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REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
MILLIMANI COMMERCIAL & TAX DIVISION
TAX APPEAL NO. E044 OF 2025
NELSON ANDAYI HAVI T/A
HAVI & COMPANY ADVOCATES………………………… APPELLANT
VERSUS
COMMISSIONER - GENERAL
KENYA REVENUE AUTHORITY…………….…..……..RESPONDENT
(Being an appeal from the judgment of the Tax Appeals Tribunal, delivered on 12 th February 2025, in Tax Appeals Tribunal Appeal No E345 of 2024)
Arising From
NELSON ANDAYI HAVI T/A
HAVI & COMPANY ADVOCATES…………………..…… APPELLANT
VERSUS
COMMISSIONER -GENERAL
KENYA REVENUE AUTHORITY………………………..RESPONDENT
JUDGMENT
INTRODUCTION
This appeal arises from the judgment/decree of the Tax Appeals Tribunal dated 12.02.2025, where the said tribunal held that the Appellant did not file an objection to the tax decision made by the respondent on 03.02.2021, and his subsequent objections lodged on 21.05.2021 and 06.04.2021 were time-barred.
The tribunal further held that the Appellant did not object to the preliminary findings made by the respondent on 22.04.2022 and that his responses, made on 12.05.2022 and 19.07.2022, lacked elements of an objection as set out under Section 51(3) of the Tax Procedures Act, Cap 469B, Laws of Kenya.
Finally, the tribunal also held that the demand made by the respondent to the Appellant on 28 th August, 2023, the agency notices issued by the respondent in respect to the Appellants accounts on 29 th August, 2023, adjustments made on the Appellants I-Tax portal on 6 th and 27 th September, 2023 and their refusal to issue the appellant with a Tax compliance certificate on 26 th October, 2023 ( hereinafter collectively referred to as the respondents five decision’s) were all not appealable decision’s for purposes of Section 3 of the Tax Appeals Procedures Act , Cap 469B laws of Kenya. Based on the foregoing, the Tribunal held that it lacked jurisdiction to handle the Appeal filed and proceeded to strike it out. Each party was to bear their own costs.
CASE BACKGROUND & PLEADINGS.
Appellants pleadings
The Appellant relied on his statement of facts dated 25 th March, 2024, together with the supporting documents attached thereto. He averred that on 28 th August, 2023, the respondent demanded from him tax arrears totalling Kshs.17,081,968.63 , comprising Income Tax of Kshs.1,050,960.88 for the period January 2015 to December 2020 and Value Added Tax of Kshs.16,031,007.75 for the period April 2016 to July 2023. Subsequently, on 29 th August 2023, the respondent issued agency notices to all his bankers, demanding tax arrears as aforementioned.
It was his contention that the tax demand of Kshs.17,081,986.63 was made in disregard of various correspondences exchanged and prior settlements reached by the parties herein. He further noted that, within the period of 3 rd February, 2021 to 27 th February, 2023 the respondent had made contradictory tax demand upon him, namely;
Kshs.12,900,559.40 on 3 rd February, 2021
Kshs.92,384.00 on 22 nd April, 2022 and
Kshs.8,963,204.20 on 13 th February, 2023
He had demanded a clarification to clear the air on these contradictory demands, but none was offered. His deduction, therefore, was that any revenue officer assigned to handle his tax file would ignore all the previous settlements made or arrived at, and would proceed as though it were a fresh investigation. To that extent, the respondents'' demands were unreasonable, unjustified, and logically should have been removed and/or rectified on his I-Tax portal.
Arising from the demands of 28 th August, 2023, and Agency notices issued on 29 th August, 2023, the Appellant did respond to the said letters through his letter dated 31 st August, 2023, and also opted file Judicial Review Application No. E129 of 2023, Nelson Andayi Havi Vrs Kenya Revenue Authority, challenging the unlawful demands and closure of his Bank accounts. Before the said judicial review Application was heard, the Respondent did give him a reprieve by suspending the Agency notice issued to his bankers.
The Appellant further bitterly lamented and specifically pleaded instances between 2018 to September 2023 when the respondent unilaterally revised his returns on his I-Tax portal and saddled him with interest and penalties totalling Kshs.41,194,998.00 as indicated on the said portal as at 27 th September, 2023.
To his mind, the actions on his I-Tax portal did not amount to a valid tax decision on assessment by the Commissioner General in terms of PART VII of the Tax Procedures Act No 29 of 2015 , but out of abundance of caution, on 3 rd Ocotber, 2023 wrote to the respondent requesting the reversal of the entries made on his I-Tax portal and to be furnished with the reasons that informed the actions taken by the respondent together with relevant documents supporting the said actions. He noted that no response was made to the aforementioned letter by 3 rd October,2023, or at all.
As the Tax dispute raged on, he applied for his Tax Compliance certificate on 1 st November 2023, but his application was rejected on account of the outstanding tax dispute. On 2 nd November, 2023, he sent a reminder to the respondents to act on his letter of 3 rd October, 2023 and got no reply therefrom.
Exasperated by the obtaining circumstances, the appellant opted to file the 2 nd Judicial review Application, being Judicial review Application No E185 OF 2023, Nelson Andayi Havi Vrs Kenya Revenue Authority, and as the two judicial review applications were pending, the respondent revised his tax liability to Kshs.2,618,853.00 . He requested the respondent to allow him to pay for the same to enable him get his tax compliance certificate. Unfortunately, before an agreement could be reached on 15th January, 2024, the respondent engaged the reverse gear and slapped him with an additional tax assessment totalling Kshs.74,020,520.49 .
Considering the new position taken, he opted to await the outcome of Judicial review Application No E129 of 2023 and Judicial review Application No E185 of 2023 . In the meantime, he paid part of the sum of Kshs.2,618,853.00 and was issued with a Tax compliance certificate valid until 11 th March, 2025. A ruling on the judicial review Application was subsequently made on 25 th March, 2025, directing that his dispute with the respondent should be pursued by way of an appeal to the tax Appeal tribunal.
The Appellant was categorical that there was no justification for the respondent to ask him to pay excess tax in the manner demanded on 28 th August, 2023, the unilateral adjustments on his returns made on 6 th September, 2023, or the additional tax assessment made on 28 th September, 2023, but formally communicated to him on 15 th January, 2024 and urged the court to set aside all the said tax demands on grounds that they were unlawful.
