'(Being an Appeal from the Judgment of the Tax Appeals Tribunal at Nairobi delivered on 22nd March 2024 in Tax Appeals Tribunal Appeal No. E104 of 2023)
1. On 22nd March 2024 the Tax Appeals Tribunal (TAT) determined an appeal by the respondent herein, Hamwe Logistics Suppliers Ltd holding that the appellant’s (Commissioner of Income Tax)(Commissioner) objection decision dated 29th August 2022 was statutorily time barred and the respondent’s notice of objection was thus deemed allowed by operation of law.
2. The appellant herein filed the present appeal challenging that decision through the memorandum of appeal dated 21st May 2024. The record of appeal is also dated 21st May 2024.
3. The grounds of appeal are that:
a. The Tax Appeals Tribunal erred in law and in fact in finding that the Appellant issued its objection decision outside the statutory timelines without considering when the Respondent lodged its objection.
b. The Honourable Tribunal erred in law and in fact in failing to appreciate that the Objection was lodged on 6th June 2022 prior to the enactment of Section 44 of the Finance Act 2022 thereby arriving at an erroneous decision.
c. The Honorable Tribunal erred in law and fact in making a decision without considering the merits of the case before it and only opted to rely on a procedural issue, which was based on miss-appreciation of the principles of tax law, particularly the provisions of Section 51 of the Tax Procedures Act.
4. The appellant therefore prays that the appeal be allowed, the judgment of the Tax Appeals Tribunal dated 22nd March 2024 be set aside and the appellant''s objection decision dated 29th August 2022 against the respondent, confirming additional VAT assessments for the period December 2017 and December 2018 amounting to KShs. 10,576,459.00 be upheld and costs be awarded to the appellant.
5. The respondent was served with the memorandum of appeal and record of appeal but did not respond. It has therefore not participated in the proceedings herein.
6. The appeal was disposed of on the written submissions of the appellant. I have considered them in the analysis that follows.
7. The Appellant submits that the appeal raises two main issues that:
a. The Tribunal erred fact and law by failing to objectively examine the parties’ pleadings and issues raised therein.
b. The Tribunal erred in its finding that the objection decision dated 29th August, 2022 was made beyond the statutory period prescribed in section 51 (11) of the Tax Procedures Act (Cap. 469B) Laws of Kenya and thus the taxpayer’s objection was deemed allowed by operation of the law.
8. I have considered the grounds of appeal, the judgment of the TAT and the submissions of the appellant herein.
9. The appellant submits that considering the parties’ pleadings filed before the TAT comprising of the respondent’s notice of appeal dated 19th April, 2024, memorandum of appeal lodged before the Tax Appeals Tribunal on 23rd May 2024, and statement of facts dated 12th July, 2023 and the appellant’s statement of facts dated 12th July, 2023 it is apparent that the Tribunal in its judgment delved into issues not raised by either party in its pleadings.
10. The Tribunal determined the appeal based on the first ground of appeal raised by the respondent which was that:
“the objection decision was issued 83 days after the appellant’s objection which in itself is out of the statutory timeline thus has no effect and does not in any way invalidate the Appellant’s objection.”
11. In determining the issue, the TAT made the following findings:
“The Appellant argued that the objection decision was issued eighty-three (83) days after the Appellant''s objection which in itself is out of the statutory timeline, therefore has no effect and does not in any way invalidate the Appellant''s objection. The Respondent did not dispute this allegation.
Therefore, the Tribunal seeks to establish whether the allegation is
true.
The Tribunal has examined the pleadings as filed and notes that the
Respondent issued assessment orders dated 12th February, 2021. The
Respondent conceded that the Appellant objected to the raised assessments on 6th June 2022. The Tribunal has examined the objection application acknowledgement receipt and confirms that the Respondent acknowledged receipt of the objection on 6th June 2022.
