'(Being an Appeal from the Judgment of the Tax Appeals Tribunal at Nairobi delivered on 11th October 2024 in Tax Appeals Tribunal Appeal No. E570 of 2023)
Background
1. The Commissioner of Customs and Border Control, the appellant herein, was dissatisfied with the decision of the Tax Appeals Tribunal delivered on 11th October 2024 in Tax Appeal Tribunal Appeal No. E570 of 2023. The appellant filed this appeal through a notice of appeal dated 24th October 2024, followed by a memorandum of appeal dated 18th November 2024, a record of appeal dated 18th November 2024, and a supplementary record of appeal dated 30th April 2025.
Grounds of Appeal
2. Although expressed in many paragraphs, the appellant’s grounds of appeal can be summarized into one, that is, that the Tribunal erred by failing to take into account the evidence tendered by Stanley Karuri, the appellant’s witness and thereby arrived at the wrong findings being:
a. that the appellant did not provide cogent reasons for deviating from the transaction value method, which the Tribunal deemed the correct method applicable concerning Entry Number 23MBAIM404058194,
b. that there was no allegation of fraud, and
c. that the respondent’s documentation concerning the said consignment was consistent and sufficient.
3. The appellant argues that the failure to consider Stanley Karuri’s evidence infringed on the appellant’s right to a fair hearing and principles of natural justice.
4. The appellant prays for orders that the appeal be allowed and the judgment of the Tribunal delivered on 11th October 2024 be set aside, the appellant''s Review Decision dated 4th August 2023 be upheld and costs be awarded to the appellant.
Submissions
5. The appeal was heard on the written submissions of the appellant only. Despite service, the respondent did not respond to the appeal. The submissions are considered in the analysis that follows. In the submissions, the appellant raised the following issues for determination.
a. Whether the Tribunal erred in law and in fact by failing to consider the evidence of Stanley Karuri hence infringing on the appellant’s right to a fair hearing?
b. Whether the Tribunal erred in law in finding that the appellant’s abandonment of the transactional value method was wrong.
c. What is the appropriate valuation method in respect to Entry Number 23MBAIM404058194?
The Facts
6. The facts of the dispute between the appellant and the respondent are gathered from the undated statement of facts filed by the respondent herein through its tax agent ARM & Associates, before the Tax Appeals Tribunal, the appellant’s statement of facts dated 17th October 2023 before the Tribunal and the submissions by the appellant before the Tribunal. The respondent did not file submissions before the Tribunal.
7. The dispute between the appellant and the respondent arises from the fact that the appellant subjected the respondent’s import of various raw materials under import customs entry number 23MBAIM404058194 to a custom’s uplift from what the respondent had declared the unit value for Super Absorbent Resin FOB as USD 323.80 KShs 1,561,405/= to USD 1940 per metric tonne. The respondent’s protest and appeal to the appellant did not bear fruits. The respondent subsequently appealed to the Tax Appeals Tribunal (TAT) where the appellant’s decision was reversed.
8. According to the appellant, under entry number 23MBAIM404058194, the declared unit value for super absorbent resin FOB was USD 323.80 but upon physical verification by the appellant this value was found to be low and the recommended applicable FOB after the uplift was USD 1940 per metric ton. The respondent contended that it reviewed the documents provided by the respondent including the invoice, proforma invoice and packing list and found that the commercial invoice No. UR23-00100 dated 9th June 2023 did not bear terms of payment and no evidence of payment was provided. The appellant therefore found the supporting documents to be insufficient in demonstration of the declaration and in consideration of accepted transaction values of similar importations.
9. It is the appellant’s case that the respondent failed to offer satisfactory explanation to support its declared values and the same was found to be low compared with prevailing FOB values from similar importations from the same country of origin.
Analysis
10. The TAT evaluated the case by the parties and allowed the appeal by the respondent. Among the TAT’s findings on the respondent’s appeal before it were as follows:
“Whereas the Appellant appealed against the Respondent’s decision dated 4th August 2024 for entry number 23MBAIM404058194, the Appellant pleaded its case against the Respondent’s decisions on entry numbers 23MBAIM402652722 and 23MBAIM403687223. The Tribunal has abstained from examining the Respondent’s decisions on entry numbers 23MBAIM402652722 and 23MBAIM403687223 on grounds that the Appellant failed to file a Notice of Appeal signaling appealing against the Respondent’s decisions in relation to these entries. “
11. In its undated statement of facts filed before the Tribunal the respondent in paragraph 3 stated that “the Appellant (respondent herein) has imported various raw materials for its manufacturing process. In all occasions, the raw materials have been subject to customs uplift by the Respondent.”
12. The respondent (appellant at the TAT) provided details of three of its transactions that had been subjected to customs uplift by the appellant (respondent at the TAT) as entry numbers 23MBAIM402652722, 23MBAIM403687223 and the subject of this appeal, entry number 23MBAIM404058194. For reasons stated in the paragraph quoted above from the TAT’s decision, it did not proceed to determine the other two entries.
