Kamau v Commissioner, Investigations and Enforcement (Tax Appeal E809 of 2023) [2024] KETAT 1657 (KLR) (21 November 2024) (Judgment)
Neutral citation:
[2024] KETAT 1657 (KLR)
Republic of Kenya
Tax Appeal E809 of 2023
CA Muga, Chair, BK Terer, EN Njeru, E Ng'ang'a & SS Ololchike, Members
November 21, 2024
Between
Terecia Wacuka Kamau
Appellant
and
Commissioner, Investigations and Enforcement
Respondent
Judgment
Background
1.The Appellant is an individual carrying out business within the Republic of Kenya. The Appellant is one of the directors of the company known as Nairobi Fairly Timbers & Hardware Ltd.
2.The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws (hereinafter “the Act”). Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws.
3.The Respondent computed the Appellant’s income tax and Value Added Tax (hereinafter “VAT”) amounting to Kshs 74,008,571.00 consisting of income tax of Kshs 15,778,535.00 and VAT of Kshs 58,230,036.00 vide additional assessments dated 19th July 2023. The assessment covered the period 2017 to 2021.
4.The Appellant lodged an objection to the Assessments on 15th August 2023.
5.The Respondent considered the objection and issued an objection decision dated 16th October 2023 confirming the assessments as follows; year 2017 Kshs 10,735,396.00, year 2018 Kshs 14,563,176.00, year 2019 Kshs 15,747,575.00, year 2020 Kshs 14,359,799.00 and year 2021 Kshs 18,602,626.00.
6.The Appellant being aggrieved by the decision, lodged this Appeal vide notice of Appeal on 16th November 2023.
The Appeal
7.The Appeal is based on the Memorandum of Appeal dated 14th November 2023 and filed on 16th November 2023 and is predicated on the following grounds:a.That the Respondent issued assessments commencing from the year 2016 to March 2022 and raised by the Respondent on 19th July 2023. Therefore, the Respondent erred in law and fact in issuing statutory time barred tax assessments. Consequently, the investigations issued through the letter dated 6th March 2023, the assessments dated 19th July 2023 and the resultant objection decision dated 16th October 2023 are all illegal, unlawful, null and void ab initio.b.That the Respondent erred in law and fact by issuing tax assessments for the year 2017, 2018 and 2019 which are statutory time barred, therefore, are all illegal, unlawful, null and void ab initio.c.That the Appellant has never been charged or convicted for gross or wilful neglect to pay tax, tax evasion or fraud in relation to taxes therefore, the Respondent cannot find refuge under Section 29(6) or 31(4)(a) of the Tax Procedures Act, CAP 469B of the Laws of Kenya (hereinafter “TPA”). Therefore, the Respondent had no justification in law to assess and demand payment of statutory time barred taxes hence, the assessments and the resultant objection decision are illegal, unlawful, null and void ab initio.d.That the Respondent erred in law and fact by demanding the Appellant to provide documents contrary to section 23 (1)(c) of the TPA since the assessment are beyond the 5-year rule therefore, the assessments and the resultant objection decision are all illegal, unlawful, null and void ab initio.e.That the Respondent has unlawfully treated the Appellant and Nairobi Fairly Timber & Hardware Limited as one and inseparable legal entity contrary to the tenets in Salomon vs Salomon [1896] UKHL 1, [1897] AC 22 by treating funds from Nairobi Fairly Timber & Hardware Limited as funds belonging to the Appellant.f.That the Respondent vide a letter dated 19th July 2023 unlawfully found that the Appellant operates timber sales from January 2017 yet the Appellant has never operated timber sales. Instead, Nairobi Fairly Timber & Hardware Limited operates timber sales which company is registered for VAT and has been paying for VAT religiously. The Respondent erred in treating the Appellant and Nairobi Fairly Timber & Hardware Limited as one legal entity which is contrary to tenets in Salomon vs Salomon [1896] UKHL 1, [1897] AC 22.g.That the Respondent vide a letter dated 19th July 2023 unlawfully registered the Appellant for VAT obligation by unlawfully finding that the Appellant operates timber sales from January 2017 yet the Appellant has never operated timber sales. Instead, Nairobi Fairly Timber & Hardware Limited operates timber sales which company is registered for VAT and has been paying for VAT religiously.h.That the Respondent erred in law and fact in finding that the Appellant had qualified for VAT responsibility yet the deposits in the Appellant’s bank account were not hers, but the funds were received on behalf of Nairobi Fairly Timber & Hardware Limited pursuant to a company resolution of the said company of 2nd January 2015.i.That the Respondent erred in law and fact by subjecting the funds in Appellant’s bank account to taxation when part of the funds do not