The Appellant further pointed out that on 3rd October, 2024, the respondent had made an objection decision, where they had upheld his objection to the tax demand of 6 th April, 2021, and 21 st May, 2021 and dropped the entire tax demand of Kshs.12,900,959.40. This new development affirmed his position that the aforementioned tax issue had been resolved and was not due as decreed.
{ii} Respondents Pleadings
The respondent relied on their statement of facts dated 25 th April, 2025, together with the supporting documents filed therewith. They averred that pursuant to their statutory mandate, they did conduct investigations into the Appellants'' tax affairs due to his failure to declare income tax and VAT returns correctly. As part of the due process, they sought and received information and documents, which they reviewed in comparison to the undeclared withholding certificates and self-assessment records in the Appellants'' ledger.
Upon conclusion of this process, they established that the Appellants declared returns as per income tax returns compared against withholding certificates, turnovers, and VAT returns had unexplained variances, which they tabulated and proceeded to raise assessments as mandated under Section 31 of the Tax Procedures Act, 2015 . The said assessments were shared with the Appellant, and he was invited to provide extricating explanations, but he failed to do so within the thirty (30) day statutory timeline provided under Section 51 of the Tax Procedure Act . He was therefore to be blamed for the misfortune that befell him.
Having fully complied with the due process, and in compliance with Article 201(b),(i) of the Constitution of Kenya, 2010 , which provides that tax burden shall be shared fairly, they did on 28 th August, 2023, demand from the Appellant due tax arrears amounting to Kshs.17,081,968.63 comprising of income tax of Kshs 1,050,960.00 and value added tax of Kshs.16,031.007.75 for the period January 2015 to December 2020 and subsequently on 29 th August, 2023 issued agency notices to the Appellants bankers.
Turning to specific issues raised by the Appellant, that they ignored his documentation provided in support of his position and prior settlement resolutions reached during reconciliation meetings, the respondent, while affirming that indeed several correspondences were exchanged and meetings held, they had considered all of the said documents and the Appellant view of the whole matter, but still arrived at the conclusion that there was still variance between the grossed up amounts from the withholding certificates with what was declared for the assessed years of income.
Further, the respondent also pointed out that it was not bound by the appellants returns, information or self-assessment pursuant to provision of Section 24(2)of the Tax Procedure Act and also re-emphasized the provision of Section 17 of the Tax Procedures Act , which allowed the commissioner to carry out additional assessments based on the documentation under its custody and use their best judgment to come up with the tax payable. To that extent, the tax assessment/demand made was lawful.
The respondent also reiterated that the burden of proving that the tax assessment was wrongly done and/or if the Tax demand was excessive and therefore unjustified lay with the Appellant, under Section 108 of the Evidence Act, and Section 56 of the Tax Procedure Act . They noted that despite being handed ample opportunity, the Appellant had failed to discharge this burden.
Regarding the fact that they gave the Appellant his “ Tax Compliance Certificate ” before the tax dispute was resolved, the respondent clarified that the commission could issue the same if satisfied that the tax payer had complied with the tax law in respect of filing returns and has paid all the taxes due based on self-assessment and/or in the alternative had made arrangements with the commissioner to pay any tax due as provided under section 3 as read with sections 28 & 72 of the Tax Procedure Act, 2015 .
The Appellant had made a self-assessment totalling Kshs,618,849.91 on diverse dates between April 2016 and November 2023, and was allowed to process his tax compliance certificate based on arrangements to pay this sum.
Based on the foregoing it was clear that the assessment carried out was valid, the Appellant was informed why/how they had arrived at their decision, and having complied with due process, they could not be faulted for demanding tax arrears that were rightfully due from the Appellant. They thus urged the tribunal to uphold the same and proceed to dismiss the Appeal filed.
The Tax tribunal did consider the evidence presented, the parties'' submissions, and held that the Appellant did not file an objection to the tax decision made by the respondent on 3 rd February, 2021, and that the objections subsequently lodged by the Appellant on 21 st May and 6 th April, 2021, were time-barred.
The Tax tribunal further held that the Appellant did not object to the tax demands made vide the respondents'' letters dated 28 th August, 2023, 6 th September,2023, and 27 th September, 2023 and crowned it all by holding that the 8 Agency notice issued by the respondent were already suspended by the time the Appeal at the tribunal was filed and thus could not form a basis of an appeal.
Being dissatisfied with the said decision, the Appellant filed his memorandum of Appeal, where he raised the following grounds of Appeal, namely that:-
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant did not object to the tax demand for Kshs 12,900,959.40 made upon him on 3 rd February,2021, by the Respondent.
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant was not granted an extension of time within which to object to the tax demand of Kshs.12,900,959.40, when that fact was not an issue
The Tax Appeals Tribunal erred in fact and law in failing to hold that the Respondents'' failure to make an objection decision within 60 days in respect to the objection lodged by the Appellant on the tax demand of Kshs.12,900,959.40 deemed the objections as allowed.
The Tax Appeal tribunal erred in law in holding that the letter dated 22 nd April, 2022, from the Respondent to the Appellant was a tax decision.
The Tax Appeals Tribunal erred in law in holding that the Appellant ought to have lodged a tax objection by 22nd May, 2022, in response to the letter dated 22 nd April, 2022, from the Respondent.
The Tax Appeals Tribunal erred in law in holding that the letters dated 12 th May,2022, and 19 th July, 2022, from the Appellant to the Respondent were inconsequential as responses to the Respondent''s preliminary findings on tax investigations upon the Appellant.
The Tax Appeals Tribunal erred in law in holding that the letters dated 12 th May, 2022, and 19 th July, 2022, from the Appellant did not address the queries arising from the tax investigations on the Appellant as notified in the letter dated 22 nd April, 2022, from the Respondent.
The Tax Appeals Tribunal erred in fact in holding that the Appellant did not lodge a tax objection in respect to the tax demand for Kshs.17,081,968.63 made upon the Appellant by the Respondent on 28 th August, 2023.
The Tax Appeals Tribunal erred in fact and in law in holding that the 8 agency notices issued by the respondent in respect to the Appellant on 29 th August, 2023, were suspended and could not form a basis for an Appeal.
The Tax Appeals Tribunal disregarded the objection lodged by the Appellant on 31 st August, 2023, against the tax demand of Kshs.17,081,968.63 made upon the Appellant by the Respondent on 28 th August, 2023.
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant did not object to the Respondents'' tax assessment of Kshs.41,194,998.00 made upon the Appellant on 6 th September, 2023.
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant did not object to the Respondent''s tax assessment of Kshs74,020,520.49 made upon the Appellant on 27 th September, 2023.