13. The complaints by the respondent against the appellant’s decisions to subject the imports to customs uplift were similar in all the three transactions. The appellant rejected the respondent’s protests against its decisions and maintained the customs uplift in all of them. The appellant’s decisions were made on 17th July 2022 in respect of entry number 23MBAIM402652722, and on 4th August 2022 in respect of entry number 23MBAIM404058194 the subject of this appeal. I have not seen correspondence in the respondent’s statement of facts filed before the Tribunal in respect of entry number 23MBAIM403687223. The statement of facts filed by the appellant refers only to two entry numbers 23MBAIM402652722 and 23MBAIM404058194.
14. The respondent appears to have filed a single appeal to the TAT against the appellant’s decisions in the two (or are they three) cases. This is evident from the respondent’s Notice of Appeal to the TAT which indicated that it intended to appeal the decision of the Commissioner dated 4th August 2023. The undated memorandum of appeal to the TAT also states in the first paragraph that the respondent (appellant therein) was dissatisfied with the decision of the appellant (respondent therein) dated 4th August 2023 and was appealing against it as per the grounds listed. However, in the prayers, it seeks for “the Respondent’s objection decision dated 3rd April 2023 be set aside.” Yet the respondent’s (appellant before the TAT) statement of facts, also undated, refers to the two decisions made by the appellant herein against the respondent in respect of entry numbers 23MBAIM402652722 and 23MBAIM404058194 and respectively made on 17th July 2023 and 4th August 2023. There is no objection decision by the appellant against the respondent made on 3rd April 2023 in respect of the issues the subject of the appeal before the Tribunal.
15. This mix-up is what led to the TAT’s finding that, “whereas the Appellant appealed against the Respondent’s decision dated 4th August 2024 for entry number 23MBAIM404058194, the Appellant pleaded its case against the Respondent’s decisions on entry numbers 23MBAIM402652722 and 23MBAIM403687223.” It is difficult to fathom how the Tribunal proceeded to determine a case that had not been pleaded, but it did.
16. This situation was exacerbated by the fact that the respondent barely attended the proceedings before the TAT. In the entire proceedings, despite being served with mention and hearing notices every time the matter was coming up, the respondent through its Tax Agent Jeff Kiraguri is recorded to have attended only once, on 14th December 2023. On this date, the Tribunal issued directions that parties to conclude the ADR process within the next 60 days and in default the matter to proceed to hearing. The matter was fixed for mention on 14th February 2024. On this date, in the absence of the appellant, the Tribunal gave directions that the matter proceeds for hearing by way of viva voce evidence. It was fixed for further mention for 6th March 2024.
17. On 6th March 2024, the Tribunal recorded that the appellant (UR Homes International Ltd) was absent. Also, that the respondent’s (the Commissioner) witness statement was on record. Indeed, the respondent had filed two witness statements, by Raymond Koech dated 28th February 2024 which was in respect of Ur Homes’ entry number 23MBAIM402652722 and Stanley Karuri of the same date and which was in respect of entry number 23MBAIM404058194. The Tribunal further directed that the appellant (Ur Homes) to file and serve witness statements by 31st March 2024 and in default to proceed by way of submissions.
18. The matter was fixed for two further mentions but the appellant (Ur Homes) never attended. The appeal was fixed for hearing on 16th May 2024.
19. On 16th May 2024, the appellant (Ur Homes) was absent. The Tribunal recorded that the appellant had been served both by e-mail and text messages and directed that the matter to proceed for hearing in the appellant’s absence. For the hearing the Tribunal stated that each of the witness statements of the respondent’s (Commissioner’s) two witnesses be adopted as evidence-in-chief and in the absence of the appellant (Ur Homes) the witnesses had not been cross-examined. The Tribunal then directed the parties to file submissions by 30th May 2024 and that judgment would be on notice.
20. The respondent (Commissioner) filed its undated submissions where in the introduction it stated that “Before the Tribunal is an appeal by the Appellant seeking the Honourable Tribunal sets aside the review decisions dated the 17th July 2023 and 4th August 2023.” It went ahead to argue the appeal on the two entry numbers 23MBAIM402652722 and 23MBAIM404058194. It prayed that the Tribunal dismisses the appellant’s (Ur Homes) appeal and upholds the respondents (Commissioner’s) review decisions issued on the 17th July 2023 and 4th August 2023.
21. The judgment was delivered on 11th October 2024 whereby the appellant’s appeal was upheld.
22. In the present appeal, the appellant (the Commissioner) submits that this court should subject the entire decision of the TAT to review on both law and fact as this being an appeal from a custom’s decision arising under the East African Community Customs Management Act (EACCMA) and which is not one of the Tax Laws envisaged under the Tax Procedures Act, section 56 of the said Act which limits appeals from the TAT to the High Court to points of law is not applicable. However, that this Court should proceed under section 32 of the Tax Appeals Tribunal act which does not limit the determination of appeals to this court to points of law only as the Tax Procedures Act does.
