Introduction
The Tax Appeals Tribunal recently rendered its judgment in Havi ta Havi & Co. Advocates v Commissioner General, Kenya Revenue Authority (Tax Appeal E345 of 2024), reaffirming the strict application of statutory timelines for lodging tax objections. This decision serves as a crucial reminder for taxpayers to adhere to tax procedures or risk losing their right to contest tax assessments.
Case Summary
The dispute arose from a tax assessment issued by the Kenya Revenue Authority (KRA) against Havi ta Havi & Co. Advocates, covering PAYE, VAT, and income tax obligations for the period 2016–2020. The firm disputed multiple tax decisions and sought to challenge them before the Tribunal.
The Appellant (Havi ta Havi & Co. Advocates) argued that KRA had failed to issue timely objection decisions in response to their objections and that some tax demands were excessive. Conversely, KRA contended that the Appellant had failed to lodge objections within the statutorily prescribed timelines, making their appeal incompetent.
Tribunal’s Decision
The Tribunal struck out the appeal, holding that:
1. Strict Compliance with Statutory Timelines
The Appellant failed to lodge objections within the statutory 30-day period under Section 51(2) of the Tax Procedures Act (TPA). The Tribunal reiterated that statutory timelines are mandatory and not mere procedural technicalities.
2. Failure to Provide Evidence of Extension
The Appellant claimed to have been granted an extension to object but failed to provide proof of such an extension from KRA.
3. No Appeal Without an Objection Decision
The Tribunal clarified that a tax appeal can only be 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.
4. Jurisdictional Limits
The Tribunal emphasized that it lacked jurisdiction to hear an appeal where statutory timelines were not followed, citing Owners of Motor Vessel “Lilian S” v Caltex Oil (K) Ltd (1989) eKLR, which underscores that jurisdiction is fundamental to any legal proceeding.
Key Takeaways for Taxpayers
File Objection is Within 30 Days
Taxpayers disputing KRA assessments must lodge objections within 30 days of notification, as mandated under Section 51(2) of the TPA. Failure to meet this deadline results in the tax liability becoming final and enforceable.Request for
Extension Must Be Documented
Where an extension of time to object is sought, taxpayers must ensure they obtain written confirmation from KRA and retain evidence of such approval.
No Appeal Without an Objection Decision
An appeal to the Tribunal can only be based on an objection decision issued by KRA. Without a properly filed objection, taxpayers have no basis to challenge KRA’s assessment before the Tribunal.
Procedural Compliance is Mandatory
The Tribunal reaffirmed that statutory timelines are not “mere procedural technicalities” but substantive legal requirements that must be followed. Article 159(2)(d) of the Constitution, which allows courts to dispense justice without undue regard to procedural technicalities, does not override express statutory provisions.
Conclusion
The Tribunal’s decision in the Havi ta Havi case underscores the importance of procedural compliance in tax disputes. Taxpayers must be diligent in adhering to statutory timelines to safeguard their rights. Failure to object within the prescribed period will result in tax assessments becoming final and unchallengeable.
