4. Legal Opinions & Judgments
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Item Diversey Eastern and Central Africa Limited Vs Commissioner Legal Services & Board Coordination(Kenya Law, 2023) Tax Appeal TribunalThe Appellant filed a Memorandum of Appeal dated and filed 9th June 2023 raising the following grounds of appeal: a) That the Respondent erred in law and in fact by issuing tax assessments out of the statutory time limit of five (5) years. b) That the Respondent erred in law and fact by disallowing validly incurred foreign tax credits claimed within the statutory timelines. c) That the Respondent erred in law and in fact by disallowing tax credits from previous years validly accrued by the Appellant. d) That the Respondent erred in law and fact by imposing a tax shortfall penalty on principal taxes which had already been remitted by the Appellant, within the prescribed time limit and in the manner specified by the Respondent.Item Viriotech Enterprises Limited Vs Commissioner Intelligence, Strategic Operations, Investigations & Enforcement(Kenya Law, 2023) Tax Appeal TribunalIn its Memorandum of Appeal dated 29th May 2023 and filed on 26th May 2023, the Appeal was based on the grounds that: i. The Respondent erred in law and fact by wrongful deeming the bank credits as sales and charging tax. ii. The Respondent is in violation of Income Tax Act Section 3 (1) on charge of tax. iii. The Respondent is in violation of VAT Act First Schedule Section B on exempted services. iv. The Respondent erred in law by ignoring Section 51(7)2 and 51(11) of the Tax Procedures Act on validity of the Objection Decisions...Item Salim Merchandise Company Limited Vs Commissioner Investigation & Enforcement(Kenya Law, 2023) Tax Appeal TribunalThe Appeal is premised on the following grounds as stated in the Appellant’s Memorandum of Appeal filed on 19th April 2023 and the Amended Memorandum of Appeal filed on 18th October 2023: i. That the Respondent erred in fact and in law by purporting to issue an objection decision on 28th March 2023 way outside the 60 days period provided for by the Tax Procedures Act. ii. That the Respondent erred in fact and law in its decision dated 28th March 2023 by demanding unpaid taxes assessed at Kshs. 155,534,569.00 from the Appellant. iii. That the Respondent erred in law and in fact as the premise of demanding taxes was that the amount of monies deposited in the...Item Dachi Limited Vs Commissioner Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a private limited liability company duly incorporated and registered under the Companies Act within the Republic of Kenya. Its main form of business is in general construction and related supplies. The Respondent raised and issued additional assessments of VAT on 29th August 2022 for the period of July 2022 amounting to Kshs. 1,980,560.00. On 29th October 2022 the Appellant lodged an objection to the assessment for the period of July 2022. On 29th November 2022 the Respondent issued an Objection decision confirming the VAT assessment. On receiving the Objection decision and being aggrieved, the Appellant filed a Notice of Appeal on 18th January 2023.Item Namlink Company Limited Vs Commissioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appeal was premised on the Memorandum of Appeal dated 14th March 2023 and filed with the Tribunal on 15th March 2023 raising the following grounds: (i) That the Respondent erred in law by proceeding to conduct, charge and/or allow an additional tax assessment amounting to Kshs. 1,941,063.98 inclusive of penalties and interest on the Appellant while the tax should be much less. (ii) That the Appellant’s electronic mail address and i-Tax account credentials were compromised, wrong figures filed and wrong tax declared by persons unknown to the Appellant. Further, that the Appellant disowns the figures filed on their i-Tax account. (iii) That the Respondent erred in law by not allowing the amendment of the return to reflect the correct tax position. (iv) That the Respondent erred in principle by considering wrong supplier invoices as declared by ‘the’ person unknown to the Appellant and disregarding the correct supplier invoices presented in our objection dated 18th January 2023. (v) That the Respondent erred in law and fact by failing to consider that the Appellant was a registered taxpayer and was responsible for bearing input tax, used in the generation of taxable sales.Item Rural Distributors Enterprises Limited Vs Commissioner Legal Services and Board Coordination(Kenya Law, 2023) Tax Appeal TribunalThe Appeal is premised on the following grounds set out in the Memorandum of Appeal dated 3rd March 2023 and filed on 7th March 2023: (i) The Respondent erred in law and in fact by failing to consider the Appellant’s grounds of Objection on its full merit; and (ii) The Respondent erred in law and in fact by issuing the Appellant with an additional assessment without taking into consideration the expenses that was incurred in the business.Item Kapwell Enterprises Limited vs Commissioner Legal Services & Board Coordination(Kenya Law, 2023) Tax Appeal TribunalThe Appeal is premised on the Memorandum of Appeal dated and filed on 2nd November 2023 raising the following grounds: a) That the assessments raised do not reflect the true position of the business b) That the taxpayer filed its self assessments for the periods 2013 and 2014 which show the true position of the business. c) That the assessments were done based on imports data for 2013 and 2014. d) That the Appellant never made any imports as the same was not claimed in their VAT returns. e) That the taxpayer was never aware that the company was used to import goods and not to clear imports. f) That the Appellant only became aware that the company was used to import goods during the objection review stage and discovered that