23. That is an interesting submission which needs better and further consideration given that section 2 of the Tax Appeals Tribunal Act defines tax laws to include the EACCMA in its meaning. Arguments are required to determine whether it was deliberate or inadvertent to leave out the EACCMA as a tax law in the definition under the Tax Procedures Act. This appeal is decided on a different point and I will therefore not delve into that issue.
24. Sub-sections 27 (2) and (3) of the Tax Appeals Tribunals Act (Cap. 469A) Laws of Kenya on the mode of hearing appeals before the Tribunal provide that:
(2) If an appellant fails, without reasonable cause, to appear for the hearing of the proceedings, the Tribunal may dismiss the appeal.
(3) If an appellant fails without reasonable cause to proceed with the appeal or comply with a direction by the Tribunal, the Tribunal may dismiss the appeal.
25. Section 26(1) of the same Act on its part provides that the Tribunal shall ensure that every party to proceedings is given a reasonable opportunity to present its case.
26. Section 25 of the Act which deals with representation before the Tribunal provides as follows:
(1) For the hearing of proceedings before the Tribunal, the appellant may appear in person or be represented by a tax agent or by an advocate of the High Court of Kenya.
(2) If it is proved to the satisfaction of the Tribunal that owing to absence of the appellant from Kenya or due to sickness or any other reasonable cause, the appellant is prevented from attending, at the hearing of the appeal on the date and the time fixed for hearing, the Tribunal may adjourn the hearing of the appeal for such reasonable time as it may consider appropriate.
27. The respondent’s documents before the Tribunal were filed by a Tax Agent who attended proceedings of the case on one occasion for mention. He did not attend the hearing.
28. As noted above, the respondent (who was the appellant before the Tribunal) did not take any further action in the matter after filing the statement of facts. The Tribunal therefore had a discretion on whether or not to dismiss the appeal since it is clear that it had given the respondent a reasonable opportunity to present its case as provided under section 26(1) of the Tax Appeals Tribunal Act. Furthermore, the Tribunal adjourned the hearing of the appeal on two occasions even though no reasonable cause had been shown by the respondent to have prevented it from attending at the hearing.
29. For the present appeal, this court gave directions on 5th May 2025 that the appellant files submissions within ten days and serve the respondent. The appellant filed its submissions dated 16th June 2025. As stated above, the respondent never participated in the present appeal in spite of being served with notices to attend court.
30. It appears apparent from the record of the Tribunal that the respondent herein was never interested in prosecuting the appeal before the Tribunal.
31. Rule 20 (1) and (2) of the Tax Appeals Tribunal (Procedure) Rules provides with respect to hearings as follows:
(1) The Tribunal shall at the hearing of an appeal, hear the appellant and his witnesses first and the respondent shall be given an opportunity to cross examine the witness, if any.
(2) Before the case is concluded, the evidence of the respondent shall be heard, and the appellant shall be given the opportunity to cross examine each witness followed by re-examination by the respondent after which the parties may make oral or written submissions.
(3) The Tribunal may, at any time, put questions to either party or to any witness, and may, at its discretion, call additional evidence as it may be necessary for further clarification of the issues raised at the hearing of the appeal.
(4) The Tribunal may, for sufficient reason, at any time after beginning the hearing of the appeal, adjourn the hearing; and in every such situation, the Tribunal shall fix another convenient day for further hearing.
32. Rule 27 of the Tax Appeals Tribunal (Procedure) Rules provides that the Tribunal may determine an appropriate procedure where there are no applicable procedures under the Rules or the Act.
33. The hearing before the Tribunal took the form of parties being directed to present viva voce evidence. They were directed to file witness statements first. The appellant (Ur Homes) did not comply with the Tribunal’s directions to file witness statements. The respondent filed its witness statements as indicated above.
34. In the case of Independent Electoral & Boundaries Commission -v- Jane Cheperenger & 2 others SC Petition No.5 of 2016 [2018] eKLR the Supreme Court underscored the importance of complying with Court orders and given directions, pointing out that every party has an obligation to honour the Court’s directions. The Supreme Court went ahead to state that whereas late filing of submissions was not patently incurable, and the Court had discretion to allow such late filing, the appellant had not moved the Court appropriately by way of an application for extension of time to file the said documents. The Supreme Court all the same, allowed the admission of the submissions that had been filed late, pointing out that the consideration to bear in mind is what prejudice had been suffered by the respondent due to the applicant’s failure to timeously file its submissions and whether the respondent could be facilitated to mitigate such prejudice as may have been suffered.
35. Applying similar reasoning to the present case, this court asks itself whether it was appropriate for the Tribunal to proceed with the respondent’s appeal where the respondent had shown that it was not interested in prosecuting it. It is important to note that the Tax Appeals Tribunal Act and the Rules made thereunder provide for a hearing of the appeal. There is no provision therein to dispense with the hearing of either party to the appeal or to vary the procedure provided for under the Rules 20 as set out above.
