Introduction
1. This is a judgment on an appeal lodged by the Commissioner of Customs and Border Control (hereinafter “the Appellant”) against the judgment of the Tax Appeals Tribunal delivered on 22nd March 2024, in favour of CFAO AGRI LIMITED (hereinafter “the Respondent”) in which the. The dispute arises from a post-clearance customs audit conducted by the Appellant’s officers.
2. The background of the matter is that the Appellant, through its Post Clearance Audit team, conducted a desk audit of the Respondent’s customs transactions for the period of October 2017 to October 2022
3. According to the Appellant, the audit revealed a short levy of taxes on imported fertilizer products, to wit, granular urea, due to the application of Import Declaration Fees (IDF) and Railway Development Levy (RDL) rates of 1.5% instead of 3.5% and 2% respectively. Consequently, the Appellant vide its letter of 14th October 2022 issued a demand notice to the Respondent in the sum of Kshs. 46,753,820/- being the short-levied taxes.
4. On 18th October 2022, the Respondent applied for Review of the Appellant’s said decision under Section 229 of the East African Community Customs Management Act, 2004 (hereinafter referred to as “EACCMA, 2004”), citing among others, that it had obtained an approval through the Kenya Association of Manufacturers (hereinafter referred to as “KAM”) for the application of preferential rates (1.5%) on the fertilizer products, since the imports were raw materials for the manufacture of soil and crop fertilizers.
5. Following the objection, a meeting was held on 17th November 2022 at the Respondent’s Eldoret factory. The Appellant, after conducting the assessment of the factory process, formed the opinion that the imported goods were not raw materials by fully manufactured products and that the Appellant merely mixed and packaged locally. This led to an amended assessment amounting to Kshs. 83,246,482, which was issued via the Appellant’s letter of 30th November 2022.
6. The increase in the tax assessment was occasioned by the fact that apart from the granular urea (which had earlier been assessed at Kshs. 46,753,820/-), the Appellant established from the factory visit that the Respondent also imported two other fertilizers, that is, Di-Ammonium Phosphate (“DAP”) and Potassium Chloride.
7. In response to the amended demand, the Respondent, through its tax agent, submitted a further Review application on December 27, 2022. The Appellant then issued its Review decision on January 27, 2023, affirming the tax assessment.
8. Dissatisfied with the Appellant’s Review decision, the Respondent filed an appeal before the Tax Appeals Tribunal. On 22nd March 2024, the Tribunal delivered its Judgment in favour of the Respondent, holding that the Review decision was issued out of time in contravention of Section 229(4) of the East African Community Customs Management Act (EACCMA), 2004.
The Appeal and Submissions
9. The Appellant being dissatisfied with the judgment of the Tax Appeals Tribunal delivered on 22nd March 2024 in Tax Appeals Tribunal Appeal No. E064 of 2023 appealed to this Court against the said judgment on the grounds THAT;
i. The Tax Appeals Tribunal erred in law and in fact by misconstruing the provisions of Section 229 (4) of the East African Community Customs Management Act (EACCMA) 2004 thus arriving at an erroneous decision.
ii. The Tax Appeals Tribunal misguided itself on the two limbs of Section 229 (4) of EACCMA and the interpretation of the provision.
iii. The Tax Appeals Tribunal erred in law and fact in finding that the word “and” under Section 229 (4) of EACCMA makes the limbs of the provision conjunctive thus arriving at the erroneous conclusion that the Appellant issued its Review decision outside of statutory timelines.
iv. The Honourable Tribunal erred in law and fact by interpreting Section 229 (4) of EACCMA on the basis of Section 51 (11) of the Tax Procedures Act prior to the amendment by the Finance Act No. 22 of 2022.
10. Based on the foregoing, the Appellant prayed for the following orders:
a) That this Appeal be allowed.
b) That the Judgment of the Tax Appeals Tribunal, 22nd March 2024, issued against the Appellant be hereby set aside.
c) That the Appellant's Review Decision dated 27th January 2023 confirming the assessments of Kshs. 83,246,482.00 be upheld.
d) That costs be awarded to the Appellant herein.
11. In support of the Appeal, the Appellant filed a Record of Appeal dated 21st May 2024 and submissions dated 28th November 2024.
12. The Respondent opposed the appeal through a statement of facts dated 19/6/2024, and the submissions dated 21st February 2025.