it was a business associate who used the company to import goods and not to clear as had been agreed. g) That it is punitive to make the Appellant pay the tax es due and yet it was not their imports.Item Modesty Medical Centre Limited Vs Commissioner Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a private limited liability company incorporated in Kenya under the Companies Act whose principal business activity is offering medical services as a hospital. The Respondent issued to the Appellant an additional Corporate income tax assessment of Kshs. 2,610,945.30 for the year of income 2019 on 25th May 2021, which the Appellant entirely objected to on 2nd November 2022. The Respondent issued its objection decision in a letter dated 27th January 2023, partially allowing the objection and confirming principal tax of Kshs. 742,473.60, plus interest and penalty. Dissatisfied with the Respondent’s objection decision, the Appellant filed its Notice of Appeal dated 24th February 2023.Item Transmara General Store Limited Vs Commissioner Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company whose principal activity is wholesale and retail trade of hardware materials and transportation. The Appellant was subjected to returns review covering Corporation tax and VAT declarations for the period January 2015 to December 2020. That the review was based on the risks identified in the Appellant's filing status. Vide a notice dated 10th March 2022, the Appellant was notified that records held with the Respondent indicated that it had been filing credit returns since the year 2015. The Appellant was required to provide supporting documents for its inputs and give proper explanation as to why it was constantly on credit. The Respondent sent a letter dated 29th March 2022 further requesting for certain documents from the Appellant to ascertain the correctness of the tax declarations. The Appellant subsequently provided the workings for the variances through the document dated 16th June 2022. Consequently, the Appellant was notified via email on 23rd June 2022 and 29th June 2022 of the Respondent's intention to issue additional assessments for failure to reconcile the differences.Item Titus T. Ndaka Vs Commissioner Legal Services & Board Coordination(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is an individual taxpayer based in Matuu Town, Machakos County whose business is rental of residential properties. On 9th June 2022, the Respondent issued the Appellant with a letter of “intention to issue assessment for the undeclared rental income for the period January 2016 to April 2022.” On 21st December, 2022, the Respondent issued additional assessments to the Appellant on income tax return for the period January 2016 to December 2016. On 5th January 2023, the Appellant objected to the assessment order on the iTax platform and received an acknowledgement. On 16th January 2023, the Respondent sent an email to the Appellant asking for four documents to support the objection. On 31st January 2023, the Respondent issued its objection decision. Aggrieved by the decision of the Respondent, the Appellant filed this Appeal on 24th February 2023.Item Platinum Distillers Limited Vs Commissioner Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company incorporated in the Republic of Kenya under the Companies Act, 2015. Its main business is manufacture of ready to drink (RTD) beverages and spirits. The Respondent issued the Appellant with an additional assessment order on 4th May 2022, for the tax period March 2022. On 11th October 2022, the Appellant objected to the Respondent’s additional assessment. On 9th December 2022 the Respondent issued its Objection decision. Aggrieved by the Respondent’s Objection decision, the Appellant lodged a Notice of Appeal dated and filed on 3rd February 2023.Item Peter Horrace Abiya vs Commissioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe grounds of the Appeal are outlined in the Amended Memorandum of Appeal dated and filed on 21 st March 2023 and as summarized hereunder: a) T hat the Respondent erred by not considering the costs incurred in the generation of the income and instead charged tax on the whole income in breach of Section 15 of Income Tax Act Cap 4 70 Laws of Kenya. b) T hat in the absence of documents of support, the expenses by precedence the Respondent ought to consider market mark up. c) That the Respondent did not carry a comparative study of similar business to establish the average gross margin for such an activity, by this be in compliance with Section 3 of Income Tax Cap 470. d) T hat we hold that the market mark up for such consultancy is around 10% of the gross pay.Item Stratogen Limited Vs Commissioner Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a private limited liability company registered under the Companies Act of the laws of Kenya and registered as a taxpayer by the Kenya Revenue Authority. The Appellant was identified by the Respondent for review and in the process of review the Respondent noted variances between expected turnover from bankings and turnover declared in VAT and IT2C returns for the years January 2017 to December 2021. Vide a letter dated 7th September 2022 the Respondent communicated the findings of the audit to the Appellant and also issued a demand notice of Kshs. 54,050,415.97.00, being Corporation tax and VAT.Item China Communication Construction Company Limited Vs Commissioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company incorporated in Kenya whose business activity is that of construction services. The Respondent raised VAT assessment orde rs and debit adjustment vouchers on iTax on 3rd November, 2023 where it disallowed Input VAT amounting to Kshs. 103,351,052.00. The Appellant objected to the VAT assessments on iTax on both 2 nd December, 2022 and on 29 th November 2022. The Respondent issue d the Appellant with an objection decision confirming the tax assessments raised on the Appellant on 27 th January, 2023. Following its dissatisfaction with the Respondent’s decision, the Appellant appealed by filing a Notice of Appeal to the Tribunal date d 24 th February, 2023.Item End to End Limited Vs Commissioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company incorporated in Kenya and its principal business is construction. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, the Authority is charged with the responsibility of among others, assessment, collection, accounting, and the general administration of tax revenue on behalf of the Government of Kenya. The Respondent on 22nd October 2021 issued upon the Appellant additional tax assessments for Value Added Tax ( VAT ) for the period of May 2018 and April 2019. The Respondent again on 16th November 2021 issued upon the Appellant additional tax assessments i n respect to V AT for the period of November 2017 On 30th June 2022 the Respondent issued upon the Appellant additional tax assessments for Income tax for the years 2017, 2018, 2019 and 2020 and Value Added Tax for the period of April 2018, December 2019, November 2020 and April 2021.Item Kobo360 Limited Vs Commissioner of Legal Services and Board Coordination(Kenya Law, 2023) Tax Appeal TribunalOn 3rd October 2022, the Respondent issued the Appellant with additional tax assessments for Corporate Income Tax ("CIT"), Pay as You Earn ("PAYE"), Withholding tax ("WHT") and Stamp Duty for the years of income 2019 and 2020 amounting to Kshs. 33,770,395 inclusive of penalties and interest. On 2 nd November 2022, the Appellant lodged a partial objection to the assessment. On 6 th December 2022 the Appellant and Respondent entered into a Payment Plan in respect to the tax not in dispute of Kshs. 12,285,892, comprising of Stamp Duty of Kshs 4,249,989 .00 and Withholding tax of Kshs 8,035,903 .00.Item Protex Holdings Limited Vs Commissioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company incorporated in Kenya under the Companies Act It s principal business is to invest in real estate. The Respondent conducted a Value Added Tax (VAT) compliance review on the operations of the Appellant and raised an additional assessment amounting to Kshs. 4,967,041.40 for the tax period of August 2017. The Appellant objected to the assessment on 25 th May 2019. The Respondent issued its objection decision on 27 th February 2023. Dissatisfied with the Respondent’s objection decision, the Appellant filed its Notice of Appeal on 29 th March 2023.Item Quishlaq Enterprises Limited Vs Commissioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company duly incorporated in Kenya and involved in the business of accommodation and food service industry. The Respondent stated that the Appellant was identified through data received on overcla imed services for the month of July 2022. The Appellant had claimed input VAT from suppliers who did not declare corresponding sales. On 20 th August 2022, the Respondent issued an Assessment Order to the Appellant for the period in question in reference to VAT and on 25 th January 2023, the Appellant filed a request for an extension of time to file a late objection.Item Ashut Plastics Limited Vs Kenya Revenue Authority(Kenya Law, 2023) Tax Appeal TribunalThe Appeal is premised on the following grounds as stated in the Memorandum of Appeal date d 20 th June, 2023 and filed on 22 nd June, 2023: a) That the Respondent erred on matters of law by regarding the Appellant's goods as chargeable under the 1 st Schedule of the Excise Duty Act of 2015. b) That the Respondent erred on matters of fact and law by c harging the Appellant's goods E xcise duty contrary to the 1 st Schedule of the Excise Duty Act of 2015 which only provides for taxation of imported plastic articles while the Appellant's goods are locally produced. c) That the Respondent erred in fact and laws by finding that the amendments to the Finance Act 2021 vide the Finance Bill 2022 were intended amendments other than assented amendments to the law as per the letter by the Clerk of the National Assembly dated 28 th July 2022 confirming the amendment. d) Tha t the Respondent erred in both law and fact by failing to consider the evidence produced by the Appellant in their objection dated 23 rd May 2023. e) That the Respondent erred in both law and fact by rejecting the Appellants objection dated 23 rd May 2023. f) That the Respondent erred in both fact and law by issuing additional assessment in the system for the sole reason that the Appellants had not amended their return to include the wrongful assessments.Item Gearbox Limited vs Commisioner of Domestic Taxes(Kenya Law, 2023) Tax Appeal TribunalThe Appellant is a limited liability company incorporated in Kenya and a registered taxpayer. The Respondent conducted a compliance check on the Appellant after a credit verification process in August 2022 to establish if the credits were genuine. On 2nd December 2022, the Respondent issued a notice to the Appellant requesting it to declare and make payments for the pending liabilities in the system. On 21st December 2022, the Respondent issued a pre-assessment notice that highlighted its preliminary findings for the period 2018 and 2019. The Appellant objected to the pre-assessments vide a letter dated 26th April, 2023. On 4th May 2023, the Respondent issued additional assessments for Kshs. 35,297,733.24, being additional principal Income tax and VAT for the years of income 2018 and 2019. On 4th May 2023, the Appellant lodged an objection to the Respondent's additional assessments. The Respondent issued the Appellant with an objection decision on 30th June 2023. The Appellant, aggrieved with the Respondent‟s objection decision, lodged this Appeal at the Tribunal on 10th August 2023.