'1. The Application that comes up for ruling is dated 31 October 2025 wherein the Exparte Applicant seeks the following orders;
1) …Spent.
2) The Applicant, Fones Direct Limited, be granted leave to apply for:
a) An Order of Certiorari to remove to this Honourable Court to be quashed the administrative action and or Notice of the 1st, 2nd and 3rdRespondents of adding the Applicant’s Personal Identification Numbers (PIN) No. P051150583U to the VAT special table.
b) An Order of Prohibition prohibiting the 1st, 2nd and 3rdRespondents whether by themselves, agents, servants or howsoever otherwise, from suspending, cancelling, deactivating, deregistering, imposing PIN dormancy and or PIN restriction to the Applicant’s Personal Identification Numbers (PIN) No. P051150583U.
c) An Order of Mandamus compelling the 1st, 2nd and 3rdRespondents whether by themselves, agents, servants or howsoever otherwise acting pursuant to its authority or under any of them, to activate the Applicant’s Personal Identification Numbers (PIN) No. P051150583U so as to enable the Applicant to file their VAT returns & account for their ongoing taxable transactions under their self-assessment tax obligations
d) An Order of Prohibition prohibiting the 1st, 2nd and 3rdRespondents whether by themselves, agents, servants or howsoever otherwise, from threatening, intimidating or in any way harassing, acting in enforcement and/or implementation of the demand notices served upon the Applicant herein pursuant to the Demand Notices.
3) The leave does operate to stay any enforcement of the demands and/or notices pending the hearing and determination of the substantive Application for Judicial Review.
4) The costs of this Application be in favour of the Applicant.
2. The Applicant, Fones Direct Limited, contends that the Respondents being the Kenya Revenue Authority, the Commissioner for Investigations and Enforcement, and the Commissioner for the Large & Medium Taxpayers Department have exercised their statutory mandate in an unlawful, irrational, and procedurally improper manner, thereby violating both the Applicant’s Constitutional and Statutory Rights.
3. The Applicant avers that despite fully complying with an investigative request issued on 12thSeptember 2025 regarding purportedly fraudulent invoices allegedly generated by Viostruct Global Ltd, and having furnished all supporting documentation as required under Section 17 of the Value Added Tax Act, the Respondents unilaterally escalated the matter without rendering any findings, feedback, or adverse inference grounded in evidence.
4. The Applicant states that after attending a meeting convened on 18 September 2025 and resubmitting documents on 19th September 2025, it was abruptly informed on 29th September 2025 that its PIN had been placed in the “VAT Special Table” a measure which the Applicant asserts has no basis in law, is not recognized by the Value Added Tax Act or subsidiary legislation, and whose effect is to suspend its ability to file VAT returns or claim input VAT, thereby paralyzing its business operations.
5. The Applicant asserts that the said administrative action was taken without notice, reasons, or an opportunity to be heard, contrary to Article 47 of the Constitution and Sections 4(3) and 6 of the Fair Administrative Action Act.
6. It further contends that the subsequent demand of Kshs. 1,152,620 issued on 1st October 2025, coupled with the threat of criminal prosecution, was not only unfounded given that the VAT in question had already been remitted, but also amounted to double jeopardy. The Applicant maintains that the Respondents’ conduct particularly issuing parallel inquiries from different KRA departments, enlarging the scope of investigations without justification, and demanding Kshs. 33,486,663 through yet another unilateral letter dated 28 October 2025 illustrates an abuse of power, arbitrariness, and bad faith, thereby offending the rules of natural justice as articulated in such authorities as Pastoli v Kabale District Local Government Council & Others and Republic v Kenya Revenue Authority Exparte Sweety Enterprises Limited.
7. The Applicant further asserts that the Respondents acted ultra vires by purporting to suspend its PIN a power not anchored in tax legislation and equates such an action to the unconstitutional withholding of a national identity document, given its effect of depriving the Applicant of the ability to transact or comply with tax obligations.
8. According to the Applicant, the Respondents’ failure to provide a findings report, to consider the evidence furnished, or to address the legality of the so-called VAT Special Table, violated its legitimate expectation that the investigative process would be conducted fairly, transparently, and within the confines of the law. The Applicant additionally highlights a pattern of harassment, noting that similar allegations had been raised earlier in TAT No. E487 of 2025, which was settled through Alternative Dispute Resolution on 25th July 2025, as well as prior assessments in May 2024—demonstrating repetitive and unjustified targeting by the Respondents. It argues that the cumulative effect of these actions has inflicted severe commercial prejudice, including loss of clientele, damage to reputation, and disruption of its ability to generate or claim VAT through the eTIMS platform, thereby threatening the very viability of its business.
9. In the circumstances, the Applicant contends that the Respondents’ decisions were illegal, irrational, unprocedural, and violative of Articles 23(3) (f), 47, and 50 of the Constitution; that the Respondents failed to discharge their evidentiary burden once the Applicant provided all documentation required under the VAT Act and that the impugned administrative actions are nullities in law.