13. The Respondent contended that the appeal was fatally defective, as the original dispute had been against the Commissioner of Customs & Border Control, not the Commissioner of Domestic Taxes.
14. It was further the Respondent’s position that, in any event, the appeal was without merit. According to the Respondent, the provisions of Section 229(4) were mandatory, and the Commissioner’s failure to issue a timely decision meant the application for Review stood allowed. The Respondent argued that a request for additional information did not extend the statutory 30-day period and that the Tribunal had been correct in dismissing the Commissioner’s position.
15. The Respondent also maintained that the Tribunal rightly distinguished the case from the former Section 51(11) of the Tax Procedures Act, which previously allowed timelines to restart upon receipt of additional information. The Respondent concluded that the appeal lacked a legal basis and urged the High Court to dismiss it with costs.
16. The submissions were highlighted before me on 12th March 2025, during which counsel for both parties largely reiterated the arguments and positions articulated in their respective written submissions.
Analysis and determination.
17. I have carefully considered the Appellant’s Memorandum of Appeal dated 17th May 2024, the Respondent’s Statement of Facts dated 19th June 2024, as well as the written submissions filed by both parties in support of their respective positions.
18. At the outset, I concur with the Respondent’s observation regarding the misdescription of the Appellant in this appeal. Although the appeal is stated to have been filed in the name of the Commissioner of Domestic Taxes, the proper party should have been the Commissioner of Customs and Border Control, who was the Respondent before the Tribunal. However, it is my considered view that this misdescription is not fatal to the proceedings. Both parties were fully aware of the identity of the party intended to be sued, and no prejudice has been occasioned.
19. Dealing with a similar question, the Court in Fubeco China Fushun v Naiposha Company Limited & 11 Others, held that:
“The use of FUBECO CHINA FUSHUN as the plaintiff, at worst, is a misdescription of a party… Such misdescription… is not fatal to the proceedings and does not defeat a party’s cause of action… This is not a case of a non-existent or faceless entity… It is a case of pure misdescription… and it is governed by the law on misdescription of parties in a contract.”
20. Accordingly, I find that the error in naming the Appellant does not go to the root of the matter and does not warrant the striking out of the appeal.
21. On the substance of the appeal, upon review of the pleadings and submissions on record, it is my considered view that the sole issue for determination in this appeal is whether the Tribunal erred in law and in fact in finding that the Respondent’s application for review dated 18th October 2022 stood allowed by operation of law, on account of the Appellant’s failure to comply with the requirements of Section 229(4) of the EACCMA, 2004.
22. The Appellant contended that the Tribunal erred in its interpretation and application of Section 229(4) of the EACCMA, arguing that the Tribunal wrongly concluded that it had failed to issue a review decision within the prescribed 30-day period.
23. The Appellant maintained that the Tribunal erred in holding that the Appellant ought to have issued the review decision within 30 days upon receiving the Respondent’s review dated 18th October 2022, whether the Appellant had requested for additional information or not.
24. The Appellant asserted that the correct interpretation of Section 229(4) of the EACCMA, 2004 ought to be that the 30-day period within which the Commissioner ought to make a decision can only start running after receipt of the “further information” contemplated under the section, hence the use of the expression “any further information the Commissioner may require” in the provision.
25. Conversely, the Respondent submitted that the Tribunal was right in its finding since the Appellant did not communicate a review decision within the statutory timeline, and that, pursuant to Section 229(4) of the EACCMA, the application for review therefore stood allowed by operation of law.
26. According to the Respondent, the 30-day period provided under Section 229(4) of the EACCMA, 2004 is fixed and starts running from the date of receipt of the Review application, and that no room for any extension is allowed under the Act. The Respondent maintained that, the Review application, having been submitted on 18th October 2022, the Appellant had only up to 18th November 2022 to issue a decision on the Review application.
27. It was further the Respondent’s position that the Tribunal was right in its finding that the Review decision issued by the Appellant on 27th January 2023 was way beyond the 30-day statutory time limit, and that the Respondent’s position as communicated vide its Review application of 18th October 2022 had been allowed by operation of the law.
28. The applicable legal framework is found under Section 229 of the EACCMA, which provides in relevant part as follows: -
“229 Application for Review to Commissioner
(1) A person directly affected by the decision or omission of the Commissioner or any other officer on matters relating to Customs shall within thirty days of the date of the decision or omission lodge an application for review of that decision or omission.