The Tax Appeals Tribunal disregarded the objections lodged by the Appellant on 3 rd October, 2023, and 2 nd November,2023 against the tax assessment of Kshs.41,194,998.00 made on 6 th September, 2023, and Kshs.74,020,520.49 made upon the Appellant by the Respondent on 27 th September, 2023.
The Tax Appeals Tribunal deliberately ignored evidence in support of the appeal before it and disregarded the express provisions of the Tax Procedure Act, CAP 468B, and the case law in holding that the Appellant’s Appeal was incompetent.
The Appellant thus prayed that this Appeal be allowed, and the tribunal findings be set aside.
PARTIES SUBMISSIONS
{i} Appellants Submissions
The Appellant relied on his submissions dated 17 th June, 2025, and submitted that contrary to the respondents'' assertions, the Appeal filed raised poignant issues of law and undisputed facts, and pointed out the glaring and contradictory errors made by the tribunal in determining the same. Reliance was placed on the holdings in Bracegirdle Vs Oxley (2),(1974) 1 ALL ER 126, Attorney General Vr David Murakaru (1960) EA 484 & Patel Vs Uganda (1966) EA 311 .
The second issue raised was that the tribunal had erred in finding that he did not file an objection to the various tax decisions made by the respondent, to wit: -
With respect to the tax demand of 3 rd February,2021, he had objected to the same vide his response dated 21 st May,2021, and 6 th April, 2021
The preliminary finding of the respondent made on 22nd April,2022, was responded to vide his letters dated 12 th May, 2022, and 19 th July, 2022.
The decisions made by the respondent on 28 th and 29 th August, 2023 and 6 th and 27 th September, 2023 and 26 th October, 2023 were responded to by the appellant on 31 st August, 2023, 3 rd October, 2023 and 4 th October, 2023.
He emphasized that his responses to the respondents’ actions and decisions were tax objections and failure by the respondent to render decisions on all the objections in terms of Section 51 (4),(8),(9), and (11) of the Tax Procedure Act , deemed the objections as allowed. Reliance was placed in the case of Republic Vrs Kenya Revenue Authority, Ex Parte M-Kopa Kenya, Limited (2018) KEHC 9059 (KLR), and Vivo Energy Kenya Limited Vrs Commissioner of Customs & Border Control, Kenya Revenue Authority & Another (2020)EKLR , where similar conclusion had been arrived at.
The final issue raised by the Appellant was that the Tax tribunal had made a glaring error in determining that the five decisions made by the respondents dated 28 th and 29 th August, 2023, 6 th and 27 th September,2023, and 26 th October, 2023 were not appealable decisions. Intriguingly, before the High Court in Havi Vrs Kenya Revenue Authority (Judicial Review Application E129 of 2023), (2024) KEHC 3006 (KLR) , the respondent had argued that the said decisions were appealable tax decisions, that should have been challenged before the Tax tribunal as the first port of call. The high court, in its ruling delivered in the said matter, agreed with the respondent''s position and were therefore estopped from taking a different position in the matter.
The Appellant urged this court to find that the Tax Tribunal made erroneous findings in law, which were inconsistent with the facts not in dispute before it. Consequently, he urged the court to set aside the entire judgment of the Tribunal made on 12 th February, 2025, and allow his appeal arising therefrom dated 8 th April, 2025.
(ii) Respondents'' Submissions .
The respondent relied on their submission dated 20 th May 2025 and posited that the appeal lacked merit as the Tax Tribunal had rightly observed and held that they did not sight an appealable decision due to the Appellants'' failure to comply with the provision of Section 13(2) of the Tax Appeal Tribunal Act in filing his Appeal. Appellant had not filed any of his objections within the prescribed time, especially in relation to the tax demands of 2021 and 2023, and therefore could not benefit from his inaction. Reliance was placed in the case of Commissioner of Domestic Taxes Vrs Thuo ( Income Tax Appeal No E026 of 2022),{2024} & Achola Vrs Onyango ( Civil Application E041 of 2024),(2025)KECA 638 (KLR).
They also noted that the Appellant had claimed that he was granted an extension of time to object to the two tax demands dated 3 rd February 2021 and 22 nd April 2021, but failed to table the letter dated 12 th May 2021(extension of time letter) to support this contention. Guidance was placed in the case of Alfred Kioko Muteti Vrs Timothy Miheso & Another (2015) eKLR, where the case of Daniel Toroitich Arap Moi & Another Vrs Mwangi Stephen Murithi & Another (2004) KLR .
The respondents also urged this court to uphold the Tax tribunal finding that their jurisdiction could only be invoked where the tax Appeal was based on an, “appealable decision”, which includes an objection decision. Since no valid objections were lodged within the prescribed time, there was no objection decision to appeal against. Reliance was placed in Republic Vrs Kenya Revenue Authority; Ex partes: Krystalline salt Limited; Judicial Review Application No 359 of 2018 .
In light of the aforegoing, the respondent urged the court to dismiss the Appellants Appeal dated 8 th April, 2025 and uphold the judgment of the Tax Appeals Tribunal dated 12 th February 2025.
ANALYSIS AND DETERMINATION
In determining this Appeal, this court, exercising Appellate jurisdiction that is circumscribed by Section 56(2) of the Tax Procedure Act , which provides that, “ An appeal to the High Court or to the court of Appeal shall be on a question of law only ”. An appeal limited to matters of law does not permit the appellate court to substitute the tribunal''s decision with its own conclusions based on its own analysis and appreciation of the facts. In John Munuve Mati Vr The returning officer, Mwingi North Constituency & 2 others (2018) eKLR , what amounts to “matters of law” was described as:-
“ (38) The interpretation or construction of the constitution, statute, or regulations made thereunder or their application to the sets of facts established by the trial court. As far as facts are concerned, our engagement with them is limited to background and context, and to satisfy ourselves, when the issue is raised, whether the conclusions of the trial judge are based on the evidence on record or whether they are so perverse that no reasonable tribunal would have arrived at them. We cannot be drawn into consideration of the credibility of witnesses or which witnesses are more believable than others; by law, that is the province of the trial court.”
