1. The Appellant is a limited liability company incorporated in Kenya engaged in the brewing business, while the Respondent is a principal officer appointed under section 13 of the Kenya Revenue Authority Act 1995.
2. The Appellant on 19th May 2022 applied for excise stamps through the iTax system. To process the application, the Respondent requested the Appellant to provide a reconciled summary of the usage of the stamps previously issued to the Appellant by the Respondent.
3. From the reconciliation provided by the Appellant, the Respondent noted that there had been an under-declaration of the taxes payable by the Appellant. The under-declaration, according to the Respondent, was occasioned by among others, the Appellant’s action of erroneously claiming excise duty remission despite the fact that no remission had been granted to the Appellant by the Cabinet Secretary as required under Legal Notice No. 52 of 2017 - Excise Duty (Remission of Excise Duty) regulations 2017.
4. Consequently, the Respondent, on 23rd August 2022, issued against the Appellant a tax assessment in the sum of Kshs. 328,456,412.33, being the taxes under-declared by the Appellant.
5. The Appellant objected to the assessments vide its letter dated 29/8/2022. The Respondent vide its Objection Decision of 28th October 2022 confirmed taxes in the sum of Kshs. 249, 583,565, thereby partially allowing the Appellant’s objection.
6. Dissatisfied with the Respondent’s Objection Decision, the Appellant herein filed an appeal against the same at the Tax Appeals Tribunal (hereinafter the Tribunal). Upon consideration of the appeal, the Tribunal dismissed the appeal vide its decision of 23/02/2024.
7. Aggrieved by the decision of the Tribunal, the Appellant lodged an appeal to this Court against the whole of the said decision pursuant to Section 32 of the Tax Appeals Tribunal Act 2013 and Section 53 of the Tax Procedures Act 2015 on the following six (6) grounds of appeal: -
“1. THAT the Tribunal erred in law and fact by failing to give effect to the spirit of Legal Notice No. 52 of 2017 and find that the Appellant was entitled to remission of tax under Legal Notice No. 52 of 2017.
2. THAT the Tribunal erred in law and fact by failing to find the Appellant was compliant with Legal Notice No. 52 of 2017.
3. THAT the Tribunal erred in law and fact by failing to make a finding that the Respondent breached the Appellant’s rights to fair administrative action in not communicating the remission of tax application decision if any.
4. THAT the Tribunal erred in law and fact by failing to make a finding that the Respondent did an inspection on the Appellant from time to time and never made any objections.
5. THAT the Tribunal erred in law and fact by not considering the Respondent was under obligation to communicate the decision as to Appellant’s application for remission of tax under Legal Notice No. 52 of 2017.
6. THAT the Tribunal erred in law and fact by ignoring the submissions and documents of the Appellant evidencing the communications and subsequent inspection by the Respondent.”
8. In opposition to the appeal, the Respondent filed a Statement of Facts (SoF) dated 11/9/2024. The Respondent in the said SoF contended that the Tribunal did not err in its finding that the additional assessments were justified and that the Respondent had not violated the Appellant’s right to fair administrative action.
9. In response to the memorandum of appeal, the Respondent argued that under Legal Notice No. 52 of 2017, the authority to approve applications for excise duty remission lay solely with the Cabinet Secretary. According to the Respondent, it had not been assigned any role under this legal notice and therefore could not be held responsible for the Appellant’s failure to secure the necessary approval for remission.
10. Additionally, the Respondent maintained that the Tribunal correctly found that the Appellant could not claim duty remission without first obtaining approval from the Cabinet Secretary as required by the law.
11. The Respondent also rejected the allegation by the Appellant that the Tribunal failed to consider its relevant documents. The Respondent maintained that the Tribunal had acknowledged the Appellant’s application, but found no evidence of a positive response or approval from the Cabinet Secretary.
12. Consequently, the Respondent supported the Tribunal’s conclusion that the Appellant could not rely on the remission without proof of such approval.