10. The Applicant therefore seeks leave to commence Judicial Review proceedings to challenge and quash the impugned decisions, to compel adherence to constitutional and statutory safeguards, and to protect its rights against continued unlawful administrative action.
11. The Application was canvassed by way of written submissions dated 12th November, 2025 and Supplementary submissions dated 14th November, 2025.
12. In its submissions, the Applicant urges the Court to find that it has satisfied the legal threshold for the grant of leave to commence judicial review proceedings against the Respondents’ decision to place it under the so-called VAT Special Table a measure the Applicant characterizes as ultra vires, irrational, illegal, and procedurally improper.
13. The Applicant underscores that the Respondents have expressly admitted, through the Replying Affidavit sworn on 7th November 2025, that the VAT Special Table is merely an “administrative measure,” yet no provision of the VAT Act, the Tax Procedures Act, or any written law authorizes its creation or its deployment as a punitive mechanism against taxpayers. The Applicant submits that this admission alone demonstrates that the impugned action is devoid of legal foundation and therefore susceptible to judicial review.
14. On ultra vires, the Applicant invokes Section 7(2) (a) of the Fair Administrative Actions Act, arguing that the Respondents acted without lawful authority and in excess of their statutory mandate by unilaterally subjecting the Applicant to a non-existent administrative regime without notice or a hearing. While acknowledging that the Kenya Revenue Authority is empowered to investigate and assess taxes, the Applicant maintains that such powers must be exercised within the four corners of the law. The unilateral imposition of punitive consequences, including the suspension of the Applicant’s ability to file VAT returns, is said to constitute an impermissible extension of jurisdiction.
15. In support, the Applicant relies on Fleur Investments Limited v Commissioner of Domestic Taxes & another [2018] KECA 341 (KLR), where the Court of Appeal held that although the tax authority may collect lawfully owed taxes, “imposing taxes where none is owed and arbitrarily imposing sanctions to enforce payment is acting in excess of its jurisdiction and is ultra vires and thus amenable to judicial review.” The Applicant further contends that permitting multiple departments of the Respondent to concurrently mete out separate sanctions amounted to an abuse of power and exposed it to double jeopardy.
16. On irrationality, the Applicant submits that the Respondents’ conduct offends the Eynesbury standard, in that despite full compliance with Section 17 of the VAT Act including provision of all requested documentation and participation in meetings—the Respondents failed to consider this material and instead imposed sanctions without justification. The Applicant stresses that the correct subject of investigation was the supplier, Viostruct Global Ltd, yet the Respondents punished the Applicant without any rational explanation.
17. In the absence of such explanation, the Applicant contends that the impugned action is inherently unreasonable within the meaning adopted in Republic v Institute of Certified Public Accountants of Kenya Ex Parte Joy Vipinchandra Bhatt t/a JV Bhatt & Company (2008) KEHC 3231 (KLR).
18. On illegality, the Applicant reiterates that the VAT Special Table has no statutory basis and that the Respondents have been unable to identify any provision creating or regulating it. The Respondents’ attempt to rely on general provisions of the VAT Act is described as a deliberate attempt to “send this Honourable Court on a wild goose chase,” given that those statutory provisions do not speak to the existence or legality of the impugned measure. The Applicant emphasizes that an administrative action founded on no law is per se illegal and ought to be quashed.
19. Regarding procedural impropriety, the Applicant submits that the Respondents’ contention that the Applicant ought to have invoked Section 51(1) of the Tax Procedures Act is misplaced, as the impugned action was not a lawful “tax decision” but an illegal administrative sanction unsupported by any statutory authority.
20. The Applicant notes the troubling chronology: it was placed on the VAT Special Table on 29th September 2025; was then issued with a demand on 1st October 2025; and a second demand on 28th October 2025 demonstrating that the punitive decision preceded any investigative findings or assessment.
21. The Applicant argues that it is a cardinal rule of due process that fact-finding cannot occur ex post facto, after punishment has already been imposed, and that the Respondents’ actions therefore amount to procedural impropriety of the most fundamental nature.
22. The Applicant further maintains that these issues fall outside the jurisdiction of the Tax Appeals Tribunal, making judicial review the appropriate recourse.
23. In response to the Respondents’ submissions dated 13th November 2025, the Applicant refutes the claim that it was placed on the VAT Special Table after issuance of an assessment, affirming that the placement occurred on 29thSeptember 2025, a month earlier. It submits that the Respondents’ shifting narrative, including reliance on irrelevant statutory provisions, reveals dishonesty and an entrenched disregard for procedural safeguards.
24. Having admitted that the VAT Special Table is an internal administrative measure, the Respondents, the Applicant argues, cannot simultaneously seek to legitimize it by invoking unrelated provisions of the VAT Act.
