Issue 1: Whether the Tribunal erred in finding that the Appellant’s objection decision dated 30/11/2020 was improper.
12.The Appellant’s objection decision was issued in a letter dated 30th November 2020 whereby the Appellant noted that the Respondent’s objection to its assessment was not validly lodged as stipulated under Section 51(3) of the Tax Procedures Act. Based on this the Appellant confirmed its additional assessment of Ksh.4,787,812.80.
13.The Tribunal in its judgement dated 8th April 2022 found that there was no requisition of documents prior to the objection which was rejected on the basis of section 51(2) of the Tax Procedure Act. It held that there was no communication before and in the objection decision of the relevance or lack thereof of the documentation provided despite the issue having been raised in the objection.
14.The Tribunal was of the view that the Respondent cannot arbitrarily reject documents without giving a valid reason and should have at least alerted the Appellant to enable him to make the necessary amends.
15.The Appellant on its part submitted that its assessment was confirmed in its objection decision as the Respondent failed to satisfy the burden of proof by lodging a valid objection as required under section 51(2) and 51(3) of the Tax Procedure Act demonstrating that the assessment was in any way excessive or erroneous.
16.The Appellant argued that the Respondent was given over 53 days to lodge a valid objection as required by section 51(2) and 51(3) of the Tax Procedure Act but he did not furnish the Appellant with any information necessary to challenge the assessment.
17.Section 51(3) and (4) of TPA states:
18.In the Appellant’s objection decision, found on page 105-106 of the record of Appeal, the Appellant submitted that the Respondent’s notice of objection was not validly lodged as stipulated under section 51(3) Tax Procedure Act . The Respondent’s objection letter dated 7th October 2020 is not found in the record of Appeal therefore the court cannot appreciate its contents.
19.The court notes that prior to the objection decision, the Appellant did not notify the Respondent that his objection was not validly lodged as stipulated under section 51(4) of the Tax Procedure Act, In fact the Respondent only became aware that its objection notice was not validly lodged in the objection decision dated 30/11/2020.
20.Section 51(4) of the Tax Procedure Act is clear and couched in mandatory terms that the Commissioner has the obligation to notify the taxpayer that a notice has been invalidly lodged within 14 days once it has determined that is the case.
21.I concur with the Tribunal that the purpose of such an immediate notice is to give the taxpayer an opportunity to rectify its objection to the assessment and/or provide additional documents in support of its objection. Failure to give the Respondent such an opportunity is to deny him his right to fair administrative action and is in breach of the Appellant’s legitimate expectation that he would be afforded a chance to support his objection.
22.Legitimate expectation was defined in the Court of Appeal case of Kenya Revenue Authority & 2 others v Darasa Investments Limited  eKLR where the court quoted the text book by POLLARD, PARPWORTH AND HUGHES writing at page 583 in the 4th edition of CONSTITUTIONAL AND ADMINISTRATIVE LAW: TEXT WITH MATERIAL:
23.Although the burden of proof is upon the taxpayer to prove an assessment wrong, the Appellant had the obligation to notify him that his objection was not validly lodged and this would then give him the opportunity to lodge it correctly and provide all necessary information before an objection decision is issued.
24.In light of the above finding, I am of the opinion that the Appellant’s objection decision made without the affording the Respondent an opportunity to amend his objection and/or provide further documentation breached the Respondent’s legitimate expectation and right to fair administrative action. I therefore find that the objection decision was improper.
25.The second issue for determination is whether the confirmed additional assessments were proper and lawful?
26.In the letter of objection dated 30th November 2020, the Appellant confirmed the additional assessment of taxes to be paid by the Respondent to be Ksh.4,787,812.80.
27.Having found that the objection decision was arrived at without allowing the Respondent the opportunity to support his objection, I find that the additional assessments were also not proper nor lawful.
28.However, the court cannot set aside the Appellant’s assessment in entirety as there may be taxes owed by the Respondent to the Appellant. Thus it would be in the interest of justice to refer the matter back to the Appellant to reconsider the Respondent’s objection. The Appellant should notify the Respondent why his objection was invalid and he shall be given an opportunity to rectify the objection and provide relevant documentation.
29.The third issue for determination is whether there was a proper Appeal before the Tribunal.
30.The Appellant submitted that the Respondent did not produce the tax decision it was challenging before the Tribunal in its Appeal. That this was brought to the attention of the Tribunal but it failed to make a determination on this issue.
31.Based on this, the Appellant prayed to have this court find that there was no proper Appeal before the Tribunal which lacked jurisdiction to entertain the Appeal.
32.It is undisputed that the Respondent did not submit a copy of the tax decision in his Appeal before the Tribunal as required under section 13(2) of the Tax Appeals Tribunal Act which states:-
33.However upon reading the Appellant’s statement of facts dated 19th May 2021 found on page 96-99 of the record of Appeal, I note that the Appellant stated that after several reminders to the Respondent, the tax decision was provided to it on 30th April 2021. Although the tax decision was not provided by the Respondent upon filing the Appeal, it was provided to the Tribunal and the Respondent on or about 30th April 2021 before the Appellant filed its statement of facts in opposition to the Appeal before the Tribunal.
34.Although the Tribunal erred in failing to make a determination on this issue when the Appeal was before it and the Respondent filed its Appeal without the objection decision, I find that the Appeal before the Tribunal was proper and that the Tribunal had jurisdiction to entertain the Appeal.
35.The upshot of the above is that the Appeal is partially successful. The finding of the Tribunal setting aside the additional assessments of Ksh.4,787,812.80 is quashed.
36.The court orders the Appellant to notify the Respondent why his objection was invalid within 1 week of the delivery of this ruling and in response the Respondent to file an objection in line with the Appellant assessment within 2 weeks of that notification failure to which the Appellant’s assessment will be found to be due and payable.
37.In conclusion the court hereby grants the Appellant’s prayers (c ), (d) and (e) of the Memorandum of Appeal.
38.Each party has to bear its own costs.
DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF MARCH 2023J. W. W.MONGAREJUDGEIn the presence of:-Mr. Nyapara for the AppellantNo appearance for the RespondentSylvia- court Assistant