(2) The application referred to under subsection (1) shall be lodged with the Commissioner in writing stating the grounds upon which it is lodged.
(3) Where the Commissioner is satisfied that, owing to absence from the Partner State, sickness or other reasonable cause, the person affected by the decision or omission of the Commissioner was unable to lodge an application within the time specified in subsection (1), and there has been no unreasonable delay by the person in lodging the application, the Commissioner may accept the application lodged after the time specified in subsection (1).
(4) The Commissioner shall, within a period not exceeding thirty days of the receipt of the application under subsection (2) and any further information the Commissioner may require from the person lodging the application, communicate his or her decision in writing to the person lodging the application stating reasons for the decision.
(5) Where the Commissioner has not communicated his or her decision review within to the person lodging the application for the time specified in subsection (4), the Commissioner shall be deemed to have made a decision to allow the application.”
29. In the present case, it is common ground that the Respondent submitted an application for review under Section 229(1) and (2) of the EACCMA, 2004, by way of a letter dated 18th October 2022, which was received by the Appellant on 19th October 2022. It is also not in dispute that following the said application, the parties engaged further, culminating in a subsequent review application by the Respondent dated 29th December 2022, in response to which the Appellant issued a review decision on 27th January 2023.
30. Specifically, the Respondent lodged its initial review application on 18th October 2022. The Appellant responded by conducting a factory inspection on 17th November 2022. Thereafter, it issued an amended demand notice on 30th November 2022. The Respondent then filed a second review application dated 29th December 2022, which was received by the Appellant on 3rd January 2023. The corresponding review decision was issued on 27th January 2023.
31. In its ruling, the Tribunal found that the 30-day statutory timeline commenced on the date of the original review application and held that any decision rendered outside that period was time-barred, irrespective of whether additional information had been requested by the Commissioner. With the greatest respect, I find that this interpretation does not accord with the express language of Section 229(4) of the EACCMA.
32. A careful reading of Section 229(4) reveals that the 30-day period within which the Commissioner is required to communicate a decision is triggered by either: (i) the receipt of the application for review, or (ii) the receipt of further information required by the Commissioner — whichever is later. The provision is clearly worded, and in this case, it is undisputed that the Commissioner did request additional information and undertook a site/factory visit, in which the Respondent participated fully.
33. The record shows that the factory visit by the Appellant resulted in an amended demand notice dated 30th November 2022 in the sum of Kshs. 83,246,482. In response, the Respondent submitted a fresh review application dated 29th December 2022 (received by the Appellant on 3rd January 2023). In the covering email, the Respondent’s tax agent stated, in part:
“We… on behalf of CFAO Agri Limited, hereby lodge an electronic application for review pursuant to Section 229(1) of the East African Community Customs Management Act, 2004 (“EACCMA”), on the Commissioner’s amended demand notice of Kshs. 83,246,482.00 issued to our client on 30 November 2022.
We are happy to provide additional information/clarification upon request.
We will also submit a hard copy of the same to your offices in the first week of January 2023.”
34. From the above, it is evident that the parties' engagement led to the evolution of the original demand notice of Kshs. 46,753,820 (which was the subject of the initial review application) into a significantly revised and enhanced demand of Kshs. 83,246,482.00. The Respondent responded to this revised demand by lodging a new review application dated 29th December 2022. This fresh application effectively rendered the earlier application of 18th October 2022 moot and superseded.
35. In light of the above, it is clear that the operative review application for purposes of Section 229(4) was the one dated 29th December 2022. Accordingly, the 30-day period for the Commissioner to issue a review decision could only begin to run from that date.
36. The Respondent, having opted to file a fresh review application under Section 229(1), as opposed to merely submitting additional information under Section 229(4), triggered a new statutory timeline. Had the Respondent instead chosen to supplement its initial application with additional information, the original application would have remained active. In either scenario, the 30-day period would be calculated from the later of the two triggering events —(i) the receipt of the application for review or (ii) the receipt of additional information; in this case, both dates fell on 29th December 2022.
37. I have duly considered the six authorities cited by the Respondent in support of its position. While I appreciate the jurisprudential value of those decisions, it must be emphasized that they are only persuasive and not binding upon this Court. Moreover, the factual matrices in those cases are distinguishable from the present matter. For instance, in Equity Group Holdings Limited v Commissioner of Domestic Taxes [2021] eKLR, the court was not required to consider the legal effect of subsequent interactions or engagements between the Commissioner and the taxpayer following the initial application for review. In any event, that decision was rendered under the Tax Procedures Act, which differs from the governing legal framework in this case, namely the East African Community Customs Management Act, 2004 (EACCMA).