25. It is the Applicant’s submission that the impugned actions constitute serious illegality, irrationality, and procedural impropriety, all warranting the Court’s intervention. It therefore prays that leave be granted, that such leave operates as a stay of all enforcement measures, and that the Court protects it from the continuing harm caused by the unlawful suspension of its PIN an action likened to the suspension of an identity card and described as preposterous and unsupported by any law. Costs are also sought against the Respondents.
The Respondents’ Case;
26. In opposition to the Applicant’s Chamber Summons for leave, the Respondents contend that the Application is misconceived, premature, and improperly before the Court.
27. Through the Replying Affidavit sworn by Victor Orege on 7th November 2025, the Respondents emphasize that the Kenya Revenue Authority is a statutory body established under the Kenya Revenue Authority Act (Cap. 469), mandated under Section 5(2) (a) (i) and Article 210(1) of the Constitution to administer and enforce tax laws, including the Income Tax Act, the Value Added Tax Act, and the Excise Duty Act.
28. In execution of this mandate, the Respondents assert that the Applicant was subjected to investigations concerning VAT compliance, culminating in an assessment issued on 28 October 2025.
29. It is the Respondents’ position that arising from the nature of the investigations, the Applicant was placed under the VAT Special Table by a notification letter dated 29th September 2025 an administrative compliance mechanism designed to ensure adherence to the VAT Act.
30. The Respondents further maintain that any grievance relating to either the assessment or the Applicant’s placement under the VAT Special Table should be addressed through the statutory dispute-resolution mechanisms prescribed under Section 51(1) of the Tax Procedures Act.
31. They argue that the Applicant, having been issued with a tax assessment, is obligated to lodge a notice of objection with the Commissioner and pursue the internal processes provided therein, including the consideration of the objection and determination of its compliance status.
32. They rely on the authority of Speaker of National Assembly vs Njenga Karume [2008] 1 KLR 425, in which the Court of Appeal held that where statute provides a specific procedure or remedy, that procedure must be strictly adhered to and courts should decline to entertain proceedings brought contrary to the prescribed statutory path. On this basis, the Respondents assert that judicial review is unavailable at this stage, and that this Court lacks jurisdiction to entertain the Application.
33. The Respondents also reiterate that placement under the VAT Special Table is not punitive but an administrative enforcement measure fully within their statutory powers. They assert that the Applicant’s complaints of illegality, procedural impropriety, or ultra vires conduct are unfounded, as the Respondents acted within their lawful mandate to safeguard Government revenue.
34. They maintain that the Applicant has failed to exhaust the statutory remedies explicitly provided under the Tax Procedures Act and that judicial review cannot be invoked as a substitute for the objection and appeal mechanisms established by Parliament.
35. In their submissions, the Respondents maintain that the Applicant’s Application is premature and offends the Doctrine of Exhaustion as codified in Section 9 of the Fair Administrative Action Act. They emphasize that Section 9(2)–(4) requires litigants to pursue and exhaust all internal review and appeal mechanisms before invoking the Court’s supervisory jurisdiction, unless exceptional circumstances are demonstrated—none of which, they argue, have been shown by the Applicant. On this basis alone, the Respondents contend that the present Application is an impermissible “assault to section 9 of the FAA,” rendering leave unavailable.
36. The Respondents justify the placement of the Applicant in the VAT Special Table as a lawful administrative compliance mechanism targeting taxpayers who fail to file VAT returns under Section 44 of the VAT Act, file repeated nil returns in circumstances suggestive of under-declared output tax, engage in VAT fraud, utilize fictitious invoices, or present high or irregular VAT claims lacking documentation.
37. They submit that this administrative mechanism is buttressed by various provisions of the VAT Act, including Sections 5(3), 17(2), 19, 42, and 44.
38. The Respondents further assert that although investigations had been ongoing, the Applicant’s tax position crystallized only upon issuance of a tax assessment on 28th October 2025. They insist that the placement in the VAT Special Table on 29th October 2025 was a logical and direct consequence of that assessment, itself arising from the Applicant’s non-compliance with the aforementioned statutory provisions.
39. Invoking section 51(1) and (2) of the Tax Procedures Act, the Respondents argue that an assessment is a “tax decision” within the meaning of Section 2 of the Act, and that a taxpayer disputing such a decision must first lodge a notice of objection before pursuing any other remedy.
40. They contend that the Applicant’s removal from the VAT Special Table is wholly dependent on its compliance with this statutory objection procedure: if the objection succeeds and the assessment is vacated, the basis for the Applicant’s continued placement automatically falls away. The Respondents therefore assert that a complete, effective, and adequate remedy exists within the statutory framework, rendering judicial review inappropriate at this stage.