13. The Respondent emphasized that under section 56 of the Tax Procedures Act as well as under section 30 of the Tax Appeals Tribunals Act, the burden was on the Appellant to prove the assessment was excessive or the tax decision improper. The Respondent asserted that the Appellant failed to discharge this burden.
14. Finally, the Respondent’s position that the Tribunal’s decision was reasoned and justified, as it considered the pleadings and submissions of both parties. The Respondent therefore urged this court to uphold the Tribunal’s judgment and to dismiss the Appellant’s appeal with costs, describing it as frivolous and an abuse of court process.
15. The Application was canvassed by way of written submissions. The Respondent filed its submissions dated 11th September 2024, generally restating the grounds in its SoF, which I need not reproduce here.
16. The Appellant, on its part, did not initially file its submission within the timelines which had been given by the Court. However, vide leave of this court granted on 28th May 2025, the Appellant filed its submissions on the same day.
17. In its submissions, the Appellant submitted that it was deprived of its right to fair administrative action and legitimate expectation. According to the Appellant, it had vide its application dated 30th April 2017 made an application for remission under Legal Notice No. 52 of 2017 to the Cabinet Secretary, and that the Cabinet Secretary by his later dated 25th May 2017, asked the Respondent to review the Appellant’s application to allow processing of the application for remission.
18. The Appellant submitted that despite the Respondent visiting their premises and reviewing their processes, the Respondent failed to provide any response to the Appellant on the outcome of the process review to aid the grant of the remission. Consequently, the Appellant submitted, the Respondent’s action violated the Appellant’s rights as guaranteed under Article 47 of the Constitution as fortified under Sections 4(1), 4(2), and 6 of the Fair Administrative Action Act.
19. The Appellant maintained that the Tribunal erred in failing to find that the Appellant’s rights were violated by the Respondent’s failure to respond to the letter from the Cabinet Secretary (Finance), on the Appellant’s application for excise duty remission.
20. The Appellant therefore urged this court to set aside the judgment by the Tribunal, allow the appeal and issue a declaration that the Respondent breached the Appellant’s right to Fair Administrative Action by failing to advise and communicate its findings with the Appellant and/or the Cabinet Secretary.
21. The Appellant also seeks an order of declaration that the Appellant is compliant with Legal Notice No. 52 of 2017 and is entitled to remission of tax of 80 percent, with the result that the Respondent’s Assessment of Kshs. 249,583,565.00 on the Appellant be vacated.
Analysis and determination:
22. This being a first appeal, this court is under a duty to re-evaluate and assess the evidence and make its own conclusions, but keeping in mind that, unlike the trial court, this court had no advantage of observing the demeanour of the witnesses and hearing their evidence firsthand. In the case of Mbogo and Another vs. Shah [1968] EA 93 the Court stated:
“…that this Court will not interfere with the exercise of judicial discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which is should not have acted or because it failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.”
23. Again, the Court of Appeal for Eastern Africa in Pandya -vs- Republic [1957] EA 336 is as follows: -
“On a first appeal from a conviction by a Judge or magistrate sitting without a jury the appellant is entitled to have the appellate court’s own consideration and views of the evidence as a whole and its own decision thereon. It has the duty to rehear the case and reconsider the witnesses before the Judge or magistrate with such other material as it may have decided to admit. The appellate court must then make up its own mind not disregarding the judgment appealed from but carefully weighing and considering it. When the question arises which witness is to be believed rather than another and that question turns on manner and demeanor, the appellate court must be guided by the impression made on the Judge or magistrate who saw the witness but there may be other circumstances, quite apart from manner and demeanor which may show whether a statement is credible or not which may warrant a court different.”
24. This is an appeal from the Tax Appeals Tribunal to this court pursuant to Section 32 of the Tax Appeals Tribunal Act (Cap. 469A), which provides that appeals from the Tribunal lies with the High Court and that the rules applicable in the High Court are those set out by the Chief Justice.
“32. Appeals to the High Court on decisions of the Tribunal
(1) A party to proceedings before the Tribunal may, within thirty days after being notified of the decision or within such further period as the High Court may allow, appeal to the High Court, and the party so appealing shall serve a copy of the notice of appeal on the other party.
