAT and income tax assessments, and that the Respondent's Objection Decision dated 8th August 2025 was therefore justified (para 31).
Outcome
The Tribunal found that the Appeal lacked merit (para 32).
The Appeal was dismissed. The Respondent's Decision dated 8th August 2025 was upheld. Each party was ordered to bear its own costs (para 32).
Major issues / areas of contention
- Whether the Respondent erred in fact and in law in assessing the tax payable.
- Whether the Respondent failed to consider the Appellant's nature of business.
- Whether the Respondent failed to consider the Appellant's allowable deductions incurred in generating income for the period.
- Whether the Respondent failed to accord the Appellant a fair hearing despite the Appellant lodging an objection.
- Whether the Respondent's Objection Decision dated 8th August 2025 was justified given the Appellant's alleged failure to provide requested supporting documents.