41. To reinforce the Exhaustion Doctrine, the Respondents rely on Speaker of National Assembly vs Karume (1992) KLR 21 and on the reasoning adopted in Republic v Nairobi City Water and Sewerage Company Limited; Ex parte Osman Batur Dedeoglu (Judicial Review Application No. Misc. E011 of 2020), which in turn referenced Geoffrey Muthinja Kabiru & 2 Others vs Samuel Munga Henry & 1756 others (2015) eKLR.
42. These authorities affirm that where Parliament has provided a specific dispute-resolution mechanism, litigants must pursue that mechanism before invoking the jurisdiction of the courts, which are to be “fora of last resort and not the first port of call.” The Respondents urge the Court to consider paragraphs 26–30 of the Osman Batur Dedeoglu decision, which underscore the mandatory nature of Section 9 of the Fair Administrative Action Act and the necessity of postponing judicial intervention until statutory remedies are exhausted.
43. The Respondents submit that the Applicant has not explained why it failed to invoke the legally prescribed objection process under the Tax Procedures Act, despite acknowledging that the Respondents’ actions may ultimately be amenable to Judicial Review.
44. They argue that the Applicant’s disregard of available statutory avenues mirrors the circumstances in Judicial Review Application No. Misc. E011 of 2020, where the Court declined jurisdiction for failure to exhaust administrative remedies.
45. The Respondents assert that the Applicant’s grievances are fully addressable under the objection mechanism provided in Section 51 of the Tax Procedures Act and that no exceptional circumstances justify departure from the doctrine of exhaustion.
46. The Respondents urge the Court to dismiss the Application for leave, contending that the dispute is one that falls squarely within the jurisdiction of the Commissioner under Section 51(1) of the Tax Procedures Act, and that the Applicant’s attempt to bypass the statutory tax-resolution framework is contrary to law. They therefore pray that the Applicant’s motion dated 31 October 2025 be dismissed with costs.
Analysis and Determination;
The issues for determination are:
1) Whether or not the Application has merit.
2) Who shall be the costs?
Whether or not the Application has merit.
47. The High Court in exercise of the powers donated to it under Order 53 of the Civil Procedure Rules has the jurisdiction to issue prerogative orders.
48. The process is initiated by first filling an application for leave to file the judicial review proceedings.
49. Under Article 165 of the Constitution the high Court in exercise of its supervisory power over administrative bodies like the Respondents can intervene where an illegal, unlawful or procedurally ailing decision has been made.
50. During the leave stage the Court ought not to delve deeply into the arguments of the parties. The court should make a cursory perusal of the evidence before it in deciding whether an Applicant’s case is sufficiently meritorious to justify the grant of leave to advance to the next stage.
51. In Uwe Meixner & another v Attorney General [2005] eKLR, it was held that the leave of court is a prerequisite to making a substantive Application for Judicial Review with a view to filtering out frivolous Applications and the grant or refusal involves an exercise of judicial discretion and the test to be applied is whether the Applicant has an arguable case. Thus, the first step in the Judicial Review procedure involves the mandatory "leave stage." At this stage an Application for leave to bring Judicial Review proceedings must first be made. The leave stage as held by Waki J is used to identify and filter out, at an early stage, claims which may be trivial or without merit.
52. Before granting leave to file Judicial Review, the court must ascertain that the following three principals have been met:
a) The Application discloses a prima facie case,
b) The Applicant has locus standi
c) The Application is not time barred.
53. This court is satisfied that the Applicant has the requisite locus standi. After a perusal of evidence before this court is satisfied that it has been established that the Application is one with reasonable chance or possibility of success upon the completion of inter parties hearing.
54. From the initial perusal of the rival cases as advanced by the parties, the court is satisfied that the Applicant has made out a prima facie case that calls deeper interrogation through the substantive hearing phase.
55. In the case of Republic vs. Land Disputes Tribunal Court Central Division and Another Ex Parte Nzioka [2006] 1 EA 321 it was held;
“That leave should be granted, if on the material available the court considers, without going into the matter in depth, that there is an arguable case for granting leave”
56. Delving into the merits of the case at this stage will expose the parties’ cases prematurely to their prejudice which must not happen at the leave stage.
57. It is this court’s view that unless the leave operates as a stay as sought, then the process that the applicant seeks to challenge will be lost. As such the court is persuaded that there is a need to allow the leave to operate as a stay pending the determination of the case. However, it must be noted that the stay order does not amount to an order discharging the applicant from complying with its other tax obligations.
Costs;
58. In determining the issue of costs, this court is guided by the Supreme Court in the case of Jasbir Singh Rai & Others vs. TarlochanRai & Others observed that;
“In the classic common law style, the courts have to proceed on a case by case basis, to identify "good reasons" for such departure. An examination of evolving practices on this question shows that, as an example, matters in the domain of public interest litigation tend to be exempted from award of costs…”
Disposition;
59. The Applicant has made out a prima facie case that justifies the grant of the orders sought.
Order;
1) The Application is allowed.
2) Costs to the Applicant.
3) This file is marked as closed.