belong to the Appellant. The Respondent assumed that all deposits in the Appellant’s bank account were Appellant’s incomes yet huge chunk of the deposits in the bank account were funds received on behalf of Nairobi Fairly Timber & Hardware Limited pursuant to a company resolution of the said company of 2nd January 2015.j.That the Respondent acted ultra vires and contrary to the provisions of Income Tax Act, CAP 470 of the Laws of Kenya (hereinafter “ITA”) by failing to exclude interbank transfers, gifts and inter-borrowing from spouse which amounts to capital, which transitions are not taxable.k.That demanding taxes on funds deposited in the Appellant’s bank account on behalf of Nairobi Fairly Timber & Hardware Limited is subjecting Nairobi Fairly Timber & Hardware Limited to double taxation when the said company already paid taxes on the same funds.l.That taxing funds held by the Appellant on behalf of Nairobi Fairly Timber & Hardware Limited amounts to unfair trial under Article 25(c) of the Constitution of Kenya,2010 (hereinafter “the Constitution”) amounts to unfair hearing contrary to Article 50(1) of the Constitution and amounts to unfair administrative action contrary to Article 47 of the Constitution because the Respondent did not give the said company a chance to be heard.m.That whereas the Respondent issued assessment relating to the period from 2017 to 2022, the Respondent erred in law and fact in failing to issue assessments for the year 2022 since the assessment ends at the year 2021.n.That the Appellant was unable to defend herself effectively because the Respondent issued one assessment but for two taxpayers that is the Appellant herein and another taxpayer called Simon Kamau Ndungu. Consequently, the assessment does not reveal who among the taxpayers is liable for monthly rent income tax liability.o.That the Respondent erred in law and fact in demanding the Appellant to provide internal records for companies that the Appellant is associated with and for companies that the Respondent had not assessed for taxes.
Appellant’s Case
8.In further support of the appeal, the Appellant relied on her statement of facts dated 14th November 2023 and filed on 16th November 2023. The Appellant filed her written submissions dated 5th July 2024 on 9th July, 2024 and the same were adopted by the Tribunal during the hearing on 11th September, 2024.
9.The Appellant’s case was that the Respondent issued letter of investigation findings dated 6th March 2023 referring to Appellant’s taxes from 2016 to 2022. The Appellant argued that whereas the Respondent sought to assesses Montana Guest Resorts Limited and the Appellant further to its letter dated 6th March 2023, the Respondent deviated from this duty and did not issue tax assessments regarding Montana Guest Resorts Limited. She maintained that whereas the Respondent did not issue assessments for Montana Guest Resorts Limited, the Respondent wanted her to pay Kshs 313,397.00 attributable to Montana Guest Resorts Limited as if the Appellant and the said company are the same legal entity.
10.The Appellant stated that considering that, the investigations are for the year 2023 as stated in the letter dated 6th March 2023 relating to taxes from 2016 to 2022, the investigations and the resultant finding are statutory time barred for infringing the 5-year rule. Therefore, the investigations are illegal, null and void ab initio.
11.The Appellant averred that the Respondent also issued tax assessment through a letter dated 19th July 2023 against the Appellant from the year 2017 to 2022. She argued that considering that the assessments were issued in the year 2023 through tax assessment contained in a letter dated 19th July 2023 relating to taxes from 2017 to 2022, the tax assessment and the resultant finding are statutory time barred for infringing the 5-year rule. Therefore, the investigations and assessments are illegal, null and void ab initio.
12.The Appellant stated that she filed her Reponses to the investigations and objection vide a letter dated 15th May 2023 and objection decision dated 16th August 2023 and that she provided the needed documents. The Appellant argued that despite evidence provided, the Respondent disregarded the evidence and the objection then issued its objection decision dated 16th October 2023 concerning income tax and VAT.
13.It was the Appellant’s case that since the Respondent’s assessments commence from the year 2016 to March 2022 and raised by the Respondent on 19th July 2023, the Respondent erred in law and fact in issuing statutory time barred tax assessments. Consequently, she averred that the investigations issued through the letter dated 6th March 2023, the assessments dated 19th July 2023 and the resultant objection decision dated 16th October 2023 are all illegal, unlawful, null and void ab initio.