The demarcation of the parameters of appellate intervention on account of a question of law was also discussed in Bracegirdle v. Oxley (2) {1947} 1ALL ER 126, where it was held that:-
“The question whether a determination by a tribunal is a determination in point of fact or in point of law frequently occurs. On such a question there is one distinction that must always be kept in mind, namely, the distinction between primary facts and conclusions from those facts. Primary facts are facts which are observed by the witness and proved by testimony; conclusions from those facts are inferred deduced by a process of reasoning from them. The determination of primary facts is always a question of fact. It is essentially a matter for the tribunal who sees the witnesses to assess their credibility and to decide the primary facts which depend on them. The conclusion from those facts are sometimes conclusion of fact and sometimes conclusion of law. In a case under the Road Traffic Act, 1930,s 11, the question whether a speed is dangerous is a question of a degree, and a conclusion on a question of degree is a conclusion of fact. The court will only interfere if the conclusion cannot reasonably be drawn from the primary facts, and that is the case here. The conclusion drawn by these justices from the primary facts was not one that could reasonably be drawn from them .” (Emphasis added)
This Court has examined the Record of Appeal, the grounds of appeal, and given due consideration to the submissions by the parties’ respective Counsel. The appellant raised fourteen grounds of appeal, but the same can be compressed down to the following four (4) issues, which are determinative of all the issues raised;
Competency of the Appeal.
Whether the Appellant did object to the tax decision dated 3 rd February,2021 & 22 nd April,2022.
Whether the Tax decision made by the Respondents on 28 th and 29 th August, 2023, 6 th and 27 th September 2023, and 26 th October 2023 were appealable decisions, and if so, whether the Appellant lodged any objection against the same .
The objection decision dated 3rd October,2024,
Costs of the Appeal
(i) Competency of the Appeal filed.
In their statement of facts dated 29 th April,2025, and submissions dated 20 th May,2025, the respondent did assert that the entire appeal filed questioned the findings of fact by the tribunal, and therefore, the appeal as filed was incompetent and ripe for striking out.
The appeal questions the Tax Tribunal''s finding regarding;-
Statutory timelines as to when the appellant was supposed to lodge his objection,
The determination that the objection lodged did not amount to an objection as his letter lacked the elements of an objection as set out under Section 51(3) of the Tax Procedure Act; and
c) The contradictory findings of the Tribunal as to whether the decisions made by the Respondent on 28 th and 29 th August,2023, 6 th and 27 th September, 2023, and 26 th October, 2023 were appealable decisions, and whether the Appellant did not lodge an objection to the same.
In the opinion of this court, the issues raised touch on the interpretation or construction of the tax statute, regulations made thereunder, and their application to the sets of facts established by the trial court. A determination of the same amounts to a determination on “matters of law”. The Appeal filed is therefore competent.
(ii) Whether the Appellant did object to the tax decisions dated 3 rd February, 2021 & 22 nd April,2022.
On 3 rd February, 2021, the respondent raised a tax demand of Kshs.12,900,959.40 against the Appellant, which amount was inclusive of principal tax, penalties, and interest with respect to PAYE, Income tax, and VAT. The appellant formally objected to the said demand through his letter dated 6 th April, 2021, and his agent''s letter dated 21 st May,2021.
It was noted that in their letter of 21 st May,2021, that the Appellant''s tax agent made reference to a letter dated 12 th May 2021, through which the respondent had extended time for the Appellant to lodge his Appeal, but inexplicably, the said letter was not made available and was not part of the Appellant''s bundle of documents relied/filed during trial.
Before the resolution of the said tax demand, on 2 nd February, 2022, the Appellant was issued with a fresh “notice of tax investigations” from the respondent, and this culminated in a fresh demand issued vide the respondent''s letter dated 22 nd April, 2022, seeking a sum of Kshs.92,384,015.00 comprising of income Tax, VAT and additional VAT outstanding on his I-Tax ledger. To this demand, the Appellant filed his letter dated 12 th May, 2022, seeking an extension of time to challenge the tax demand issued.
The Appellants'' request was allowed by the Respondent, who, through their letter dated 6 th June,2022, granted the Appellant 60 days to file his objection with effective from 22 nd April, 2022. Accordingly, the new statutory deadline by which time the Appellant was to lodge his objection fell due on 22 nd June,2022.
Again, the appellant did not utilize this opportunity and filed his objection on 19 th July, 2022. The tribunal did consider the facts as outlined above and held that both objections filed against the two aforementioned tax demands were filed out of the timelines stipulated under Section 51(2) of the Tax Procedure Act , and were deemed irregular and time-barred. This position was wholly supported by the respondent in this Appeal, and they urged this court to uphold the tribunals findings on this issue.
The Appellant on the other hand, faulted the Tax tribunal''s findings on the basis that tribunal had jumped the gun, as the respondent had not determined that no objection had been validly lodged challenging the tax demand of 3 rd February, 2021 nor had they communicated any such determination to the Appellant within 14 days of his objection as required under Section 51(4) of the Tax Procedures Act .
Additionally, no decision allowing or disallowing the objection made by the Appellant, if any, was communicated to him within 60 days of his objection as required by Section 51(11) of the Tax Procedures Act , which obligated the respondent to communicate their decision even if the taxpayer had allegedly acted out of time. More fundamentally, the Appellant also urged the court to note that the question of whether the objections lodged on 6 th April,2021, and 21 st May,2021 were time-barred had not been raised by the respondent, and to that extent the tribunal had erred in determining an issue not pleaded.
As to whether the tribunal determined an issue not pleaded, this court reiterates that the common law position, that parties are bound by their pleadings and are not allowed to raise an issue not pleaded or call evidence on the same, with the exception being made in situations where even though the issue was not before the court, the parties were heard on the said issue. The main question usually is whether or not the appellant suffered any prejudice or injustice by the course that the proceedings took. See Odd Jobs vs. Mubia (1970), Mohammed Fugicha -vs- Methodist Church in Kenya (Suing through its registered trustees) & 3 Others [2016] eKLR Herman P. Steyn vs. Charles Thys [1997] KACA 395 (KLR) & Rawal V JSC (2016) KECA 534
Respectfully, though I do find and hold that the respondent did specifically raise the issue of timelines for filing an objection under Section 51 of the Tax Procedure Act in paragraph 15 of their statement of fact filed before the tribunal, Submissions were made by both parties in respect thereof, and the tribunal was rightfully seized of the matter and its determination made thereto lawful.
On the second issue raised, as to whether his objections were filed out of time and/or if the appellant first needed to respond to the said objection as mandatorily required under section 51(4) and 51(11) of the Tax Procedure Act, the court makes the following observation and determination.
Section 51 of the Tax Procedure Act, Cap 469B provides that;
“(1) A taxpayer who wishes to dispute a tax decision shall first lodge an objection against that tax decision under this section before proceeding under any other written law.