4) The Applicant shall file the substantive suit in a separate file within 21 days.
'
1) …Spent.
2) The Applicant, Fones Direct Limited, be granted leave to apply for:
a) An Order of Certiorari to remove to this Honourable Court to be quashed the administrative action and or Notice of the 1st, 2nd and 3rdRespondents of adding the Applicant’s Personal Identification Numbers (PIN) No. P051150583U to the VAT special table.
b) An Order of Prohibition prohibiting the 1st, 2nd and 3rdRespondents whether by themselves, agents, servants or howsoever otherwise, from suspending, cancelling, deactivating, deregistering, imposing PIN dormancy and or PIN restriction to the Applicant’s Personal Identification Numbers (PIN) No. P051150583U.
c) An Order of Mandamus compelling the 1st, 2nd and 3rdRespondents whether by themselves, agents, servants or howsoever otherwise acting pursuant to its authority or under any of them, to activate the Applicant’s Personal Identification Numbers (PIN) No. P051150583U so as to enable the Applicant to file their VAT returns & account for their ongoing taxable transactions under their self-assessment tax obligations
d) An Order of Prohibition prohibiting the 1st, 2nd and 3rdRespondents whether by themselves, agents, servants or howsoever otherwise, from threatening, intimidating or in any way harassing, acting in enforcement and/or implementation of the demand notices served upon the Applicant herein pursuant to the Demand Notices.
3) The leave does operate to stay any enforcement of the demands and/or notices pending the hearing and determination of the substantive Application for Judicial Review.
4) The costs of this Application be in favour of the Applicant.
2. The Applicant, Fones Direct Limited, contends that the Respondents being the Kenya Revenue Authority, the Commissioner for Investigations and Enforcement, and the Commissioner for the Large & Medium Taxpayers Department have exercised their statutory mandate in an unlawful, irrational, and procedurally improper manner, thereby violating both the Applicant’s Constitutional and Statutory Rights.
3. The Applicant avers that despite fully complying with an investigative request issued on 12thSeptember 2025 regarding purportedly fraudulent invoices allegedly generated by Viostruct Global Ltd, and having furnished all supporting documentation as required under Section 17 of the Value Added Tax Act, the Respondents unilaterally escalated the matter without rendering any findings, feedback, or adverse inference grounded in evidence.
4. The Applicant states that after attending a meeting convened on 18 September 2025 and resubmitting documents on 19th September 2025, it was abruptly informed on 29th September 2025 that its PIN had been placed in the “VAT Special Table” a measure which the Applicant asserts has no basis in law, is not recognized by the Value Added Tax Act or subsidiary legislation, and whose effect is to suspend its ability to file VAT returns or claim input VAT, thereby paralyzing its business operations.
5. The Applicant asserts that the said administrative action was taken without notice, reasons, or an opportunity to be heard, contrary to Article 47 of the Constitution and Sections 4(3) and 6 of the Fair Administrative Action Act.
6. It further contends that the subsequent demand of Kshs. 1,152,620 issued on 1st October 2025, coupled with the threat of criminal prosecution, was not only unfounded given that the VAT in question had already been remitted, but also amounted to double jeopardy. The Applicant maintains that the Respondents’ conduct particularly issuing parallel inquiries from different KRA departments, enlarging the scope of investigations without justification, and demanding Kshs. 33,486,663 through yet another unilateral letter dated 28 October 2025 illustrates an abuse of power, arbitrariness, and bad faith, thereby offending the rules of natural justice as articulated in such authorities as Pastoli v Kabale District Local Government Council & Others and Republic v Kenya Revenue Authority Exparte Sweety Enterprises Limited.
7. The Applicant further asserts that the Respondents acted ultra vires by purporting to suspend its PIN a power not anchored in tax legislation and equates such an action to the unconstitutional withholding of a national identity document, given its effect of depriving the Applicant of the ability to transact or comply with tax obligations.
8. According to the Applicant, the Respondents’ failure to provide a findings report, to consider the evidence furnished, or to address the legality of the so-called VAT Special Table, violated its legitimate expectation that the investigative process would be conducted fairly, transparently, and within the confines of the law. The Applicant additionally highlights a pattern of harassment, noting that similar allegations had been raised earlier in TAT No. E487 of 2025, which was settled through Alternative Dispute Resolution on 25th July 2025, as well as prior assessments in May 2024—demonstrating repetitive and unjustified targeting by the Respondents. It argues that the cumulative effect of these actions has inflicted severe commercial prejudice, including loss of clientele, damage to reputation, and disruption of its ability to generate or claim VAT through the eTIMS platform, thereby threatening the very viability of its business.
9. In the circumstances, the Applicant contends that the Respondents’ decisions were illegal, irrational, unprocedural, and violative of Articles 23(3) (f), 47, and 50 of the Constitution; that the Respondents failed to discharge their evidentiary burden once the Applicant provided all documentation required under the VAT Act and that the impugned administrative actions are nullities in law.