36. In this case, the appellant did not even attempt to offer any explanation of why it had not complied with the Tribunal’s directions on the hearing. The respondent (Ur Homes) herein as the appellant in that appeal did not attend the hearing altogether. What the respondent did before the Tribunal amounted to non-appearance at the hearing to prosecute the appeal. I can find no other explanation for that conduct other than that the respondent had abandoned the prosecution of its appeal before the Tax Appeals Tribunal.
37. In the case of Stephen Muthamia Marete & 2 others v Mary Naitore Kinyua (enjoined as the legal representative of the Estate of Patrick Kinyua Iringo) [2018] eKLR, faced with a similar situation where an appellant failed to file submissions in support of an appeal, the High Court observed and held as follows:
“In my view, when an Appellant has been ordered to file written submissions and he fails to do so as the Appellants have done in this case, the court should find, as it does in this case, that the appellant has failed to prosecute his appeal, or is no longer interested in pursuing it.”
38. The court went on to dismiss the appeal for want of prosecution. I am persuaded to follow this position even as it arises from the application of the Civil Procedure Act and the Rules made thereunder which do not have direct application to Tax appeals. Just like the Civil Procedure Act and the Rules, the Tax Appeals Tribunal Act and the Rules made thereunder for appeals to the Tax Appeals Tribunal provide for a hearing of the appeal. The appellant is required to prosecute its appeal followed by the respondent.
39. The question this court asks itself is what prejudice was occasioned to the appellant herein when the respondent failed to prosecute its appeal and yet the appellant was directed and did present its appeal?
40. The first and obvious one is that the failure to file witness statements and submissions caused the hearing at the Tribunal to be adjourned twice. This caused delay in the hearing and determination of the appeal.
41. Secondly, in asking the parties to file witness statements, it meant, and indeed it is the case that this was the trial of the case. The Tribunal took the position, which I find to be correct, that the statements of facts filed by the parties amounted to the pleadings. In that case, I need not restate the fact that pleadings are not evidence. This has been stated on many occasions. In the case of CMC Aviation Ltd v Kenya Airways Ltd (Cruisair Ltd ) [1978] KECA 9 (KLR), Madan, JA (as he then was) explained the position as follows:
“The pleadings contain the averments of the three parties concerned. Until they are proved, or disproved, or there is admission of them or any of them by the parties, they are not evidence and no decision could be founded upon them. Proof is the foundation of evidence. As stated in the definition of “evidence” in section 3 of the Evidence Act, evidence denotes the means by which an alleged matter of fact, the truth of which is submitted to investigation, is proved or disproved. Averments are matters the truth of which is submitted for investigation. Until their truth has been established or otherwise they remain unproven. Averments in no way satisfy, for example, the following definition of “evidence” in Cassell’s English Dictionary, p 394:
Anything that makes clear or obvious; ground for knowledge, indication or testimony; that which makes truth evident, or renders evident to the mind that it is truth.
The pleadings in a suit are not normally evidence. They may become evidence if they are expressly or impliedly admitted as then the admission itself is evidence. Evidence is usually given on oath. Averments are not made on oath. Averments depend upon evidence for proof of their contents.”
42. In the appeal before the Tribunal, there was no admission of any of the facts alleged by the appellant therein (Ur Homes) against the respondent (the Commissioner). Therefore, in the absence of evidence tendered to prove them as had been directed by the Tribunal, the averments remained mere allegations.
43. Thirdly, it is apparent that it was not clear which of the appellant’s decisions was being appealed due to the mix-up of the averments in the memorandum of appeal filed by the appellant (Ur Homes) as pointed out above. This led to the respondent (the Commissioner) making submissions on all the three decisions it had made against the respondent only for the Tribunal to state in its decision that it was considering only one.
44. Fourth, the respondent could not understand the reasoning behind the appellant’s challenge to its decision. In the circumstances, its case against the appellant on the appeal was based on conjecture given that it had already offered the respondent reasons for its decision.
Determination
45. I am satisfied and do find that the respondent in this appeal, which was the appellant before the Tribunal, failed to prosecute its appeal before the Tribunal. Consequently, the same should have been dismissed by the Tribunal for want of prosecution.
46. The respondent has equally failed to participate in the present appeal despite being duly served and notified to do so. That is conduct that should not be countenanced.
47. For the foregoing reasons, I am satisfied that the appeal herein has merit and the same is allowed. The decision of the Tax Appeals Tribunal to consider and allow the respondent’s appeal is hereby set aside and substituted with a decision dismissing the respondent’s appeal before the Tribunal with costs to the appellant herein.
48. It is hereby so ordered.
Dated, Signed and Delivered on the virtual platform Teams this 29th day of August 2025.
ANDAYI W. F.
JUDGE
In the presence of:
Mulinge (Ms) holding brief for Isutsa for the appellant.