The assessment orders were issued on 12th February, 2021. Accordingly, Section 51 (11) of the TPA provided as follows:
"The Commissioner shall make the objection decision within sixty days from the date of receipt of-
(a) the notice of objection; or
(b) any further information the Commissioner may require from the taxpayer, failure to which the objection shall be deemed to be allowed."
Pursuant to Section 51 (11) of the TPA, the Respondent ought to have issued an objection decision on or before 6th August 2022. Instead, the Respondent issued the decision on 29th August 2022. As pointed out above, the Respondent did not challenge the allegation that the objection decision is statutory time barred.”
12. I have reproduced the respondent’s first ground of appeal before the Tribunal followed by the Tribunal’s finding thereon in view of the appellant’s contention herein that the Tribunal in its judgement delved into issues not raised by either party in its pleadings.
13. The respondent having pleaded that the objection decision by the appellant was issued outside the statutory timelines provided, I do not see how the Tribunal delved into an issue that was not raised. I am satisfied and do find that the Tribunal considered the first issue raised by the respondent regarding the timelines within which the objection decision ought to have been issued by the appellant as provided for under the law.
14. One of the issues that Tribunal pointed out was that the appellant had not disputed the allegation raised by the respondent that the objection decision had been issued outside the statutory timelines. The Tribunal then went ahead to set out the provisions of the law and the date the objection decision was issued.
15. The Tribunal found that that the appellant issued assessment orders dated 12th February, 2021 and conceded that the respondent objected to the raised assessments on 6th June 2022.
16. These finding is in line with the appellant’s submission herein that, “it is clear that the Respondent was issued with the additional assessments on 12th February 2021 and the Respondent objected to the assessments a year later on 6th June 2022 thus the Appellant issued the Respondent with an objection decision on 29th August 2022. Clearly, between 6th June 2022 and 29th August 2022 is a period of 83 days.
17. The appellant submits further that the respondent’s objection application dated 6th June 2022 was received prior to the enactment of Section 44 of the Finance Act 2022. Therefore, the Tribunal’s finding that the respondent’s objection decision was issued late by 83 days was an erroneous decision.
18. First, it was not the respondent’s contention and neither was it the Tribunal’s finding that the objection decision was issued late by 83 days. The contention by the respondent which the Tribunal agreed with was that the decision was issued 83 days after the respondent’s objection. Since section 51 (11) provides that the objection decision has to be issued within sixty (60) days from the date of receipt of the objection it follows that the objection decision being issued after 83 days was late by 23 days. The Tribunal then found that the appellant had not challenged the allegation that the objection decision is statutorily time barred.
19. It is interesting that the appellant having failed to challenge that issue before the Tribunal now seeks to challenge the Tribunal’s finding on the same. Had it done so, its arguments herein would have been considered by the Tribunal.
20. The appellant submits further on that issue that the respondent was unable to provide evidence to support its assertions. What other evidence was the respondent required to provide yet the date when it raised its objection with the appellant and the date when the appellant issued its objection decision were clearly there on record and the law on the same is there for all to see and apply?
21. The appellant submits further that the objection decision was issued within timelines as section 44 of the Finance Act 2022 had not come into place at the time the respondent made its objection to the assessments raised. This means that the objection decision was made under the 2021 edition of the Tax Procedures Act which provided under section 51(11) as follows:
51 (11) The Commissioner shall make the objection decision within sixty days from the date of receipt of—
(a) the notice of objection; or
(b) any further information the Commissioner may require from the taxpayer,
failure to which the objection shall be deemed to be allowed.
22. The amendment of section 51(11) by section 44 of the Finance Act 2022 repealed the above subsection and brought in the current provision which is as follows:
The Commissioner shall make the objection decision within sixty days from the date of receipt of a valid notice of objection failure to which the objection shall be deemed to be allowed.
23. It follows that even under the previous provisions of section 51(11) of the TPA the Commissioner was still required to make the objection decision within sixty days which was not the case herein (see the case of Equity Group Holdings Limited v Commissioner of Domestic Taxes [2021] KEHC 25 (KLR)).