10. The Applicant therefore seeks leave to commence Judicial Review proceedings to challenge and quash the impugned decisions, to compel adherence to constitutional and statutory safeguards, and to protect its rights against continued unlawful administrative action.
11. The Application was canvassed by way of written submissions dated 12th November, 2025 and Supplementary submissions dated 14th November, 2025.
12. In its submissions, the Applicant urges the Court to find that it has satisfied the legal threshold for the grant of leave to commence judicial review proceedings against the Respondents’ decision to place it under the so-called VAT Special Table a measure the Applicant characterizes as ultra vires, irrational, illegal, and procedurally improper.
13. The Applicant underscores that the Respondents have expressly admitted, through the Replying Affidavit sworn on 7th November 2025, that the VAT Special Table is merely an “administrative measure,” yet no provision of the VAT Act, the Tax Procedures Act, or any written law authorizes its creation or its deployment as a punitive mechanism against taxpayers. The Applicant submits that this admission alone demonstrates that the impugned action is devoid of legal foundation and therefore susceptible to judicial review.
14. On ultra vires, the Applicant invokes Section 7(2) (a) of the Fair Administrative Actions Act, arguing that the Respondents acted without lawful authority and in excess of their statutory mandate by unilaterally subjecting the Applicant to a non-existent administrative regime without notice or a hearing. While acknowledging that the Kenya Revenue Authority is empowered to investigate and assess taxes, the Applicant maintains that such powers must be exercised within the four corners of the law. The unilateral imposition of punitive consequences, including the suspension of the Applicant’s ability to file VAT returns, is said to constitute an impermissible extension of jurisdiction.
15. In support, the Applicant relies on Fleur Investments Limited v Commissioner of Domestic Taxes & another [2018] KECA 341 (KLR), where the Court of Appeal held that although the tax authority may collect lawfully owed taxes, “imposing taxes where none is owed and arbitrarily imposing sanctions to enforce payment is acting in excess of its jurisdiction and is ultra vires and thus amenable to judicial review.” The Applicant further contends that permitting multiple departments of the Respondent to concurrently mete out separate sanctions amounted to an abuse of power and exposed it to double jeopardy.
16. On irrationality, the Applicant submits that the Respondents’ conduct offends the Eynesbury standard, in that despite full compliance with Section 17 of the VAT Act including provision of all requested documentation and participation in meetings—the Respondents failed to consider this material and instead imposed sanctions without justification. The Applicant stresses that the correct subject of investigation was the supplier, Viostruct Global Ltd, yet the Respondents punished the Applicant without any rational explanation.
17. In the absence of such explanation, the Applicant contends that the impugned action is inherently unreasonable within the meaning adopted in Republic v Institute of Certified Public Accountants of Kenya Ex Parte Joy Vipinchandra Bhatt t/a JV Bhatt & Company (2008) KEHC 3231 (KLR).
18. On illegality, the Applicant reiterates that the VAT Special Table has no statutory basis and that the Respondents have been unable to identify any provision creating or regulating it. The Respondents’ attempt to rely on general provisions of the VAT Act is described as a deliberate attempt to “send this Honourable Court on a wild goose chase,” given that those statutory provisions do not speak to the existence or legality of the impugned measure. The Applicant emphasizes that an administrative action founded on no law is per se illegal and ought to be quashed.
19. Regarding procedural impropriety, the Applicant submits that the Respondents’ contention that the Applicant ought to have invoked Section 51(1) of the Tax Procedures Act is misplaced, as the impugned action was not a lawful “tax decision” but an illegal administrative sanction unsupported by any statutory authority.
20. The Applicant notes the troubling chronology: it was placed on the VAT Special Table on 29th September 2025; was then issued with a demand on 1st October 2025; and a second demand on 28th October 2025 demonstrating that the punitive decision preceded any investigative findings or assessment.
21. The Applicant argues that it is a cardinal rule of due process that fact-finding cannot occur ex post facto, after punishment has already been imposed, and that the Respondents’ actions therefore amount to procedural impropriety of the most fundamental nature.
22. The Applicant further maintains that these issues fall outside the jurisdiction of the Tax Appeals Tribunal, making judicial review the appropriate recourse.
23. In response to the Respondents’ submissions dated 13th November 2025, the Applicant refutes the claim that it was placed on the VAT Special Table after issuance of an assessment, affirming that the placement occurred on 29thSeptember 2025, a month earlier. It submits that the Respondents’ shifting narrative, including reliance on irrelevant statutory provisions, reveals dishonesty and an entrenched disregard for procedural safeguards.
24. Having admitted that the VAT Special Table is an internal administrative measure, the Respondents, the Applicant argues, cannot simultaneously seek to legitimize it by invoking unrelated provisions of the VAT Act.