38. Similarly, the case of Commissioner of Customs and Border Control v Bic East Africa Limited (Income Tax Appeal E091 of 2021) [2022] KEHC 15981 (KLR), relied upon by the Respondent, is distinguishable. In that matter, the timing and receipt of the second review application by the Commissioner were in dispute. In contrast, in the present case, there is no such ambiguity. The Appellant has clearly demonstrated, and confirmed by the record, that the second review application dated 29th December 2022 was received on 3rd January 2023. Accordingly, the Review Decision issued on 27th January 2023 was well within the 30-day period prescribed under Section 229(4) of the EACCMA, 2004.
39. In light of the foregoing analysis, I respectfully disagree with the Tribunal’s conclusion. It is my considered finding that the Appellant’s review decision dated 27th January 2023 was issued within the statutory timeline stipulated under Section 229(4) of the East African Community Customs Management Act, 2004, and is therefore valid in law.
40. Finally, I note that the Honourable Tribunal did not proceed to determine the substantive merits of the dispute. Being an appellate court, I will deliberately refrain from making any pronouncement on the merits at this stage. The appropriate course of action is to remit the matter to the Tribunal for determination of the substantive issues raised.
Disposition
41. In the result, I find and hold that the Appellant complied with the requirements of Section 229(4) of the East African Community Customs Management Act, 2004. Consequently, the Tribunal erred in law and in fact in finding that the Respondent’s application for review stood allowed by operation of law.
42. Accordingly, I make the following orders:
i. The Appeal is hereby allowed with costs.
ii. The Judgment of the Tax Appeals Tribunal dated 22nd March 2024 is hereby set aside in its entirety.
iii. This matter is remitted back to the Tax Appeals Tribunal for a determination on the merits.
43. It is so Ordered
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
30TH DAY OF JUNE 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
Ms. Nganga………………….…..for the Appellant
Ms Malik & Ms. Onyango…..... for the Respondent
1. This is a judgment on an appeal lodged by the Commissioner of Customs and Border Control (hereinafter “the Appellant”) against the judgment of the Tax Appeals Tribunal delivered on 22nd March 2024, in favour of CFAO AGRI LIMITED (hereinafter “the Respondent”) in which the. The dispute arises from a post-clearance customs audit conducted by the Appellant’s officers.
2. The background of the matter is that the Appellant, through its Post Clearance Audit team, conducted a desk audit of the Respondent’s customs transactions for the period of October 2017 to October 2022
3. According to the Appellant, the audit revealed a short levy of taxes on imported fertilizer products, to wit, granular urea, due to the application of Import Declaration Fees (IDF) and Railway Development Levy (RDL) rates of 1.5% instead of 3.5% and 2% respectively. Consequently, the Appellant vide its letter of 14th October 2022 issued a demand notice to the Respondent in the sum of Kshs. 46,753,820/- being the short-levied taxes.
4. On 18th October 2022, the Respondent applied for Review of the Appellant’s said decision under Section 229 of the East African Community Customs Management Act, 2004 (hereinafter referred to as “EACCMA, 2004”), citing among others, that it had obtained an approval through the Kenya Association of Manufacturers (hereinafter referred to as “KAM”) for the application of preferential rates (1.5%) on the fertilizer products, since the imports were raw materials for the manufacture of soil and crop fertilizers.
5. Following the objection, a meeting was held on 17th November 2022 at the Respondent’s Eldoret factory. The Appellant, after conducting the assessment of the factory process, formed the opinion that the imported goods were not raw materials by fully manufactured products and that the Appellant merely mixed and packaged locally. This led to an amended assessment amounting to Kshs. 83,246,482, which was issued via the Appellant’s letter of 30th November 2022.
6. The increase in the tax assessment was occasioned by the fact that apart from the granular urea (which had earlier been assessed at Kshs. 46,753,820/-), the Appellant established from the factory visit that the Respondent also imported two other fertilizers, that is, Di-Ammonium Phosphate (“DAP”) and Potassium Chloride.
7. In response to the amended demand, the Respondent, through its tax agent, submitted a further Review application on December 27, 2022. The Appellant then issued its Review decision on January 27, 2023, affirming the tax assessment.