N/A for the Respondent.
Carlos: Court Assistant.
'
Background
1. The Commissioner of Customs and Border Control, the appellant herein, was dissatisfied with the decision of the Tax Appeals Tribunal delivered on 11th October 2024 in Tax Appeal Tribunal Appeal No. E570 of 2023. The appellant filed this appeal through a notice of appeal dated 24th October 2024, followed by a memorandum of appeal dated 18th November 2024, a record of appeal dated 18th November 2024, and a supplementary record of appeal dated 30th April 2025.
Grounds of Appeal
2. Although expressed in many paragraphs, the appellant’s grounds of appeal can be summarized into one, that is, that the Tribunal erred by failing to take into account the evidence tendered by Stanley Karuri, the appellant’s witness and thereby arrived at the wrong findings being:
a. that the appellant did not provide cogent reasons for deviating from the transaction value method, which the Tribunal deemed the correct method applicable concerning Entry Number 23MBAIM404058194,
b. that there was no allegation of fraud, and
c. that the respondent’s documentation concerning the said consignment was consistent and sufficient.
3. The appellant argues that the failure to consider Stanley Karuri’s evidence infringed on the appellant’s right to a fair hearing and principles of natural justice.
4. The appellant prays for orders that the appeal be allowed and the judgment of the Tribunal delivered on 11th October 2024 be set aside, the appellant''s Review Decision dated 4th August 2023 be upheld and costs be awarded to the appellant.
Submissions
5. The appeal was heard on the written submissions of the appellant only. Despite service, the respondent did not respond to the appeal. The submissions are considered in the analysis that follows. In the submissions, the appellant raised the following issues for determination.
a. Whether the Tribunal erred in law and in fact by failing to consider the evidence of Stanley Karuri hence infringing on the appellant’s right to a fair hearing?
b. Whether the Tribunal erred in law in finding that the appellant’s abandonment of the transactional value method was wrong.
c. What is the appropriate valuation method in respect to Entry Number 23MBAIM404058194?
The Facts
6. The facts of the dispute between the appellant and the respondent are gathered from the undated statement of facts filed by the respondent herein through its tax agent ARM & Associates, before the Tax Appeals Tribunal, the appellant’s statement of facts dated 17th October 2023 before the Tribunal and the submissions by the appellant before the Tribunal. The respondent did not file submissions before the Tribunal.
7. The dispute between the appellant and the respondent arises from the fact that the appellant subjected the respondent’s import of various raw materials under import customs entry number 23MBAIM404058194 to a custom’s uplift from what the respondent had declared the unit value for Super Absorbent Resin FOB as USD 323.80 KShs 1,561,405/= to USD 1940 per metric tonne. The respondent’s protest and appeal to the appellant did not bear fruits. The respondent subsequently appealed to the Tax Appeals Tribunal (TAT) where the appellant’s decision was reversed.
8. According to the appellant, under entry number 23MBAIM404058194, the declared unit value for super absorbent resin FOB was USD 323.80 but upon physical verification by the appellant this value was found to be low and the recommended applicable FOB after the uplift was USD 1940 per metric ton. The respondent contended that it reviewed the documents provided by the respondent including the invoice, proforma invoice and packing list and found that the commercial invoice No. UR23-00100 dated 9th June 2023 did not bear terms of payment and no evidence of payment was provided. The appellant therefore found the supporting documents to be insufficient in demonstration of the declaration and in consideration of accepted transaction values of similar importations.
9. It is the appellant’s case that the respondent failed to offer satisfactory explanation to support its declared values and the same was found to be low compared with prevailing FOB values from similar importations from the same country of origin.
Analysis
10. The TAT evaluated the case by the parties and allowed the appeal by the respondent. Among the TAT’s findings on the respondent’s appeal before it were as follows:
“Whereas the Appellant appealed against the Respondent’s decision dated 4th August 2024 for entry number 23MBAIM404058194, the Appellant pleaded its case against the Respondent’s decisions on entry numbers 23MBAIM402652722 and 23MBAIM403687223. The Tribunal has abstained from examining the Respondent’s decisions on entry numbers 23MBAIM402652722 and 23MBAIM403687223 on grounds that the Appellant failed to file a Notice of Appeal signaling appealing against the Respondent’s decisions in relation to these entries. “
11. In its undated statement of facts filed before the Tribunal the respondent in paragraph 3 stated that “the Appellant (respondent herein) has imported various raw materials for its manufacturing process. In all occasions, the raw materials have been subject to customs uplift by the Respondent.”
12. The respondent (appellant at the TAT) provided details of three of its transactions that had been subjected to customs uplift by the appellant (respondent at the TAT) as entry numbers 23MBAIM402652722, 23MBAIM403687223 and the subject of this appeal, entry number 23MBAIM404058194. For reasons stated in the paragraph quoted above from the TAT’s decision, it did not proceed to determine the other two entries.