25. It is the Applicant’s submission that the impugned actions constitute serious illegality, irrationality, and procedural impropriety, all warranting the Court’s intervention. It therefore prays that leave be granted, that such leave operates as a stay of all enforcement measures, and that the Court protects it from the continuing harm caused by the unlawful suspension of its PIN an action likened to the suspension of an identity card and described as preposterous and unsupported by any law. Costs are also sought against the Respondents.
The Respondents’ Case;
26. In opposition to the Applicant’s Chamber Summons for leave, the Respondents contend that the Application is misconceived, premature, and improperly before the Court.
27. Through the Replying Affidavit sworn by Victor Orege on 7th November 2025, the Respondents emphasize that the Kenya Revenue Authority is a statutory body established under the Kenya Revenue Authority Act (Cap. 469), mandated under Section 5(2) (a) (i) and Article 210(1) of the Constitution to administer and enforce tax laws, including the Income Tax Act, the Value Added Tax Act, and the Excise Duty Act.
28. In execution of this mandate, the Respondents assert that the Applicant was subjected to investigations concerning VAT compliance, culminating in an assessment issued on 28 October 2025.
29. It is the Respondents’ position that arising from the nature of the investigations, the Applicant was placed under the VAT Special Table by a notification letter dated 29th September 2025 an administrative compliance mechanism designed to ensure adherence to the VAT Act.
30. The Respondents further maintain that any grievance relating to either the assessment or the Applicant’s placement under the VAT Special Table should be addressed through the statutory dispute-resolution mechanisms prescribed under Section 51(1) of the Tax Procedures Act.
31. They argue that the Applicant, having been issued with a tax assessment, is obligated to lodge a notice of objection with the Commissioner and pursue the internal processes provided therein, including the consideration of the objection and determination of its compliance status.
32. They rely on the authority of Speaker of National Assembly vs Njenga Karume [2008] 1 KLR 425, in which the Court of Appeal held that where statute provides a specific procedure or remedy, that procedure must be strictly adhered to and courts should decline to entertain proceedings brought contrary to the prescribed statutory path. On this basis, the Respondents assert that judicial review is unavailable at this stage, and that this Court lacks jurisdiction to entertain the Application.
33. The Respondents also reiterate that placement under the VAT Special Table is not punitive but an administrative enforcement measure fully within their statutory powers. They assert that the Applicant’s complaints of illegality, procedural impropriety, or ultra vires conduct are unfounded, as the Respondents acted within their lawful mandate to safeguard Government revenue.
34. They maintain that the Applicant has failed to exhaust the statutory remedies explicitly provided under the Tax Procedures Act and that judicial review cannot be invoked as a substitute for the objection and appeal mechanisms established by Parliament.
35. In their submissions, the Respondents maintain that the Applicant’s Application is premature and offends the Doctrine of Exhaustion as codified in Section 9 of the Fair Administrative Action Act. They emphasize that Section 9(2)–(4) requires litigants to pursue and exhaust all internal review and appeal mechanisms before invoking the Court’s supervisory jurisdiction, unless exceptional circumstances are demonstrated—none of which, they argue, have been shown by the Applicant. On this basis alone, the Respondents contend that the present Application is an impermissible “assault to section 9 of the FAA,” rendering leave unavailable.
36. The Respondents justify the placement of the Applicant in the VAT Special Table as a lawful administrative compliance mechanism targeting taxpayers who fail to file VAT returns under Section 44 of the VAT Act, file repeated nil returns in circumstances suggestive of under-declared output tax, engage in VAT fraud, utilize fictitious invoices, or present high or irregular VAT claims lacking documentation.
37. They submit that this administrative mechanism is buttressed by various provisions of the VAT Act, including Sections 5(3), 17(2), 19, 42, and 44.
38. The Respondents further assert that although investigations had been ongoing, the Applicant’s tax position crystallized only upon issuance of a tax assessment on 28th October 2025. They insist that the placement in the VAT Special Table on 29th October 2025 was a logical and direct consequence of that assessment, itself arising from the Applicant’s non-compliance with the aforementioned statutory provisions.
39. Invoking section 51(1) and (2) of the Tax Procedures Act, the Respondents argue that an assessment is a “tax decision” within the meaning of Section 2 of the Act, and that a taxpayer disputing such a decision must first lodge a notice of objection before pursuing any other remedy.
40. They contend that the Applicant’s removal from the VAT Special Table is wholly dependent on its compliance with this statutory objection procedure: if the objection succeeds and the assessment is vacated, the basis for the Applicant’s continued placement automatically falls away. The Respondents therefore assert that a complete, effective, and adequate remedy exists within the statutory framework, rendering judicial review inappropriate at this stage.
41. To reinforce the Exhaustion Doctrine, the Respondents rely on Speaker of National Assembly vs Karume (1992) KLR 21 and on the reasoning adopted in Republic v Nairobi City Water and Sewerage Company Limited; Ex parte Osman Batur Dedeoglu (Judicial Review Application No. Misc. E011 of 2020), which in turn referenced Geoffrey Muthinja Kabiru & 2 Others vs Samuel Munga Henry & 1756 others (2015) eKLR.