(2) A taxpayer who disputes a tax decision may lodge a notice of objecti
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REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
MILLIMANI COMMERCIAL & TAX DIVISION
TAX APPEAL NO. E044 OF 2025
NELSON ANDAYI HAVI T/A
HAVI & COMPANY ADVOCATES………………………… APPELLANT
VERSUS
COMMISSIONER - GENERAL
KENYA REVENUE AUTHORITY…………….…..……..RESPONDENT
(Being an appeal from the judgment of the Tax Appeals Tribunal, delivered on 12 th February 2025, in Tax Appeals Tribunal Appeal No E345 of 2024)
Arising From
NELSON ANDAYI HAVI T/A
HAVI & COMPANY ADVOCATES…………………..…… APPELLANT
VERSUS
COMMISSIONER -GENERAL
KENYA REVENUE AUTHORITY………………………..RESPONDENT
JUDGMENT
INTRODUCTION
This appeal arises from the judgment/decree of the Tax Appeals Tribunal dated 12.02.2025, where the said tribunal held that the Appellant did not file an objection to the tax decision made by the respondent on 03.02.2021, and his subsequent objections lodged on 21.05.2021 and 06.04.2021 were time-barred.
The tribunal further held that the Appellant did not object to the preliminary findings made by the respondent on 22.04.2022 and that his responses, made on 12.05.2022 and 19.07.2022, lacked elements of an objection as set out under Section 51(3) of the Tax Procedures Act, Cap 469B, Laws of Kenya.
Finally, the tribunal also held that the demand made by the respondent to the Appellant on 28 th August, 2023, the agency notices issued by the respondent in respect to the Appellants accounts on 29 th August, 2023, adjustments made on the Appellants I-Tax portal on 6 th and 27 th September, 2023 and their refusal to issue the appellant with a Tax compliance certificate on 26 th October, 2023 ( hereinafter collectively referred to as the respondents five decision’s) were all not appealable decision’s for purposes of Section 3 of the Tax Appeals Procedures Act , Cap 469B laws of Kenya. Based on the foregoing, the Tribunal held that it lacked jurisdiction to handle the Appeal filed and proceeded to strike it out. Each party was to bear their own costs.
CASE BACKGROUND & PLEADINGS.
Appellants pleadings
The Appellant relied on his statement of facts dated 25 th March, 2024, together with the supporting documents attached thereto. He averred that on 28 th August, 2023, the respondent demanded from him tax arrears totalling Kshs.17,081,968.63 , comprising Income Tax of Kshs.1,050,960.88 for the period January 2015 to December 2020 and Value Added Tax of Kshs.16,031,007.75 for the period April 2016 to July 2023. Subsequently, on 29 th August 2023, the respondent issued agency notices to all his bankers, demanding tax arrears as aforementioned.
It was his contention that the tax demand of Kshs.17,081,986.63 was made in disregard of various correspondences exchanged and prior settlements reached by the parties herein. He further noted that, within the period of 3 rd February, 2021 to 27 th February, 2023 the respondent had made contradictory tax demand upon him, namely;
Kshs.12,900,559.40 on 3 rd February, 2021
Kshs.92,384.00 on 22 nd April, 2022 and
Kshs.8,963,204.20 on 13 th February, 2023
He had demanded a clarification to clear the air on these contradictory demands, but none was offered. His deduction, therefore, was that any revenue officer assigned to handle his tax file would ignore all the previous settlements made or arrived at, and would proceed as though it were a fresh investigation. To that extent, the respondents'' demands were unreasonable, unjustified, and logically should have been removed and/or rectified on his I-Tax portal.
Arising from the demands of 28 th August, 2023, and Agency notices issued on 29 th August, 2023, the Appellant did respond to the said letters through his letter dated 31 st August, 2023, and also opted file Judicial Review Application No. E129 of 2023, Nelson Andayi Havi Vrs Kenya Revenue Authority, challenging the unlawful demands and closure of his Bank accounts. Before the said judicial review Application was heard, the Respondent did give him a reprieve by suspending the Agency notice issued to his bankers.
The Appellant further bitterly lamented and specifically pleaded instances between 2018 to September 2023 when the respondent unilaterally revised his returns on his I-Tax portal and saddled him with interest and penalties totalling Kshs.41,194,998.00 as indicated on the said portal as at 27 th September, 2023.
To his mind, the actions on his I-Tax portal did not amount to a valid tax decision on assessment by the Commissioner General in terms of PART VII of the Tax Procedures Act No 29 of 2015 , but out of abundance of caution, on 3 rd Ocotber, 2023 wrote to the respondent requesting the reversal of the entries made on his I-Tax portal and to be furnished with the reasons that informed the actions taken by the respondent together with relevant documents supporting the said actions. He noted that no response was made to the aforementioned letter by 3 rd October,2023, or at all.
As the Tax dispute raged on, he applied for his Tax Compliance certificate on 1 st November 2023, but his application was rejected on account of the outstanding tax dispute. On 2 nd November, 2023, he sent a reminder to the respondents to act on his letter of 3 rd October, 2023 and got no reply therefrom.
Exasperated by the obtaining circumstances, the appellant opted to file the 2 nd Judicial review Application, being Judicial review Application No E185 OF 2023, Nelson Andayi Havi Vrs Kenya Revenue Authority, and as the two judicial review applications were pending, the respondent revised his tax liability to Kshs.2,618,853.00 . He requested the respondent to allow him to pay for the same to enable him get his tax compliance certificate. Unfortunately, before an agreement could be reached on 15th January, 2024, the respondent engaged the reverse gear and slapped him with an additional tax assessment totalling Kshs.74,020,520.49 .
Considering the new position taken, he opted to await the outcome of Judicial review Application No E129 of 2023 and Judicial review Application No E185 of 2023 . In the meantime, he paid part of the sum of Kshs.2,618,853.00 and was issued with a Tax compliance certificate valid until 11 th March, 2025. A ruling on the judicial review Application was subsequently made on 25 th March, 2025, directing that his dispute with the respondent should be pursued by way of an appeal to the tax Appeal tribunal.
The Appellant was categorical that there was no justification for the respondent to ask him to pay excess tax in the manner demanded on 28 th August, 2023, the unilateral adjustments on his returns made on 6 th September, 2023, or the additional tax assessment made on 28 th September, 2023, but formally communicated to him on 15 th January, 2024 and urged the court to set aside all the said tax demands on grounds that they were unlawful.
The Appellant further pointed out that on 3rd October, 2024, the respondent had made an objection decision, where they had upheld his objection to the tax demand of 6 th April, 2021, and 21 st May, 2021 and dropped the entire tax demand of Kshs.12,900,959.40. This new development affirmed his position that the aforementioned tax issue had been resolved and was not due as decreed.