8. Dissatisfied with the Appellant’s Review decision, the Respondent filed an appeal before the Tax Appeals Tribunal. On 22nd March 2024, the Tribunal delivered its Judgment in favour of the Respondent, holding that the Review decision was issued out of time in contravention of Section 229(4) of the East African Community Customs Management Act (EACCMA), 2004.
The Appeal and Submissions
9. The Appellant being dissatisfied with the judgment of the Tax Appeals Tribunal delivered on 22nd March 2024 in Tax Appeals Tribunal Appeal No. E064 of 2023 appealed to this Court against the said judgment on the grounds THAT;
i. The Tax Appeals Tribunal erred in law and in fact by misconstruing the provisions of Section 229 (4) of the East African Community Customs Management Act (EACCMA) 2004 thus arriving at an erroneous decision.
ii. The Tax Appeals Tribunal misguided itself on the two limbs of Section 229 (4) of EACCMA and the interpretation of the provision.
iii. The Tax Appeals Tribunal erred in law and fact in finding that the word “and” under Section 229 (4) of EACCMA makes the limbs of the provision conjunctive thus arriving at the erroneous conclusion that the Appellant issued its Review decision outside of statutory timelines.
iv. The Honourable Tribunal erred in law and fact by interpreting Section 229 (4) of EACCMA on the basis of Section 51 (11) of the Tax Procedures Act prior to the amendment by the Finance Act No. 22 of 2022.
10. Based on the foregoing, the Appellant prayed for the following orders:
a) That this Appeal be allowed.
b) That the Judgment of the Tax Appeals Tribunal, 22nd March 2024, issued against the Appellant be hereby set aside.
c) That the Appellant's Review Decision dated 27th January 2023 confirming the assessments of Kshs. 83,246,482.00 be upheld.
d) That costs be awarded to the Appellant herein.
11. In support of the Appeal, the Appellant filed a Record of Appeal dated 21st May 2024 and submissions dated 28th November 2024.
12. The Respondent opposed the appeal through a statement of facts dated 19/6/2024, and the submissions dated 21st February 2025.
13. The Respondent contended that the appeal was fatally defective, as the original dispute had been against the Commissioner of Customs & Border Control, not the Commissioner of Domestic Taxes.
14. It was further the Respondent’s position that, in any event, the appeal was without merit. According to the Respondent, the provisions of Section 229(4) were mandatory, and the Commissioner’s failure to issue a timely decision meant the application for Review stood allowed. The Respondent argued that a request for additional information did not extend the statutory 30-day period and that the Tribunal had been correct in dismissing the Commissioner’s position.
15. The Respondent also maintained that the Tribunal rightly distinguished the case from the former Section 51(11) of the Tax Procedures Act, which previously allowed timelines to restart upon receipt of additional information. The Respondent concluded that the appeal lacked a legal basis and urged the High Court to dismiss it with costs.
16. The submissions were highlighted before me on 12th March 2025, during which counsel for both parties largely reiterated the arguments and positions articulated in their respective written submissions.
Analysis and determination.
17. I have carefully considered the Appellant’s Memorandum of Appeal dated 17th May 2024, the Respondent’s Statement of Facts dated 19th June 2024, as well as the written submissions filed by both parties in support of their respective positions.
18. At the outset, I concur with the Respondent’s observation regarding the misdescription of the Appellant in this appeal. Although the appeal is stated to have been filed in the name of the Commissioner of Domestic Taxes, the proper party should have been the Commissioner of Customs and Border Control, who was the Respondent before the Tribunal. However, it is my considered view that this misdescription is not fatal to the proceedings. Both parties were fully aware of the identity of the party intended to be sued, and no prejudice has been occasioned.
19. Dealing with a similar question, the Court in Fubeco China Fushun v Naiposha Company Limited & 11 Others, held that:
“The use of FUBECO CHINA FUSHUN as the plaintiff, at worst, is a misdescription of a party… Such misdescription… is not fatal to the proceedings and does not defeat a party’s cause of action… This is not a case of a non-existent or faceless entity… It is a case of pure misdescription… and it is governed by the law on misdescription of parties in a contract.”
20. Accordingly, I find that the error in naming the Appellant does not go to the root of the matter and does not warrant the striking out of the appeal.