13. The complaints by the respondent against the appellant’s decisions to subject the imports to customs uplift were similar in all the three transactions. The appellant rejected the respondent’s protests against its decisions and maintained the customs uplift in all of them. The appellant’s decisions were made on 17th July 2022 in respect of entry number 23MBAIM402652722, and on 4th August 2022 in respect of entry number 23MBAIM404058194 the subject of this appeal. I have not seen correspondence in the respondent’s statement of facts filed before the Tribunal in respect of entry number 23MBAIM403687223. The statement of facts filed by the appellant refers only to two entry numbers 23MBAIM402652722 and 23MBAIM404058194.
14. The respondent appears to have filed a single appeal to the TAT against the appellant’s decisions in the two (or are they three) cases. This is evident from the respondent’s Notice of Appeal to the TAT which indicated that it intended to appeal the decision of the Commissioner dated 4th August 2023. The undated memorandum of appeal to the TAT also states in the first paragraph that the respondent (appellant therein) was dissatisfied with the decision of the appellant (respondent therein) dated 4th August 2023 and was appealing against it as per the grounds listed. However, in the prayers, it seeks for “the Respondent’s objection decision dated 3rd April 2023 be set aside.” Yet the respondent’s (appellant before the TAT) statement of facts, also undated, refers to the two decisions made by the appellant herein against the respondent in respect of entry numbers 23MBAIM402652722 and 23MBAIM404058194 and respectively made on 17th July 2023 and 4th August 2023. There is no objection decision by the appellant against the respondent made on 3rd April 2023 in respect of the issues the subject of the appeal before the Tribunal.
15. This mix-up is what led to the TAT’s finding that, “whereas the Appellant appealed against the Respondent’s decision dated 4th August 2024 for entry number 23MBAIM404058194, the Appellant pleaded its case against the Respondent’s decisions on entry numbers 23MBAIM402652722 and 23MBAIM403687223.” It is difficult to fathom how the Tribunal proceeded to determine a case that had not been pleaded, but it did.
16. This situation was exacerbated by the fact that the respondent barely attended the proceedings before the TAT. In the entire proceedings, despite being served with mention and hearing notices every time the matter was coming up, the respondent through its Tax Agent Jeff Kiraguri is recorded to have attended only once, on 14th December 2023. On this date, the Tribunal issued directions that parties to conclude the ADR process within the next 60 days and in default the matter to proceed to hearing. The matter was fixed for mention on 14th February 2024. On this date, in the absence of the appellant, the Tribunal gave directions that the matter proceeds for hearing by way of viva voce evidence. It was fixed for further mention for 6th March 2024.
17. On 6th March 2024, the Tribunal recorded that the appellant (UR Homes International Ltd) was absent. Also, that the respondent’s (the Commissioner) witness statement was on record. Indeed, the respondent had filed two witness statements, by Raymond Koech dated 28th February 2024 which was in respect of Ur Homes’ entry number 23MBAIM402652722 and Stanley Karuri of the same date and which was in respect of entry number 23MBAIM404058194. The Tribunal further directed that the appellant (Ur Homes) to file and serve witness statements by 31st March 2024 and in default to proceed by way of submissions.
18. The matter was fixed for two further mentions but the appellant (Ur Homes) never attended. The appeal was fixed for hearing on 16th May 2024.
19. On 16th May 2024, the appellant (Ur Homes) was absent. The Tribunal recorded that the appellant had been served both by e-mail and text messages and directed that the matter to proceed for hearing in the appellant’s absence. For the hearing the Tribunal stated that each of the witness statements of the respondent’s (Commissioner’s) two witnesses be adopted as evidence-in-chief and in the absence of the appellant (Ur Homes) the witnesses had not been cross-examined. The Tribunal then directed the parties to file submissions by 30th May 2024 and that judgment would be on notice.
20. The respondent (Commissioner) filed its undated submissions where in the introduction it stated that “Before the Tribunal is an appeal by the Appellant seeking the Honourable Tribunal sets aside the review decisions dated the 17th July 2023 and 4th August 2023.” It went ahead to argue the appeal on the two entry numbers 23MBAIM402652722 and 23MBAIM404058194. It prayed that the Tribunal dismisses the appellant’s (Ur Homes) appeal and upholds the respondents (Commissioner’s) review decisions issued on the 17th July 2023 and 4th August 2023.
21. The judgment was delivered on 11th October 2024 whereby the appellant’s appeal was upheld.
22. In the present appeal, the appellant (the Commissioner) submits that this court should subject the entire decision of the TAT to review on both law and fact as this being an appeal from a custom’s decision arising under the East African Community Customs Management Act (EACCMA) and which is not one of the Tax Laws envisaged under the Tax Procedures Act, section 56 of the said Act which limits appeals from the TAT to the High Court to points of law is not applicable. However, that this Court should proceed under section 32 of the Tax Appeals Tribunal act which does not limit the determination of appeals to this court to points of law only as the Tax Procedures Act does.