24. The appellant submits further that it did not have an opportunity to substantively address the issue thus being condemned unheard. I have have stated above that the TAT dealt with the issue as raised by the respondent and that it is not correct as submitted by the appellant herein that the issue had not been raised by either of the parties. The Tribunal thus dealt with issues raised by the respondent in its pleadings and all the authorities cited by the appellant in support of that submission are not helpful to it.
25. The issue was not merely raised in the submissions of the appellant as was the case of Commissioner of Domestic Taxes v Ibangua Investments Co. Ltd [2023] KEHC 26013 (KLR) cited by the appellant where the court found that:
“Having gone through the Respondent’s pleadings, that is the Memorandum of Appeal and its statement of facts filed before the Tribunal, and as has been impliedly admitted by the Respondent, the issue of whether the Objection Decision was valid was never pleaded by Respondent. Whereas the Respondent states that the issue of the timeline of the Objection Decision was aired out in its submissions, submissions are not pleadings but the parties’ “marketing language” and that parties are bound by their pleadings (see Daniel Toroitich Arap Moi v Mwangi Stephen Muriithi & another NRB CA Civil Appeal No. 240 of 2011 [2014] eKLR and Independent Electoral and Boundaries Commission & another v Stephen Mutinda Mule & 3 others NRB CA Civil Appeal No.219 of 2013 [2014] eKLR).”
26. The above case is therefore not applicable to the present circumstances.
27. In a belated move, the appellant raises the ground that the TAT failed to consider when the respondent lodged its objection. The appellant submits that the respondent was issued with the additional assessments on 12th February 2021 and the respondent objected to the assessments a year later on 6th June 2022 and the appellant issued the respondent with an objection decision on 29th August 2022.
28. Indeed, the respondent ought to have raised its objection to the assessment within 30 days of being notified of the decision of assessment by the appellant. In raising its objection a year later, as pointed out by the appellant, it was outside the timelines provided for by law. In spite of the objection being raised that late, the appellant did not reject it on account of being late and there is no indication that it raised the issue with the respondent at all. Instead, it went ahead to consider the objection and issue its objection decision, the subject of the appeal before the TAT. In doing so, the respondent was entitled to presume and I equally do so here that the appellant had waived its right to reject the objection on grounds of being time barred. Such waiver could be considered for instance as having been made under section 51 sub-sections (6) and (7) of the TPA. The appellant is therefore, estopped from complaining that after all the respondent had lodged its objection outside the time provided for under the law. Under section 120 of the Law of Evidence Act (Cap. 80) Laws of Kenya, the appellant’s conduct in accepting and considering the respondent’s objection, in spite of being filed outside the time provided by law, prevents it from seeking to enforce it at this time. The appellant’s conduct led the respondent to believe that it will not be relying upon the statutorily set time limit anymore to challenge its filing of the objection.
29. Moreover, in so submitting, the appellant falls captive to its own submission that parties are bound by their pleadings since it did not plead that issue before the TAT and so it cannot argue it before this court.
30. The appellant further submits that the objection lodged on 6th June, 2022 by the respondent did not meet the threshold under Section 51(3) of the TPA as the respondent did not provide all the documents in support of the objection. Indeed, section 51(3)(c) of the TPA provides that all the relevant documents relating to the objection have to be submitted by a taxpayer for a notice of objection to be deemed as validly lodged. The TAT did not find it necessary to consider that issue in view of its determination of the appeal on the issue of the appellant’s appeal having been filed out of time. Having found that the TAT was correct in its decision and this being an issue of fact, this court cannot delve into it.
31. Consequently, I find that the decision of the Tribunal herein was sound and the same is affirmed. The appeal herein is dismissed with no orders as to costs as the respondent never participated.
32. It is hereby so ordered.
Dated, Signed and Delivered on the virtual platform Teams this 4th day of September 2025.
ANDAYI W. F.