21. On the substance of the appeal, upon review of the pleadings and submissions on record, it is my considered view that the sole issue for determination in this appeal is whether the Tribunal erred in law and in fact in finding that the Respondent’s application for review dated 18th October 2022 stood allowed by operation of law, on account of the Appellant’s failure to comply with the requirements of Section 229(4) of the EACCMA, 2004.
22. The Appellant contended that the Tribunal erred in its interpretation and application of Section 229(4) of the EACCMA, arguing that the Tribunal wrongly concluded that it had failed to issue a review decision within the prescribed 30-day period.
23. The Appellant maintained that the Tribunal erred in holding that the Appellant ought to have issued the review decision within 30 days upon receiving the Respondent’s review dated 18th October 2022, whether the Appellant had requested for additional information or not.
24. The Appellant asserted that the correct interpretation of Section 229(4) of the EACCMA, 2004 ought to be that the 30-day period within which the Commissioner ought to make a decision can only start running after receipt of the “further information” contemplated under the section, hence the use of the expression “any further information the Commissioner may require” in the provision.
25. Conversely, the Respondent submitted that the Tribunal was right in its finding since the Appellant did not communicate a review decision within the statutory timeline, and that, pursuant to Section 229(4) of the EACCMA, the application for review therefore stood allowed by operation of law.
26. According to the Respondent, the 30-day period provided under Section 229(4) of the EACCMA, 2004 is fixed and starts running from the date of receipt of the Review application, and that no room for any extension is allowed under the Act. The Respondent maintained that, the Review application, having been submitted on 18th October 2022, the Appellant had only up to 18th November 2022 to issue a decision on the Review application.
27. It was further the Respondent’s position that the Tribunal was right in its finding that the Review decision issued by the Appellant on 27th January 2023 was way beyond the 30-day statutory time limit, and that the Respondent’s position as communicated vide its Review application of 18th October 2022 had been allowed by operation of the law.
28. The applicable legal framework is found under Section 229 of the EACCMA, which provides in relevant part as follows: -
“229 Application for Review to Commissioner
(1) A person directly affected by the decision or omission of the Commissioner or any other officer on matters relating to Customs shall within thirty days of the date of the decision or omission lodge an application for review of that decision or omission.
(2) The application referred to under subsection (1) shall be lodged with the Commissioner in writing stating the grounds upon which it is lodged.
(3) Where the Commissioner is satisfied that, owing to absence from the Partner State, sickness or other reasonable cause, the person affected by the decision or omission of the Commissioner was unable to lodge an application within the time specified in subsection (1), and there has been no unreasonable delay by the person in lodging the application, the Commissioner may accept the application lodged after the time specified in subsection (1).
(4) The Commissioner shall, within a period not exceeding thirty days of the receipt of the application under subsection (2) and any further information the Commissioner may require from the person lodging the application, communicate his or her decision in writing to the person lodging the application stating reasons for the decision.
(5) Where the Commissioner has not communicated his or her decision review within to the person lodging the application for the time specified in subsection (4), the Commissioner shall be deemed to have made a decision to allow the application.”
29. In the present case, it is common ground that the Respondent submitted an application for review under Section 229(1) and (2) of the EACCMA, 2004, by way of a letter dated 18th October 2022, which was received by the Appellant on 19th October 2022. It is also not in dispute that following the said application, the parties engaged further, culminating in a subsequent review application by the Respondent dated 29th December 2022, in response to which the Appellant issued a review decision on 27th January 2023.
30. Specifically, the Respondent lodged its initial review application on 18th October 2022. The Appellant responded by conducting a factory inspection on 17th November 2022. Thereafter, it issued an amended demand notice on 30th November 2022. The Respondent then filed a second review application dated 29th December 2022, which was received by the Appellant on 3rd January 2023. The corresponding review decision was issued on 27th January 2023.
31. In its ruling, the Tribunal found that the 30-day statutory timeline commenced on the date of the original review application and held that any decision rendered outside that period was time-barred, irrespective of whether additional information had been requested by the Commissioner. With the greatest respect, I find that this interpretation does not accord with the express language of Section 229(4) of the EACCMA.
32. A careful reading of Section 229(4) reveals that the 30-day period within which the Commissioner is required to communicate a decision is triggered by either: (i) the receipt of the application for review, or (ii) the receipt of further information required by the Commissioner — whichever is later. The provision is clearly worded, and in this case, it is undisputed that the Commissioner did request additional information and undertook a site/factory visit, in which the Respondent participated fully.