23. That is an interesting submission which needs better and further consideration given that section 2 of the Tax Appeals Tribunal Act defines tax laws to include the EACCMA in its meaning. Arguments are required to determine whether it was deliberate or inadvertent to leave out the EACCMA as a tax law in the definition under the Tax Procedures Act. This appeal is decided on a different point and I will therefore not delve into that issue.
24. Sub-sections 27 (2) and (3) of the Tax Appeals Tribunals Act (Cap. 469A) Laws of Kenya on the mode of hearing appeals before the Tribunal provide that:
(2) If an appellant fails, without reasonable cause, to appear for the hearing of the proceedings, the Tribunal may dismiss the appeal.
(3) If an appellant fails without reasonable cause to proceed with the appeal or comply with a direction by the Tribunal, the Tribunal may dismiss the appeal.
25. Section 26(1) of the same Act on its part provides that the Tribunal shall ensure that every party to proceedings is given a reasonable opportunity to present its case.
26. Section 25 of the Act which deals with representation before the Tribunal provides as follows:
(1) For the hearing of proceedings before the Tribunal, the appellant may appear in person or be represented by a tax agent or by an advocate of the High Court of Kenya.
(2) If it is proved to the satisfaction of the Tribunal that owing to absence of the appellant from Kenya or due to sickness or any other reasonable cause, the appellant is prevented from attending, at the hearing of the appeal on the date and the time fixed for hearing, the Tribunal may adjourn the hearing of the appeal for such reasonable time as it may consider appropriate.
27. The respondent’s documents before the Tribunal were filed by a Tax Agent who attended proceedings of the case on one occasion for mention. He did not attend the hearing.
28. As noted above, the respondent (who was the appellant before the Tribunal) did not take any further action in the matter after filing the statement of facts. The Tribunal therefore had a discretion on whether or not to dismiss the appeal since it is clear that it had given the respondent a reasonable opportunity to present its case as provided under section 26(1) of the Tax Appeals Tribunal Act. Furthermore, the Tribunal adjourned the hearing of the appeal on two occasions even though no reasonable cause had been shown by the respondent to have prevented it from attending at the hearing.
29. For the present appeal, this court gave directions on 5th May 2025 that the appellant files submissions within ten days and serve the respondent. The appellant filed its submissions dated 16th June 2025. As stated above, the respondent never participated in the present appeal in spite of being served with notices to attend court.
30. It appears apparent from the record of the Tribunal that the respondent herein was never interested in prosecuting the appeal before the Tribunal.
31. Rule 20 (1) and (2) of the Tax Appeals Tribunal (Procedure) Rules provides with respect to hearings as follows:
(1) The Tribunal shall at the hearing of an appeal, hear the appellant and his witnesses first and the respondent shall be given an opportunity to cross examine the witness, if any.
(2) Before the case is concluded, the evidence of the respondent shall be heard, and the appellant shall be given the opportunity to cross examine each witness followed by re-examination by the respondent after which the parties may make oral or written submissions.
(3) The Tribunal may, at any time, put questions to either party or to any witness, and may, at its discretion, call additional evidence as it may be necessary for further clarification of the issues raised at the hearing of the appeal.
(4) The Tribunal may, for sufficient reason, at any time after beginning the hearing of the appeal, adjourn the hearing; and in every such situation, the Tribunal shall fix another convenient day for further hearing.
32. Rule 27 of the Tax Appeals Tribunal (Procedure) Rules provides that the Tribunal may determine an appropriate procedure where there are no applicable procedures under the Rules or the Act.
33. The hearing before the Tribunal took the form of parties being directed to present viva voce evidence. They were directed to file witness statements first. The appellant (Ur Homes) did not comply with the Tribunal’s directions to file witness statements. The respondent filed its witness statements as indicated above.
34. In the case of Independent Electoral & Boundaries Commission -v- Jane Cheperenger & 2 others SC Petition No.5 of 2016 [2018] eKLR the Supreme Court underscored the importance of complying with Court orders and given directions, pointing out that every party has an obligation to honour the Court’s directions. The Supreme Court went ahead to state that whereas late filing of submissions was not patently incurable, and the Court had discretion to allow such late filing, the appellant had not moved the Court appropriately by way of an application for extension of time to file the said documents. The Supreme Court all the same, allowed the admission of the submissions that had been filed late, pointing out that the consideration to bear in mind is what prejudice had been suffered by the respondent due to the applicant’s failure to timeously file its submissions and whether the respondent could be facilitated to mitigate such prejudice as may have been suffered.
35. Applying similar reasoning to the present case, this court asks itself whether it was appropriate for the Tribunal to proceed with the respondent’s appeal where the respondent had shown that it was not interested in prosecuting it. It is important to note that the Tax Appeals Tribunal Act and the Rules made thereunder provide for a hearing of the appeal. There is no provision therein to dispense with the hearing of either party to the appeal or to vary the procedure provided for under the Rules 20 as set out above.