JUDGE
In the presence of:
N/A for the appellant.
N/A for the respondent.
Carlos: Court Assistant.
'
1. On 22nd March 2024 the Tax Appeals Tribunal (TAT) determined an appeal by the respondent herein, Hamwe Logistics Suppliers Ltd holding that the appellant’s (Commissioner of Income Tax)(Commissioner) objection decision dated 29th August 2022 was statutorily time barred and the respondent’s notice of objection was thus deemed allowed by operation of law.
2. The appellant herein filed the present appeal challenging that decision through the memorandum of appeal dated 21st May 2024. The record of appeal is also dated 21st May 2024.
3. The grounds of appeal are that:
a. The Tax Appeals Tribunal erred in law and in fact in finding that the Appellant issued its objection decision outside the statutory timelines without considering when the Respondent lodged its objection.
b. The Honourable Tribunal erred in law and in fact in failing to appreciate that the Objection was lodged on 6th June 2022 prior to the enactment of Section 44 of the Finance Act 2022 thereby arriving at an erroneous decision.
c. The Honorable Tribunal erred in law and fact in making a decision without considering the merits of the case before it and only opted to rely on a procedural issue, which was based on miss-appreciation of the principles of tax law, particularly the provisions of Section 51 of the Tax Procedures Act.
4. The appellant therefore prays that the appeal be allowed, the judgment of the Tax Appeals Tribunal dated 22nd March 2024 be set aside and the appellant''s objection decision dated 29th August 2022 against the respondent, confirming additional VAT assessments for the period December 2017 and December 2018 amounting to KShs. 10,576,459.00 be upheld and costs be awarded to the appellant.
5. The respondent was served with the memorandum of appeal and record of appeal but did not respond. It has therefore not participated in the proceedings herein.
6. The appeal was disposed of on the written submissions of the appellant. I have considered them in the analysis that follows.
7. The Appellant submits that the appeal raises two main issues that:
a. The Tribunal erred fact and law by failing to objectively examine the parties’ pleadings and issues raised therein.
b. The Tribunal erred in its finding that the objection decision dated 29th August, 2022 was made beyond the statutory period prescribed in section 51 (11) of the Tax Procedures Act (Cap. 469B) Laws of Kenya and thus the taxpayer’s objection was deemed allowed by operation of the law.
8. I have considered the grounds of appeal, the judgment of the TAT and the submissions of the appellant herein.
9. The appellant submits that considering the parties’ pleadings filed before the TAT comprising of the respondent’s notice of appeal dated 19th April, 2024, memorandum of appeal lodged before the Tax Appeals Tribunal on 23rd May 2024, and statement of facts dated 12th July, 2023 and the appellant’s statement of facts dated 12th July, 2023 it is apparent that the Tribunal in its judgment delved into issues not raised by either party in its pleadings.
10. The Tribunal determined the appeal based on the first ground of appeal raised by the respondent which was that:
“the objection decision was issued 83 days after the appellant’s objection which in itself is out of the statutory timeline thus has no effect and does not in any way invalidate the Appellant’s objection.”
11. In determining the issue, the TAT made the following findings:
“The Appellant argued that the objection decision was issued eighty-three (83) days after the Appellant''s objection which in itself is out of the statutory timeline, therefore has no effect and does not in any way invalidate the Appellant''s objection. The Respondent did not dispute this allegation.
Therefore, the Tribunal seeks to establish whether the allegation is
true.
The Tribunal has examined the pleadings as filed and notes that the
Respondent issued assessment orders dated 12th February, 2021. The
Respondent conceded that the Appellant objected to the raised assessments on 6th June 2022. The Tribunal has examined the objection application acknowledgement receipt and confirms that the Respondent acknowledged receipt of the objection on 6th June 2022.
The assessment orders were issued on 12th February, 2021. Accordingly, Section 51 (11) of the TPA provided as follows:
"The Commissioner shall make the objection decision within sixty days from the date of receipt of-
(a) the notice of objection; or
(b) any further information the Commissioner may require from the taxpayer, failure to which the objection shall be deemed to be allowed."