(2) The High Court shall hear appeals made under this section in accordance with rules set out by the Chief Justice.”
25. It is critical to note that Section 32 of the Tax Appeals Tribunal Act, as read together with the Tax Appeals Tribunal (Appeals to the High Court) Rules, does not restrict appeals from the Tribunal to be on issues of law only. It therefore means that in appeals from the Tribunal, this court has the power to interrogate both factual and legal findings of the Tribunal.
26. I have carefully reviewed and considered the Appellant’s memorandum of appeal filed herein, the record of appeal dated 30th September 2024, and the parties' pleadings and submissions filed in support of their respective positions. I am of the view that the only issue for determination in this appeal is the question of whether the Tribunal erred in upholding the Respondent's assessment.
27. A background of this matter is that on 19/5/2022, the Appellant applied for excise stamps via the iTax platform. Upon receiving the application, the Respondent requested a reconciled summary of stamp usage from the Appellant. After reviewing the reconciliation, the Respondent indicated an additional principal tax liability amounting to Kshs. 328,456,412.33.
28. Subsequently, on 23/8/2022, the Respondent issued an additional assessment based on discrepancies observed between the excise stamps issued and used, and the excise duty declared in the Appellant's monthly returns.
29. The Appellant objected to the assessment, arguing that it had applied for an 80 percent remission under Legal Notice No. 52 of 2015 and had been paying excise duty after factoring in this remission. The Appellant also claimed that the Respondent had inspected its premises but had not communicated any updated findings.
30. However, the Respondent noted that the Appellant had not obtained the required approval for the remission and therefore rejected the objection. The Respondent upheld the assessment, revising the principal tax due to Kshs. 249,583,565.00.
31. The Appellant filed an appeal against the Respondent’s objection decision before the Tribunal. Upon due consideration of the appeal before it, the Tribunal dismissed the appeal and found that the Appellant did not adduce any evidence in support of their contention that the Cabinet Secretary approved its application requesting to apply 80 percent remission for excise duty.
32. Legal Notice No.52 of 2017; Excise Duty (Remission of Excise Duty) Regulations 2017 provides as follows: -
“2(1) The CABINET SECRETARY may on application by a manufacturer, grant the remission of excise duty at eight percentum with respect to beer made from sorghum, millet or cassava or any other agricultural produce grown in Kenya.
2 (2) This regulation shall not apply in respect of beer made from barley.”
33. From the above provision, it is evident that it is only the Cabinet Secretary who has the legal authority to grant excise duty remission.
34. I have perused the record and note that at no point did the Appellant provide any proof, either before the Respondent or the Tribunal, that it had been granted excise duty remission by the Cabinet Secretary as required under the law.
35. Although the record indicates that the Appellant initiated the process of obtaining the remission, there is no proof of positive feedback from the Cabinet Secretary.
36. In the case of Mount Kenya Bottlers Limited & 3others v Attorney General & 3 Others 2012 eKLR, Lenaola J (as he then was) held:-
“Whether the taxation imposed is unfair, harsh or inequitable cannot be the reason for holding that it should not be imposed. It is the duty of the state to impose taxation and it is the duty of subjects to pay such taxes as are so imposed.”
37. Based on the above, I agree therefore with the finding of the Tribunal that the Appellant could not purport to enjoy the duty remission at 80 percent under the Legal Notice without the approval of the Cabinet Secretary.
38. This Court having come to the conclusion that it was not the mandate of the Respondent to grant such an approval, it is therefore equally my finding that the Tribunal did not err in its decision dated 23rd February 2024. The same is therefore upheld, with a finding that the Respondent’s Objection Decision of 28th October 2022 in the sum of Kshs. 249, 583,565, was in law justified.
39. The upshot of the above determination is that the instant appeal lacks merit and is accordingly dismissed with costs to the Respondent.
40. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
5TH DAY OF JUNE, 2025
ADO MOSES
JUDGE
In the presence of:
Moses – C/A
N/A……………..for the Appellant
.Ms. Masai….…for the Respondent
2. The Appellant on 19th May 2022 applied for excise stamps through the iTax system. To process the application, the Respondent requested the Appellant to provide a reconciled summary of the usage of the stamps previously issued to the Appellant by the Respondent.
3. From the reconciliation provided by the Appellant, the Respondent noted that there had been an under-declaration of the taxes payable by the Appellant. The under-declaration, according to the Respondent, was occasioned by among others, the Appellant’s action of erroneously claiming excise duty remission despite the fact that no remission had been granted to the Appellant by the Cabinet Secretary as required under Legal Notice No. 52 of 2017 - Excise Duty (Remission of Excise Duty) regulations 2017.
4. Consequently, the Respondent, on 23rd August 2022, issued against the Appellant a tax assessment in the sum of Kshs. 328,456,412.33, being the taxes under-declared by the Appellant.
5. The Appellant objected to the assessments vide its letter dated 29/8/2022. The Respondent vide its Objection Decision of 28th October 2022 confirmed taxes in the sum of Kshs. 249, 583,565, thereby partially allowing the Appellant’s objection.
6. Dissatisfied with the Respondent’s Objection Decision, the Appellant herein filed an appeal against the same at the Tax Appeals Tribunal (hereinafter the Tribunal). Upon consideration of the appeal, the Tribunal dismissed the appeal vide its decision of 23/02/2024.
7. Aggrieved by the decision of the Tribunal, the Appellant lodged an appeal to this Court against the whole of the said decision pursuant to Section 32 of the Tax Appeals Tribunal Act 2013 and Section 53 of the Tax Procedures Act 2015 on the following six (6) grounds of appeal: -
“1. THAT the Tribunal erred in law and fact by failing to give effect to the spirit of Legal Notice No. 52 of 2017 and find that the Appellant was entitled to remission of tax under Legal Notice No. 52 of 2017.
2. THAT the Tribunal erred in law and fact by failing to find the Appellant was compliant with Legal Notice No. 52 of 2017.
3. THAT the Tribunal erred in law and fact by failing to make a finding that the Respondent breached the Appellant’s rights to fair administrative action in not communicating the remission of tax application decision if any.
4. THAT the Tribunal erred in law and fact by failing to make a finding that the Respondent did an inspection on the Appellant from time to time and never made any objections.
5. THAT the Tribunal erred in law and fact by not considering the Respondent was under obligation to communicate the decision as to Appellant’s application for remission of tax under Legal Notice No. 52 of 2017.
6. THAT the Tribunal erred in law and fact by ignoring the submissions and documents of the Appellant evidencing the communications and subsequent inspection by the Respondent.”
8. In opposition to the appeal, the Respondent filed a Statement of Facts (SoF) dated 11/9/2024. The Respondent in the said SoF contended that the Tribunal did not err in its finding that the additional assessments were justified and that the Respondent had not violated the Appellant’s right to fair administrative action.
9. In response to the memorandum of appeal, the Respondent argued that under Legal Notice No. 52 of 2017, the authority to approve applications for excise duty remission lay solely with the Cabinet Secretary. According to the Respondent, it had not been assigned any role under this legal notice and therefore could not be held responsible for the Appellant’s failure to secure the necessary approval for remission.
10. Additionally, the Respondent maintained that the Tribunal correctly found that the Appellant could not claim duty remission without first obtaining approval from the Cabinet Secretary as required by the law.
11. The Respondent also rejected the allegation by the Appellant that the Tribunal failed to consider its relevant documents. The Respondent maintained that the Tribunal had acknowledged the Appellant’s application, but found no evidence of a positive response or approval from the Cabinet Secretary.
12. Consequently, the Respondent supported the Tribunal’s conclusion that the Appellant could not rely on the remission without proof of such approval.
13. The Respondent emphasized that under section 56 of the Tax Procedures Act as well as under section 30 of the Tax Appeals Tribunals Act, the burden was on the Appellant to prove the assessment was excessive or the tax decision improper. The Respondent asserted that the Appellant failed to discharge this burden.