{ii} Respondents Pleadings
The respondent relied on their statement of facts dated 25 th April, 2025, together with the supporting documents filed therewith. They averred that pursuant to their statutory mandate, they did conduct investigations into the Appellants'' tax affairs due to his failure to declare income tax and VAT returns correctly. As part of the due process, they sought and received information and documents, which they reviewed in comparison to the undeclared withholding certificates and self-assessment records in the Appellants'' ledger.
Upon conclusion of this process, they established that the Appellants declared returns as per income tax returns compared against withholding certificates, turnovers, and VAT returns had unexplained variances, which they tabulated and proceeded to raise assessments as mandated under Section 31 of the Tax Procedures Act, 2015 . The said assessments were shared with the Appellant, and he was invited to provide extricating explanations, but he failed to do so within the thirty (30) day statutory timeline provided under Section 51 of the Tax Procedure Act . He was therefore to be blamed for the misfortune that befell him.
Having fully complied with the due process, and in compliance with Article 201(b),(i) of the Constitution of Kenya, 2010 , which provides that tax burden shall be shared fairly, they did on 28 th August, 2023, demand from the Appellant due tax arrears amounting to Kshs.17,081,968.63 comprising of income tax of Kshs 1,050,960.00 and value added tax of Kshs.16,031.007.75 for the period January 2015 to December 2020 and subsequently on 29 th August, 2023 issued agency notices to the Appellants bankers.
Turning to specific issues raised by the Appellant, that they ignored his documentation provided in support of his position and prior settlement resolutions reached during reconciliation meetings, the respondent, while affirming that indeed several correspondences were exchanged and meetings held, they had considered all of the said documents and the Appellant view of the whole matter, but still arrived at the conclusion that there was still variance between the grossed up amounts from the withholding certificates with what was declared for the assessed years of income.
Further, the respondent also pointed out that it was not bound by the appellants returns, information or self-assessment pursuant to provision of Section 24(2)of the Tax Procedure Act and also re-emphasized the provision of Section 17 of the Tax Procedures Act , which allowed the commissioner to carry out additional assessments based on the documentation under its custody and use their best judgment to come up with the tax payable. To that extent, the tax assessment/demand made was lawful.
The respondent also reiterated that the burden of proving that the tax assessment was wrongly done and/or if the Tax demand was excessive and therefore unjustified lay with the Appellant, under Section 108 of the Evidence Act, and Section 56 of the Tax Procedure Act . They noted that despite being handed ample opportunity, the Appellant had failed to discharge this burden.
Regarding the fact that they gave the Appellant his “ Tax Compliance Certificate ” before the tax dispute was resolved, the respondent clarified that the commission could issue the same if satisfied that the tax payer had complied with the tax law in respect of filing returns and has paid all the taxes due based on self-assessment and/or in the alternative had made arrangements with the commissioner to pay any tax due as provided under section 3 as read with sections 28 & 72 of the Tax Procedure Act, 2015 .
The Appellant had made a self-assessment totalling Kshs,618,849.91 on diverse dates between April 2016 and November 2023, and was allowed to process his tax compliance certificate based on arrangements to pay this sum.
Based on the foregoing it was clear that the assessment carried out was valid, the Appellant was informed why/how they had arrived at their decision, and having complied with due process, they could not be faulted for demanding tax arrears that were rightfully due from the Appellant. They thus urged the tribunal to uphold the same and proceed to dismiss the Appeal filed.
The Tax tribunal did consider the evidence presented, the parties'' submissions, and held that the Appellant did not file an objection to the tax decision made by the respondent on 3 rd February, 2021, and that the objections subsequently lodged by the Appellant on 21 st May and 6 th April, 2021, were time-barred.
The Tax tribunal further held that the Appellant did not object to the tax demands made vide the respondents'' letters dated 28 th August, 2023, 6 th September,2023, and 27 th September, 2023 and crowned it all by holding that the 8 Agency notice issued by the respondent were already suspended by the time the Appeal at the tribunal was filed and thus could not form a basis of an appeal.
Being dissatisfied with the said decision, the Appellant filed his memorandum of Appeal, where he raised the following grounds of Appeal, namely that:-
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant did not object to the tax demand for Kshs 12,900,959.40 made upon him on 3 rd February,2021, by the Respondent.
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant was not granted an extension of time within which to object to the tax demand of Kshs.12,900,959.40, when that fact was not an issue
The Tax Appeals Tribunal erred in fact and law in failing to hold that the Respondents'' failure to make an objection decision within 60 days in respect to the objection lodged by the Appellant on the tax demand of Kshs.12,900,959.40 deemed the objections as allowed.
The Tax Appeal tribunal erred in law in holding that the letter dated 22 nd April, 2022, from the Respondent to the Appellant was a tax decision.
The Tax Appeals Tribunal erred in law in holding that the Appellant ought to have lodged a tax objection by 22nd May, 2022, in response to the letter dated 22 nd April, 2022, from the Respondent.
The Tax Appeals Tribunal erred in law in holding that the letters dated 12 th May,2022, and 19 th July, 2022, from the Appellant to the Respondent were inconsequential as responses to the Respondent''s preliminary findings on tax investigations upon the Appellant.
The Tax Appeals Tribunal erred in law in holding that the letters dated 12 th May, 2022, and 19 th July, 2022, from the Appellant did not address the queries arising from the tax investigations on the Appellant as notified in the letter dated 22 nd April, 2022, from the Respondent.
The Tax Appeals Tribunal erred in fact in holding that the Appellant did not lodge a tax objection in respect to the tax demand for Kshs.17,081,968.63 made upon the Appellant by the Respondent on 28 th August, 2023.
The Tax Appeals Tribunal erred in fact and in law in holding that the 8 agency notices issued by the respondent in respect to the Appellant on 29 th August, 2023, were suspended and could not form a basis for an Appeal.
The Tax Appeals Tribunal disregarded the objection lodged by the Appellant on 31 st August, 2023, against the tax demand of Kshs.17,081,968.63 made upon the Appellant by the Respondent on 28 th August, 2023.
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant did not object to the Respondents'' tax assessment of Kshs.41,194,998.00 made upon the Appellant on 6 th September, 2023.
The Tax Appeals Tribunal erred in fact and law in holding that the Appellant did not object to the Respondent''s tax assessment of Kshs74,020,520.49 made upon the Appellant on 27 th September, 2023.