33. The record shows that the factory visit by the Appellant resulted in an amended demand notice dated 30th November 2022 in the sum of Kshs. 83,246,482. In response, the Respondent submitted a fresh review application dated 29th December 2022 (received by the Appellant on 3rd January 2023). In the covering email, the Respondent’s tax agent stated, in part:
“We… on behalf of CFAO Agri Limited, hereby lodge an electronic application for review pursuant to Section 229(1) of the East African Community Customs Management Act, 2004 (“EACCMA”), on the Commissioner’s amended demand notice of Kshs. 83,246,482.00 issued to our client on 30 November 2022.
We are happy to provide additional information/clarification upon request.
We will also submit a hard copy of the same to your offices in the first week of January 2023.”
34. From the above, it is evident that the parties' engagement led to the evolution of the original demand notice of Kshs. 46,753,820 (which was the subject of the initial review application) into a significantly revised and enhanced demand of Kshs. 83,246,482.00. The Respondent responded to this revised demand by lodging a new review application dated 29th December 2022. This fresh application effectively rendered the earlier application of 18th October 2022 moot and superseded.
35. In light of the above, it is clear that the operative review application for purposes of Section 229(4) was the one dated 29th December 2022. Accordingly, the 30-day period for the Commissioner to issue a review decision could only begin to run from that date.
36. The Respondent, having opted to file a fresh review application under Section 229(1), as opposed to merely submitting additional information under Section 229(4), triggered a new statutory timeline. Had the Respondent instead chosen to supplement its initial application with additional information, the original application would have remained active. In either scenario, the 30-day period would be calculated from the later of the two triggering events —(i) the receipt of the application for review or (ii) the receipt of additional information; in this case, both dates fell on 29th December 2022.
37. I have duly considered the six authorities cited by the Respondent in support of its position. While I appreciate the jurisprudential value of those decisions, it must be emphasized that they are only persuasive and not binding upon this Court. Moreover, the factual matrices in those cases are distinguishable from the present matter. For instance, in Equity Group Holdings Limited v Commissioner of Domestic Taxes [2021] eKLR, the court was not required to consider the legal effect of subsequent interactions or engagements between the Commissioner and the taxpayer following the initial application for review. In any event, that decision was rendered under the Tax Procedures Act, which differs from the governing legal framework in this case, namely the East African Community Customs Management Act, 2004 (EACCMA).
38. Similarly, the case of Commissioner of Customs and Border Control v Bic East Africa Limited (Income Tax Appeal E091 of 2021) [2022] KEHC 15981 (KLR), relied upon by the Respondent, is distinguishable. In that matter, the timing and receipt of the second review application by the Commissioner were in dispute. In contrast, in the present case, there is no such ambiguity. The Appellant has clearly demonstrated, and confirmed by the record, that the second review application dated 29th December 2022 was received on 3rd January 2023. Accordingly, the Review Decision issued on 27th January 2023 was well within the 30-day period prescribed under Section 229(4) of the EACCMA, 2004.
39. In light of the foregoing analysis, I respectfully disagree with the Tribunal’s conclusion. It is my considered finding that the Appellant’s review decision dated 27th January 2023 was issued within the statutory timeline stipulated under Section 229(4) of the East African Community Customs Management Act, 2004, and is therefore valid in law.
40. Finally, I note that the Honourable Tribunal did not proceed to determine the substantive merits of the dispute. Being an appellate court, I will deliberately refrain from making any pronouncement on the merits at this stage. The appropriate course of action is to remit the matter to the Tribunal for determination of the substantive issues raised.
Disposition
41. In the result, I find and hold that the Appellant complied with the requirements of Section 229(4) of the East African Community Customs Management Act, 2004. Consequently, the Tribunal erred in law and in fact in finding that the Respondent’s application for review stood allowed by operation of law.
42. Accordingly, I make the following orders:
i. The Appeal is hereby allowed with costs.
ii. The Judgment of the Tax Appeals Tribunal dated 22nd March 2024 is hereby set aside in its entirety.
iii. This matter is remitted back to the Tax Appeals Tribunal for a determination on the merits.
43. It is so Ordered
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
30TH DAY OF JUNE 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
Ms. Nganga………………….…..for the Appellant
Ms Malik & Ms. Onyango…..... for the Respondent