14. Finally, the Respondent’s position that the Tribunal’s decision was reasoned and justified, as it considered the pleadings and submissions of both parties. The Respondent therefore urged this court to uphold the Tribunal’s judgment and to dismiss the Appellant’s appeal with costs, describing it as frivolous and an abuse of court process.
15. The Application was canvassed by way of written submissions. The Respondent filed its submissions dated 11th September 2024, generally restating the grounds in its SoF, which I need not reproduce here.
16. The Appellant, on its part, did not initially file its submission within the timelines which had been given by the Court. However, vide leave of this court granted on 28th May 2025, the Appellant filed its submissions on the same day.
17. In its submissions, the Appellant submitted that it was deprived of its right to fair administrative action and legitimate expectation. According to the Appellant, it had vide its application dated 30th April 2017 made an application for remission under Legal Notice No. 52 of 2017 to the Cabinet Secretary, and that the Cabinet Secretary by his later dated 25th May 2017, asked the Respondent to review the Appellant’s application to allow processing of the application for remission.
18. The Appellant submitted that despite the Respondent visiting their premises and reviewing their processes, the Respondent failed to provide any response to the Appellant on the outcome of the process review to aid the grant of the remission. Consequently, the Appellant submitted, the Respondent’s action violated the Appellant’s rights as guaranteed under Article 47 of the Constitution as fortified under Sections 4(1), 4(2), and 6 of the Fair Administrative Action Act.
19. The Appellant maintained that the Tribunal erred in failing to find that the Appellant’s rights were violated by the Respondent’s failure to respond to the letter from the Cabinet Secretary (Finance), on the Appellant’s application for excise duty remission.
20. The Appellant therefore urged this court to set aside the judgment by the Tribunal, allow the appeal and issue a declaration that the Respondent breached the Appellant’s right to Fair Administrative Action by failing to advise and communicate its findings with the Appellant and/or the Cabinet Secretary.
21. The Appellant also seeks an order of declaration that the Appellant is compliant with Legal Notice No. 52 of 2017 and is entitled to remission of tax of 80 percent, with the result that the Respondent’s Assessment of Kshs. 249,583,565.00 on the Appellant be vacated.
Analysis and determination:
22. This being a first appeal, this court is under a duty to re-evaluate and assess the evidence and make its own conclusions, but keeping in mind that, unlike the trial court, this court had no advantage of observing the demeanour of the witnesses and hearing their evidence firsthand. In the case of Mbogo and Another vs. Shah [1968] EA 93 the Court stated:
“…that this Court will not interfere with the exercise of judicial discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which is should not have acted or because it failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.”
23. Again, the Court of Appeal for Eastern Africa in Pandya -vs- Republic [1957] EA 336 is as follows: -
“On a first appeal from a conviction by a Judge or magistrate sitting without a jury the appellant is entitled to have the appellate court’s own consideration and views of the evidence as a whole and its own decision thereon. It has the duty to rehear the case and reconsider the witnesses before the Judge or magistrate with such other material as it may have decided to admit. The appellate court must then make up its own mind not disregarding the judgment appealed from but carefully weighing and considering it. When the question arises which witness is to be believed rather than another and that question turns on manner and demeanor, the appellate court must be guided by the impression made on the Judge or magistrate who saw the witness but there may be other circumstances, quite apart from manner and demeanor which may show whether a statement is credible or not which may warrant a court different.”
24. This is an appeal from the Tax Appeals Tribunal to this court pursuant to Section 32 of the Tax Appeals Tribunal Act (Cap. 469A), which provides that appeals from the Tribunal lies with the High Court and that the rules applicable in the High Court are those set out by the Chief Justice.
“32. Appeals to the High Court on decisions of the Tribunal
(1) A party to proceedings before the Tribunal may, within thirty days after being notified of the decision or within such further period as the High Court may allow, appeal to the High Court, and the party so appealing shall serve a copy of the notice of appeal on the other party.
