Judgment summary
Vibi Energy Limited appealed against a decision of the Commissioner of Domestic Taxes dated 29th September 2025, which had refused the Appellant's application for an extension of time to lodge a notice of objection against a Value Added Tax default assessment for May 2025.
The Tribunal, having considered the pleadings, identified the threshold issue of its own jurisdiction. It found that the letter of 29th September 2025 only declined the extension application under Section 51(7) of the Tax Procedures Act and confirmed the assessed liability remained due; it did not constitute an objection decision under Section 51(8) of the TPA.
Following the High Court decision in Commissioner of Investigations & Enforcement v Vyas t/a Rocon Enterprises, the Tribunal held that such a refusal is not an appealable decision and is instead amenable to judicial review before the High Court. The Appeal was accordingly struck out for want of jurisdiction, with each party bearing its own costs.
Background
The Appellant is a limited liability company registered in Kenya and registered for Value Added Tax, with its registered address at Chepsion, Kipkelion District (para 1).
The Respondent raised a Value Added Tax default assessment against the Appellant for the period 1st May 2025 to 31st May 2025, disclosing output tax of Kshs. 18,091,520.73, deductible input tax of Kshs. 15,045,174.60, and net Value Added Tax payable of Kshs. 3,046,346.13 (para 3).
The date on which the default assessment was raised was not uniformly recorded, with the Respondent's documents placing it on 23rd May 2025 and the Appellant's documents placing it on 23rd July 2025 (para 4).
On 15th September 2025, the Appellant lodged a notice of objection on iTax, citing 'Other Reasonable Cause' for the lateness, explaining that iTax had returned an error and that it was assisted at the Respondent's office (paras 5, 14).
By email of 22nd September 2025, the Respondent asked the Appellant to furnish documents supporting the grounds for the late objection (para 6). By letter dated 29th September 2025, the Respondent declined the extension of time, citing the Appellant's failure to provide supporting documents under Section 51(7) of the Tax Procedures Act 2015, and confirmed that the principal VAT liability, penalty and interest remained due and payable (paras 7-8).
Aggrieved, the Appellant lodged a Notice of Appeal on 30th January 2026 (para 9).
Core dispute
The Appellant argued that the Respondent erred in issuing the additional VAT assessment for May 2025, that the assessment was inconsistent with Section 15(1) and Section 17(1) and (2) of the VAT Act, and that the assessed sum was excessive, malicious and unrelated to its true tax position (para 10).
The Respondent maintained that the dispute turned on a single matter, namely the Appellant's failure to support its application for extension of time to lodge a notice of objection as required under Section 51(7) of the Tax Procedures Act, and that in the absence of a valid objection the assessment remained final (paras 22, 29).
The Tribunal itself raised, as a threshold issue not contested by either party, whether it had jurisdiction to entertain the Appeal at all, given the nature of the decision under review (para 32).
Court findings
The Tribunal held that jurisdiction is conferred by statute alone and cannot be assumed or conferred by the consent, silence or acquiescence of the parties, citing Owners of Motor Vessel 'Lilian S' v Caltex Oil (Kenya) Ltd [1989] eKLR (paras 34-35).
It found that the letter of 29th September 2025 did two things only: it declined the Appellant's application for an extension of time under Section 51(7) of the TPA, and it recorded that the assessed liability, with penalty and interest, remained due and payable. No notice of objection was ever admitted, and no objection decision within the meaning of Section 51(8) of the TPA came into existence (para 37).
Applying Commissioner of Investigations & Enforcement v Vyas t/a Rocon Enterprises (Income Tax Appeal E144 of 2021) [2022] KEHC 16027 (KLR), the Tribunal held that a communication under Section 51(7) of the TPA determines only whether time will be enlarged and decides nothing about an assessment under Section 52, and that such a communication is amenable to judicial review rather than appeal (paras 38-39).
The Tribunal found that the decision of 29th September 2025 was, in substance and form, a refusal under Section 51(7) of the TPA, and therefore not an appealable decision within the meaning of Section 3 of the TPA. It held itself bound by the High Court decision under the doctrine of stare decisis (paras 40, 42).
The Tribunal further found that the grounds in the Memorandum of Appeal directed at the correctness of the default assessment were beyond its reach, since such grounds could only come before it through an objection decision under Section 51(8) of the TPA, which did not exist (para 41).
Outcome
The Tribunal held that the Respondent's decision dated 29th September 2025 was not an appealable decision within the meaning of Section 3 of the Tax Procedures Act, and that it lacked jurisdiction to entertain the Appeal (para 42).
The Appeal was found to be incompetent and was struck out. Each party was ordered to bear its own costs (para 43).
Major issues / areas of contention
- Whether the Tax Appeals Tribunal has jurisdiction to entertain an appeal against a letter refusing an extension of time to lodge a late notice of objection under Section 51(7) of the Tax Procedures Act.
- Whether such a refusal letter constitutes an 'appealable decision' or an 'objection decision' within the meaning of Section 3 and Section 51(8) of the Tax Procedures Act.
- Whether the Appellant's grounds challenging the correctness of the underlying VAT default assessment could be considered by the Tribunal in the absence of a valid objection decision.
- Whether the Appellant discharged the burden under Section 51(7) of the Tax Procedures Act to support its application for extension of time to lodge a late objection.