Pursuant to Section 51 (11) of the TPA, the Respondent ought to have issued an objection decision on or before 6th August 2022. Instead, the Respondent issued the decision on 29th August 2022. As pointed out above, the Respondent did not challenge the allegation that the objection decision is statutory time barred.”
12. I have reproduced the respondent’s first ground of appeal before the Tribunal followed by the Tribunal’s finding thereon in view of the appellant’s contention herein that the Tribunal in its judgement delved into issues not raised by either party in its pleadings.
13. The respondent having pleaded that the objection decision by the appellant was issued outside the statutory timelines provided, I do not see how the Tribunal delved into an issue that was not raised. I am satisfied and do find that the Tribunal considered the first issue raised by the respondent regarding the timelines within which the objection decision ought to have been issued by the appellant as provided for under the law.
14. One of the issues that Tribunal pointed out was that the appellant had not disputed the allegation raised by the respondent that the objection decision had been issued outside the statutory timelines. The Tribunal then went ahead to set out the provisions of the law and the date the objection decision was issued.
15. The Tribunal found that that the appellant issued assessment orders dated 12th February, 2021 and conceded that the respondent objected to the raised assessments on 6th June 2022.
16. These finding is in line with the appellant’s submission herein that, “it is clear that the Respondent was issued with the additional assessments on 12th February 2021 and the Respondent objected to the assessments a year later on 6th June 2022 thus the Appellant issued the Respondent with an objection decision on 29th August 2022. Clearly, between 6th June 2022 and 29th August 2022 is a period of 83 days.
17. The appellant submits further that the respondent’s objection application dated 6th June 2022 was received prior to the enactment of Section 44 of the Finance Act 2022. Therefore, the Tribunal’s finding that the respondent’s objection decision was issued late by 83 days was an erroneous decision.
18. First, it was not the respondent’s contention and neither was it the Tribunal’s finding that the objection decision was issued late by 83 days. The contention by the respondent which the Tribunal agreed with was that the decision was issued 83 days after the respondent’s objection. Since section 51 (11) provides that the objection decision has to be issued within sixty (60) days from the date of receipt of the objection it follows that the objection decision being issued after 83 days was late by 23 days. The Tribunal then found that the appellant had not challenged the allegation that the objection decision is statutorily time barred.
19. It is interesting that the appellant having failed to challenge that issue before the Tribunal now seeks to challenge the Tribunal’s finding on the same. Had it done so, its arguments herein would have been considered by the Tribunal.
20. The appellant submits further on that issue that the respondent was unable to provide evidence to support its assertions. What other evidence was the respondent required to provide yet the date when it raised its objection with the appellant and the date when the appellant issued its objection decision were clearly there on record and the law on the same is there for all to see and apply?
21. The appellant submits further that the objection decision was issued within timelines as section 44 of the Finance Act 2022 had not come into place at the time the respondent made its objection to the assessments raised. This means that the objection decision was made under the 2021 edition of the Tax Procedures Act which provided under section 51(11) as follows:
51 (11) The Commissioner shall make the objection decision within sixty days from the date of receipt of—
(a) the notice of objection; or
(b) any further information the Commissioner may require from the taxpayer,
failure to which the objection shall be deemed to be allowed.
22. The amendment of section 51(11) by section 44 of the Finance Act 2022 repealed the above subsection and brought in the current provision which is as follows:
The Commissioner shall make the objection decision within sixty days from the date of receipt of a valid notice of objection failure to which the objection shall be deemed to be allowed.
23. It follows that even under the previous provisions of section 51(11) of the TPA the Commissioner was still required to make the objection decision within sixty days which was not the case herein (see the case of Equity Group Holdings Limited v Commissioner of Domestic Taxes [2021] KEHC 25 (KLR)).