(2) The High Court shall hear appeals made under this section in accordance with rules set out by the Chief Justice.”
25. It is critical to note that Section 32 of the Tax Appeals Tribunal Act, as read together with the Tax Appeals Tribunal (Appeals to the High Court) Rules, does not restrict appeals from the Tribunal to be on issues of law only. It therefore means that in appeals from the Tribunal, this court has the power to interrogate both factual and legal findings of the Tribunal.
26. I have carefully reviewed and considered the Appellant’s memorandum of appeal filed herein, the record of appeal dated 30th September 2024, and the parties' pleadings and submissions filed in support of their respective positions. I am of the view that the only issue for determination in this appeal is the question of whether the Tribunal erred in upholding the Respondent's assessment.
27. A background of this matter is that on 19/5/2022, the Appellant applied for excise stamps via the iTax platform. Upon receiving the application, the Respondent requested a reconciled summary of stamp usage from the Appellant. After reviewing the reconciliation, the Respondent indicated an additional principal tax liability amounting to Kshs. 328,456,412.33.
28. Subsequently, on 23/8/2022, the Respondent issued an additional assessment based on discrepancies observed between the excise stamps issued and used, and the excise duty declared in the Appellant's monthly returns.
29. The Appellant objected to the assessment, arguing that it had applied for an 80 percent remission under Legal Notice No. 52 of 2015 and had been paying excise duty after factoring in this remission. The Appellant also claimed that the Respondent had inspected its premises but had not communicated any updated findings.
30. However, the Respondent noted that the Appellant had not obtained the required approval for the remission and therefore rejected the objection. The Respondent upheld the assessment, revising the principal tax due to Kshs. 249,583,565.00.
31. The Appellant filed an appeal against the Respondent’s objection decision before the Tribunal. Upon due consideration of the appeal before it, the Tribunal dismissed the appeal and found that the Appellant did not adduce any evidence in support of their contention that the Cabinet Secretary approved its application requesting to apply 80 percent remission for excise duty.
32. Legal Notice No.52 of 2017; Excise Duty (Remission of Excise Duty) Regulations 2017 provides as follows: -
“2(1) The CABINET SECRETARY may on application by a manufacturer, grant the remission of excise duty at eight percentum with respect to beer made from sorghum, millet or cassava or any other agricultural produce grown in Kenya.
2 (2) This regulation shall not apply in respect of beer made from barley.”
33. From the above provision, it is evident that it is only the Cabinet Secretary who has the legal authority to grant excise duty remission.
34. I have perused the record and note that at no point did the Appellant provide any proof, either before the Respondent or the Tribunal, that it had been granted excise duty remission by the Cabinet Secretary as required under the law.
35. Although the record indicates that the Appellant initiated the process of obtaining the remission, there is no proof of positive feedback from the Cabinet Secretary.
36. In the case of Mount Kenya Bottlers Limited & 3others v Attorney General & 3 Others 2012 eKLR, Lenaola J (as he then was) held:-
“Whether the taxation imposed is unfair, harsh or inequitable cannot be the reason for holding that it should not be imposed. It is the duty of the state to impose taxation and it is the duty of subjects to pay such taxes as are so imposed.”
37. Based on the above, I agree therefore with the finding of the Tribunal that the Appellant could not purport to enjoy the duty remission at 80 percent under the Legal Notice without the approval of the Cabinet Secretary.
38. This Court having come to the conclusion that it was not the mandate of the Respondent to grant such an approval, it is therefore equally my finding that the Tribunal did not err in its decision dated 23rd February 2024. The same is therefore upheld, with a finding that the Respondent’s Objection Decision of 28th October 2022 in the sum of Kshs. 249, 583,565, was in law justified.
39. The upshot of the above determination is that the instant appeal lacks merit and is accordingly dismissed with costs to the Respondent.
40. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
5TH DAY OF JUNE, 2025
ADO MOSES
JUDGE
In the presence of:
Moses – C/A
N/A……………..for the Appellant
.Ms. Masai….…for the Respondent