36. In this case, the appellant did not even attempt to offer any explanation of why it had not complied with the Tribunal’s directions on the hearing. The respondent (Ur Homes) herein as the appellant in that appeal did not attend the hearing altogether. What the respondent did before the Tribunal amounted to non-appearance at the hearing to prosecute the appeal. I can find no other explanation for that conduct other than that the respondent had abandoned the prosecution of its appeal before the Tax Appeals Tribunal.
37. In the case of Stephen Muthamia Marete & 2 others v Mary Naitore Kinyua (enjoined as the legal representative of the Estate of Patrick Kinyua Iringo) [2018] eKLR, faced with a similar situation where an appellant failed to file submissions in support of an appeal, the High Court observed and held as follows:
“In my view, when an Appellant has been ordered to file written submissions and he fails to do so as the Appellants have done in this case, the court should find, as it does in this case, that the appellant has failed to prosecute his appeal, or is no longer interested in pursuing it.”
38. The court went on to dismiss the appeal for want of prosecution. I am persuaded to follow this position even as it arises from the application of the Civil Procedure Act and the Rules made thereunder which do not have direct application to Tax appeals. Just like the Civil Procedure Act and the Rules, the Tax Appeals Tribunal Act and the Rules made thereunder for appeals to the Tax Appeals Tribunal provide for a hearing of the appeal. The appellant is required to prosecute its appeal followed by the respondent.
39. The question this court asks itself is what prejudice was occasioned to the appellant herein when the respondent failed to prosecute its appeal and yet the appellant was directed and did present its appeal?
40. The first and obvious one is that the failure to file witness statements and submissions caused the hearing at the Tribunal to be adjourned twice. This caused delay in the hearing and determination of the appeal.
41. Secondly, in asking the parties to file witness statements, it meant, and indeed it is the case that this was the trial of the case. The Tribunal took the position, which I find to be correct, that the statements of facts filed by the parties amounted to the pleadings. In that case, I need not restate the fact that pleadings are not evidence. This has been stated on many occasions. In the case of CMC Aviation Ltd v Kenya Airways Ltd (Cruisair Ltd ) [1978] KECA 9 (KLR), Madan, JA (as he then was) explained the position as follows:
“The pleadings contain the averments of the three parties concerned. Until they are proved, or disproved, or there is admission of them or any of them by the parties, they are not evidence and no decision could be founded upon them. Proof is the foundation of evidence. As stated in the definition of “evidence” in section 3 of the Evidence Act, evidence denotes the means by which an alleged matter of fact, the truth of which is submitted to investigation, is proved or disproved. Averments are matters the truth of which is submitted for investigation. Until their truth has been established or otherwise they remain unproven. Averments in no way satisfy, for example, the following definition of “evidence” in Cassell’s English Dictionary, p 394:
Anything that makes clear or obvious; ground for knowledge, indication or testimony; that which makes truth evident, or renders evident to the mind that it is truth.
The pleadings in a suit are not normally evidence. They may become evidence if they are expressly or impliedly admitted as then the admission itself is evidence. Evidence is usually given on oath. Averments are not made on oath. Averments depend upon evidence for proof of their contents.”
42. In the appeal before the Tribunal, there was no admission of any of the facts alleged by the appellant therein (Ur Homes) against the respondent (the Commissioner). Therefore, in the absence of evidence tendered to prove them as had been directed by the Tribunal, the averments remained mere allegations.
43. Thirdly, it is apparent that it was not clear which of the appellant’s decisions was being appealed due to the mix-up of the averments in the memorandum of appeal filed by the appellant (Ur Homes) as pointed out above. This led to the respondent (the Commissioner) making submissions on all the three decisions it had made against the respondent only for the Tribunal to state in its decision that it was considering only one.
44. Fourth, the respondent could not understand the reasoning behind the appellant’s challenge to its decision. In the circumstances, its case against the appellant on the appeal was based on conjecture given that it had already offered the respondent reasons for its decision.
Determination
45. I am satisfied and do find that the respondent in this appeal, which was the appellant before the Tribunal, failed to prosecute its appeal before the Tribunal. Consequently, the same should have been dismissed by the Tribunal for want of prosecution.
46. The respondent has equally failed to participate in the present appeal despite being duly served and notified to do so. That is conduct that should not be countenanced.
47. For the foregoing reasons, I am satisfied that the appeal herein has merit and the same is allowed. The decision of the Tax Appeals Tribunal to consider and allow the respondent’s appeal is hereby set aside and substituted with a decision dismissing the respondent’s appeal before the Tribunal with costs to the appellant herein.
48. It is hereby so ordered.
Dated, Signed and Delivered on the virtual platform Teams this 29th day of August 2025.
ANDAYI W. F.
JUDGE
In the presence of:
Mulinge (Ms) holding brief for Isutsa for the appellant.
N/A for the Respondent.
Carlos: Court Assistant.
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