The Tax Appeals Tribunal disregarded the objections lodged by the Appellant on 3 rd October, 2023, and 2 nd November,2023 against the tax assessment of Kshs.41,194,998.00 made on 6 th September, 2023, and Kshs.74,020,520.49 made upon the Appellant by the Respondent on 27 th September, 2023.
The Tax Appeals Tribunal deliberately ignored evidence in support of the appeal before it and disregarded the express provisions of the Tax Procedure Act, CAP 468B, and the case law in holding that the Appellant’s Appeal was incompetent.
The Appellant thus prayed that this Appeal be allowed, and the tribunal findings be set aside.
PARTIES SUBMISSIONS
{i} Appellants Submissions
The Appellant relied on his submissions dated 17 th June, 2025, and submitted that contrary to the respondents'' assertions, the Appeal filed raised poignant issues of law and undisputed facts, and pointed out the glaring and contradictory errors made by the tribunal in determining the same. Reliance was placed on the holdings in Bracegirdle Vs Oxley (2),(1974) 1 ALL ER 126, Attorney General Vr David Murakaru (1960) EA 484 & Patel Vs Uganda (1966) EA 311 .
The second issue raised was that the tribunal had erred in finding that he did not file an objection to the various tax decisions made by the respondent, to wit: -
With respect to the tax demand of 3 rd February,2021, he had objected to the same vide his response dated 21 st May,2021, and 6 th April, 2021
The preliminary finding of the respondent made on 22nd April,2022, was responded to vide his letters dated 12 th May, 2022, and 19 th July, 2022.
The decisions made by the respondent on 28 th and 29 th August, 2023 and 6 th and 27 th September, 2023 and 26 th October, 2023 were responded to by the appellant on 31 st August, 2023, 3 rd October, 2023 and 4 th October, 2023.
He emphasized that his responses to the respondents’ actions and decisions were tax objections and failure by the respondent to render decisions on all the objections in terms of Section 51 (4),(8),(9), and (11) of the Tax Procedure Act , deemed the objections as allowed. Reliance was placed in the case of Republic Vrs Kenya Revenue Authority, Ex Parte M-Kopa Kenya, Limited (2018) KEHC 9059 (KLR), and Vivo Energy Kenya Limited Vrs Commissioner of Customs & Border Control, Kenya Revenue Authority & Another (2020)EKLR , where similar conclusion had been arrived at.
The final issue raised by the Appellant was that the Tax tribunal had made a glaring error in determining that the five decisions made by the respondents dated 28 th and 29 th August, 2023, 6 th and 27 th September,2023, and 26 th October, 2023 were not appealable decisions. Intriguingly, before the High Court in Havi Vrs Kenya Revenue Authority (Judicial Review Application E129 of 2023), (2024) KEHC 3006 (KLR) , the respondent had argued that the said decisions were appealable tax decisions, that should have been challenged before the Tax tribunal as the first port of call. The high court, in its ruling delivered in the said matter, agreed with the respondent''s position and were therefore estopped from taking a different position in the matter.
The Appellant urged this court to find that the Tax Tribunal made erroneous findings in law, which were inconsistent with the facts not in dispute before it. Consequently, he urged the court to set aside the entire judgment of the Tribunal made on 12 th February, 2025, and allow his appeal arising therefrom dated 8 th April, 2025.
(ii) Respondents'' Submissions .
The respondent relied on their submission dated 20 th May 2025 and posited that the appeal lacked merit as the Tax Tribunal had rightly observed and held that they did not sight an appealable decision due to the Appellants'' failure to comply with the provision of Section 13(2) of the Tax Appeal Tribunal Act in filing his Appeal. Appellant had not filed any of his objections within the prescribed time, especially in relation to the tax demands of 2021 and 2023, and therefore could not benefit from his inaction. Reliance was placed in the case of Commissioner of Domestic Taxes Vrs Thuo ( Income Tax Appeal No E026 of 2022),{2024} & Achola Vrs Onyango ( Civil Application E041 of 2024),(2025)KECA 638 (KLR).
They also noted that the Appellant had claimed that he was granted an extension of time to object to the two tax demands dated 3 rd February 2021 and 22 nd April 2021, but failed to table the letter dated 12 th May 2021(extension of time letter) to support this contention. Guidance was placed in the case of Alfred Kioko Muteti Vrs Timothy Miheso & Another (2015) eKLR, where the case of Daniel Toroitich Arap Moi & Another Vrs Mwangi Stephen Murithi & Another (2004) KLR .
The respondents also urged this court to uphold the Tax tribunal finding that their jurisdiction could only be invoked where the tax Appeal was based on an, “appealable decision”, which includes an objection decision. Since no valid objections were lodged within the prescribed time, there was no objection decision to appeal against. Reliance was placed in Republic Vrs Kenya Revenue Authority; Ex partes: Krystalline salt Limited; Judicial Review Application No 359 of 2018 .
In light of the aforegoing, the respondent urged the court to dismiss the Appellants Appeal dated 8 th April, 2025 and uphold the judgment of the Tax Appeals Tribunal dated 12 th February 2025.
ANALYSIS AND DETERMINATION
In determining this Appeal, this court, exercising Appellate jurisdiction that is circumscribed by Section 56(2) of the Tax Procedure Act , which provides that, “ An appeal to the High Court or to the court of Appeal shall be on a question of law only ”. An appeal limited to matters of law does not permit the appellate court to substitute the tribunal''s decision with its own conclusions based on its own analysis and appreciation of the facts. In John Munuve Mati Vr The returning officer, Mwingi North Constituency & 2 others (2018) eKLR , what amounts to “matters of law” was described as:-
“ (38) The interpretation or construction of the constitution, statute, or regulations made thereunder or their application to the sets of facts established by the trial court. As far as facts are concerned, our engagement with them is limited to background and context, and to satisfy ourselves, when the issue is raised, whether the conclusions of the trial judge are based on the evidence on record or whether they are so perverse that no reasonable tribunal would have arrived at them. We cannot be drawn into consideration of the credibility of witnesses or which witnesses are more believable than others; by law, that is the province of the trial court.”