24. The appellant submits further that it did not have an opportunity to substantively address the issue thus being condemned unheard. I have have stated above that the TAT dealt with the issue as raised by the respondent and that it is not correct as submitted by the appellant herein that the issue had not been raised by either of the parties. The Tribunal thus dealt with issues raised by the respondent in its pleadings and all the authorities cited by the appellant in support of that submission are not helpful to it.
25. The issue was not merely raised in the submissions of the appellant as was the case of Commissioner of Domestic Taxes v Ibangua Investments Co. Ltd [2023] KEHC 26013 (KLR) cited by the appellant where the court found that:
“Having gone through the Respondent’s pleadings, that is the Memorandum of Appeal and its statement of facts filed before the Tribunal, and as has been impliedly admitted by the Respondent, the issue of whether the Objection Decision was valid was never pleaded by Respondent. Whereas the Respondent states that the issue of the timeline of the Objection Decision was aired out in its submissions, submissions are not pleadings but the parties’ “marketing language” and that parties are bound by their pleadings (see Daniel Toroitich Arap Moi v Mwangi Stephen Muriithi & another NRB CA Civil Appeal No. 240 of 2011 [2014] eKLR and Independent Electoral and Boundaries Commission & another v Stephen Mutinda Mule & 3 others NRB CA Civil Appeal No.219 of 2013 [2014] eKLR).”
26. The above case is therefore not applicable to the present circumstances.
27. In a belated move, the appellant raises the ground that the TAT failed to consider when the respondent lodged its objection. The appellant submits that the respondent was issued with the additional assessments on 12th February 2021 and the respondent objected to the assessments a year later on 6th June 2022 and the appellant issued the respondent with an objection decision on 29th August 2022.
28. Indeed, the respondent ought to have raised its objection to the assessment within 30 days of being notified of the decision of assessment by the appellant. In raising its objection a year later, as pointed out by the appellant, it was outside the timelines provided for by law. In spite of the objection being raised that late, the appellant did not reject it on account of being late and there is no indication that it raised the issue with the respondent at all. Instead, it went ahead to consider the objection and issue its objection decision, the subject of the appeal before the TAT. In doing so, the respondent was entitled to presume and I equally do so here that the appellant had waived its right to reject the objection on grounds of being time barred. Such waiver could be considered for instance as having been made under section 51 sub-sections (6) and (7) of the TPA. The appellant is therefore, estopped from complaining that after all the respondent had lodged its objection outside the time provided for under the law. Under section 120 of the Law of Evidence Act (Cap. 80) Laws of Kenya, the appellant’s conduct in accepting and considering the respondent’s objection, in spite of being filed outside the time provided by law, prevents it from seeking to enforce it at this time. The appellant’s conduct led the respondent to believe that it will not be relying upon the statutorily set time limit anymore to challenge its filing of the objection.
29. Moreover, in so submitting, the appellant falls captive to its own submission that parties are bound by their pleadings since it did not plead that issue before the TAT and so it cannot argue it before this court.
30. The appellant further submits that the objection lodged on 6th June, 2022 by the respondent did not meet the threshold under Section 51(3) of the TPA as the respondent did not provide all the documents in support of the objection. Indeed, section 51(3)(c) of the TPA provides that all the relevant documents relating to the objection have to be submitted by a taxpayer for a notice of objection to be deemed as validly lodged. The TAT did not find it necessary to consider that issue in view of its determination of the appeal on the issue of the appellant’s appeal having been filed out of time. Having found that the TAT was correct in its decision and this being an issue of fact, this court cannot delve into it.
31. Consequently, I find that the decision of the Tribunal herein was sound and the same is affirmed. The appeal herein is dismissed with no orders as to costs as the respondent never participated.
32. It is hereby so ordered.
Dated, Signed and Delivered on the virtual platform Teams this 4th day of September 2025.
ANDAYI W. F.
JUDGE
In the presence of:
N/A for the appellant.
N/A for the respondent.
Carlos: Court Assistant.
'