42. These authorities affirm that where Parliament has provided a specific dispute-resolution mechanism, litigants must pursue that mechanism before invoking the jurisdiction of the courts, which are to be “fora of last resort and not the first port of call.” The Respondents urge the Court to consider paragraphs 26–30 of the Osman Batur Dedeoglu decision, which underscore the mandatory nature of Section 9 of the Fair Administrative Action Act and the necessity of postponing judicial intervention until statutory remedies are exhausted.
43. The Respondents submit that the Applicant has not explained why it failed to invoke the legally prescribed objection process under the Tax Procedures Act, despite acknowledging that the Respondents’ actions may ultimately be amenable to Judicial Review.
44. They argue that the Applicant’s disregard of available statutory avenues mirrors the circumstances in Judicial Review Application No. Misc. E011 of 2020, where the Court declined jurisdiction for failure to exhaust administrative remedies.
45. The Respondents assert that the Applicant’s grievances are fully addressable under the objection mechanism provided in Section 51 of the Tax Procedures Act and that no exceptional circumstances justify departure from the doctrine of exhaustion.
46. The Respondents urge the Court to dismiss the Application for leave, contending that the dispute is one that falls squarely within the jurisdiction of the Commissioner under Section 51(1) of the Tax Procedures Act, and that the Applicant’s attempt to bypass the statutory tax-resolution framework is contrary to law. They therefore pray that the Applicant’s motion dated 31 October 2025 be dismissed with costs.
Analysis and Determination;
The issues for determination are:
1) Whether or not the Application has merit.
2) Who shall be the costs?
Whether or not the Application has merit.
47. The High Court in exercise of the powers donated to it under Order 53 of the Civil Procedure Rules has the jurisdiction to issue prerogative orders.
48. The process is initiated by first filling an application for leave to file the judicial review proceedings.
49. Under Article 165 of the Constitution the high Court in exercise of its supervisory power over administrative bodies like the Respondents can intervene where an illegal, unlawful or procedurally ailing decision has been made.
50. During the leave stage the Court ought not to delve deeply into the arguments of the parties. The court should make a cursory perusal of the evidence before it in deciding whether an Applicant’s case is sufficiently meritorious to justify the grant of leave to advance to the next stage.
51. In Uwe Meixner & another v Attorney General [2005] eKLR, it was held that the leave of court is a prerequisite to making a substantive Application for Judicial Review with a view to filtering out frivolous Applications and the grant or refusal involves an exercise of judicial discretion and the test to be applied is whether the Applicant has an arguable case. Thus, the first step in the Judicial Review procedure involves the mandatory "leave stage." At this stage an Application for leave to bring Judicial Review proceedings must first be made. The leave stage as held by Waki J is used to identify and filter out, at an early stage, claims which may be trivial or without merit.
52. Before granting leave to file Judicial Review, the court must ascertain that the following three principals have been met:
a) The Application discloses a prima facie case,
b) The Applicant has locus standi
c) The Application is not time barred.
53. This court is satisfied that the Applicant has the requisite locus standi. After a perusal of evidence before this court is satisfied that it has been established that the Application is one with reasonable chance or possibility of success upon the completion of inter parties hearing.
54. From the initial perusal of the rival cases as advanced by the parties, the court is satisfied that the Applicant has made out a prima facie case that calls deeper interrogation through the substantive hearing phase.
55. In the case of Republic vs. Land Disputes Tribunal Court Central Division and Another Ex Parte Nzioka [2006] 1 EA 321 it was held;
“That leave should be granted, if on the material available the court considers, without going into the matter in depth, that there is an arguable case for granting leave”
56. Delving into the merits of the case at this stage will expose the parties’ cases prematurely to their prejudice which must not happen at the leave stage.
57. It is this court’s view that unless the leave operates as a stay as sought, then the process that the applicant seeks to challenge will be lost. As such the court is persuaded that there is a need to allow the leave to operate as a stay pending the determination of the case. However, it must be noted that the stay order does not amount to an order discharging the applicant from complying with its other tax obligations.
Costs;
58. In determining the issue of costs, this court is guided by the Supreme Court in the case of Jasbir Singh Rai & Others vs. TarlochanRai & Others observed that;
“In the classic common law style, the courts have to proceed on a case by case basis, to identify "good reasons" for such departure. An examination of evolving practices on this question shows that, as an example, matters in the domain of public interest litigation tend to be exempted from award of costs…”
Disposition;
59. The Applicant has made out a prima facie case that justifies the grant of the orders sought.
Order;
1) The Application is allowed.
2) Costs to the Applicant.
3) This file is marked as closed.
4) The Applicant shall file the substantive suit in a separate file within 21 days.
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