The demarcation of the parameters of appellate intervention on account of a question of law was also discussed in Bracegirdle v. Oxley (2) {1947} 1ALL ER 126, where it was held that:-
“The question whether a determination by a tribunal is a determination in point of fact or in point of law frequently occurs. On such a question there is one distinction that must always be kept in mind, namely, the distinction between primary facts and conclusions from those facts. Primary facts are facts which are observed by the witness and proved by testimony; conclusions from those facts are inferred deduced by a process of reasoning from them. The determination of primary facts is always a question of fact. It is essentially a matter for the tribunal who sees the witnesses to assess their credibility and to decide the primary facts which depend on them. The conclusion from those facts are sometimes conclusion of fact and sometimes conclusion of law. In a case under the Road Traffic Act, 1930,s 11, the question whether a speed is dangerous is a question of a degree, and a conclusion on a question of degree is a conclusion of fact. The court will only interfere if the conclusion cannot reasonably be drawn from the primary facts, and that is the case here. The conclusion drawn by these justices from the primary facts was not one that could reasonably be drawn from them .” (Emphasis added)
This Court has examined the Record of Appeal, the grounds of appeal, and given due consideration to the submissions by the parties’ respective Counsel. The appellant raised fourteen grounds of appeal, but the same can be compressed down to the following four (4) issues, which are determinative of all the issues raised;
Competency of the Appeal.
Whether the Appellant did object to the tax decision dated 3 rd February,2021 & 22 nd April,2022.
Whether the Tax decision made by the Respondents on 28 th and 29 th August, 2023, 6 th and 27 th September 2023, and 26 th October 2023 were appealable decisions, and if so, whether the Appellant lodged any objection against the same .
The objection decision dated 3rd October,2024,
Costs of the Appeal
(i) Competency of the Appeal filed.
In their statement of facts dated 29 th April,2025, and submissions dated 20 th May,2025, the respondent did assert that the entire appeal filed questioned the findings of fact by the tribunal, and therefore, the appeal as filed was incompetent and ripe for striking out.
The appeal questions the Tax Tribunal''s finding regarding;-
Statutory timelines as to when the appellant was supposed to lodge his objection,
The determination that the objection lodged did not amount to an objection as his letter lacked the elements of an objection as set out under Section 51(3) of the Tax Procedure Act; and
c) The contradictory findings of the Tribunal as to whether the decisions made by the Respondent on 28 th and 29 th August,2023, 6 th and 27 th September, 2023, and 26 th October, 2023 were appealable decisions, and whether the Appellant did not lodge an objection to the same.
In the opinion of this court, the issues raised touch on the interpretation or construction of the tax statute, regulations made thereunder, and their application to the sets of facts established by the trial court. A determination of the same amounts to a determination on “matters of law”. The Appeal filed is therefore competent.
(ii) Whether the Appellant did object to the tax decisions dated 3 rd February, 2021 & 22 nd April,2022.
On 3 rd February, 2021, the respondent raised a tax demand of Kshs.12,900,959.40 against the Appellant, which amount was inclusive of principal tax, penalties, and interest with respect to PAYE, Income tax, and VAT. The appellant formally objected to the said demand through his letter dated 6 th April, 2021, and his agent''s letter dated 21 st May,2021.
It was noted that in their letter of 21 st May,2021, that the Appellant''s tax agent made reference to a letter dated 12 th May 2021, through which the respondent had extended time for the Appellant to lodge his Appeal, but inexplicably, the said letter was not made available and was not part of the Appellant''s bundle of documents relied/filed during trial.
Before the resolution of the said tax demand, on 2 nd February, 2022, the Appellant was issued with a fresh “notice of tax investigations” from the respondent, and this culminated in a fresh demand issued vide the respondent''s letter dated 22 nd April, 2022, seeking a sum of Kshs.92,384,015.00 comprising of income Tax, VAT and additional VAT outstanding on his I-Tax ledger. To this demand, the Appellant filed his letter dated 12 th May, 2022, seeking an extension of time to challenge the tax demand issued.
The Appellants'' request was allowed by the Respondent, who, through their letter dated 6 th June,2022, granted the Appellant 60 days to file his objection with effective from 22 nd April, 2022. Accordingly, the new statutory deadline by which time the Appellant was to lodge his objection fell due on 22 nd June,2022.
Again, the appellant did not utilize this opportunity and filed his objection on 19 th July, 2022. The tribunal did consider the facts as outlined above and held that both objections filed against the two aforementioned tax demands were filed out of the timelines stipulated under Section 51(2) of the Tax Procedure Act , and were deemed irregular and time-barred. This position was wholly supported by the respondent in this Appeal, and they urged this court to uphold the tribunals findings on this issue.
The Appellant on the other hand, faulted the Tax tribunal''s findings on the basis that tribunal had jumped the gun, as the respondent had not determined that no objection had been validly lodged challenging the tax demand of 3 rd February, 2021 nor had they communicated any such determination to the Appellant within 14 days of his objection as required under Section 51(4) of the Tax Procedures Act .
Additionally, no decision allowing or disallowing the objection made by the Appellant, if any, was communicated to him within 60 days of his objection as required by Section 51(11) of the Tax Procedures Act , which obligated the respondent to communicate their decision even if the taxpayer had allegedly acted out of time. More fundamentally, the Appellant also urged the court to note that the question of whether the objections lodged on 6 th April,2021, and 21 st May,2021 were time-barred had not been raised by the respondent, and to that extent the tribunal had erred in determining an issue not pleaded.
As to whether the tribunal determined an issue not pleaded, this court reiterates that the common law position, that parties are bound by their pleadings and are not allowed to raise an issue not pleaded or call evidence on the same, with the exception being made in situations where even though the issue was not before the court, the parties were heard on the said issue. The main question usually is whether or not the appellant suffered any prejudice or injustice by the course that the proceedings took. See Odd Jobs vs. Mubia (1970), Mohammed Fugicha -vs- Methodist Church in Kenya (Suing through its registered trustees) & 3 Others [2016] eKLR Herman P. Steyn vs. Charles Thys [1997] KACA 395 (KLR) & Rawal V JSC (2016) KECA 534
Respectfully, though I do find and hold that the respondent did specifically raise the issue of timelines for filing an objection under Section 51 of the Tax Procedure Act in paragraph 15 of their statement of fact filed before the tribunal, Submissions were made by both parties in respect thereof, and the tribunal was rightfully seized of the matter and its determination made thereto lawful.
On the second issue raised, as to whether his objections were filed out of time and/or if the appellant first needed to respond to the said objection as mandatorily required under section 51(4) and 51(11) of the Tax Procedure Act, the court makes the following observation and determination.
Section 51 of the Tax Procedure Act, Cap 469B provides that;
“(1) A taxpayer who wishes to dispute a tax decision shall first lodge an objection against that tax decision under this section before proceeding under any other written law.
(2) A taxpayer who disputes a tax decision may lodge a notice of objecti
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