14.According to the Appellant, the Respondent has never charged the Appellant nor has the she been convicted for gross or wilful neglect to pay tax, tax evasion or fraud in relation to taxes therefore, the Respondent cannot find refuge under Section 29(6) or 31(4)(a) of the TPA. She therefore, argued that the Respondent had no justification in law to assess and demand payment of statutory time barred taxes hence, the assessments and the resultant objection decision are illegal, unlawful, null and void ab initio.
15.The Appellant averred that the Respondent erred in law and fact by demanding the Appellant to provide documents contrary to Section 23 (1) (c) of the TPA since the assessment are beyond the 5-year rule. The Appellant questioned how the Respondent expects the Appellant to obtain documents that are not in Appellant’s possession due to effluxion of time. She also stated that since she could not produce the documents due to effluxion of time, the Respondent purported to invalidate the Appellant’s notice of objection. She maintained that the assessments required records that span over 5-year rule contrary to Section 23 (1)(c) of the TPA, the assessments and the resultant Objection Decision are all illegal, unlawful, null and void ab initio.
16.The Appellant stated that she is one of the Directors of Nairobi Fairly Timber & Hardware Limited. However, she noted that the Respondent unlawfully treated her and Nairobi Fairly Timber & Hardware Limited as one and inseparable legal entity contrary to the tenets in Salomon vs Salomon by treating funds from the said company as funds belonging to the Appellant.
17.The Appellant also stated that the Respondent erred in law and fact by subjecting part of funds in Appellant’s bank account to taxation when part of the funds did not belong to the Appellant. The Respondent assumed that all deposits in the Appellant’s bank account were Appellant’s incomes yet huge chunk of the deposits in the bank account were funds received on behalf of Nairobi Fairly Timber & Hardware Limited pursuant to a company resolution of the said company of 2nd January 2015. The purpose of the deposits was to facilitate purchase of materials for the company. Despite these explanations, the Respondent ignored these facts and proceeded to subject the deposits from Nairobi Fairly Timber & Hardware Limited to taxation.
18.The Appellant argued that since Nairobi Fairly Timber & Hardware Limited paid all taxes due, and the company is tax compliant there were no pending tax assessments against it, and bearing in mind that the Respondent is attempting to tax funds on its director’s account, the Respondent was unlawfully subjecting the company to double taxation.
19.The Appellant stated that since subjecting the deposits from Nairobi Fairly Timber & Hardware Limited in the Appellant’s bank means that the Respondent is subjecting the Nairobi Fairly Timber & Hardware Limited to double taxation without assessments. She also noted that it translates to unfair trial contrary Article 25 (c) of the Constitution because the company is being forced to pay taxes when it has not been assessed for the same.
20.The Appellant further stated that the Respondent has also denied the company fair hearing contrary to Article 50(1) of the Constitution because its funds were subjected to double taxation without assessments therefore, the company cannot rebut the assessments. In addition, without assessments on the company, the Respondent has infringed Article 47 of the Constitution because the Respondent subjected the funds from the company to double taxation without adhering to dictates of fair administrative action leading to unlawful demand of taxes.
21.The Appellant stated that by demanding taxes on funds deposited in the Appellant’s bank account on behalf of Nairobi Fairly Timber & Hardware Limited is tantamount to subjecting Nairobi Fairly Timber & Hardware Limited to double taxation when the said company already paid taxes on the same funds while subjecting the Appellant to unlawful taxation because funds in the Appellant’s bank account belonged to Nairobi Fairly Timber & Hardware Limited; yet the funds are no longer in the Appellant’s account as the amount was wired to the company’s bank account.
22.The Appellant maintained that the Respondent vide a letter dated 19th July 2023 unlawfully found that the Appellant operates timber sales from January 2017 yet the Appellant has never operated timber sales. Instead, Nairobi Fairly Timber & Hardware Limited operates timber sales which company is registered for VAT and has been paying for VAT religiously. Therefore, the Respondent erred in treating the Appellant and Nairobi Fairly Timber & Hardware Limited as one legal entity which is contrary to tenets in Salomon vs Salomon (supra).
23.The Appellant stated that due to Respondent’s misapprehension and misunderstanding of the law by treating the Appellant and Nairobi Fairly Timber & Hardware Limited as one legal entity, the Respondent has unlawfully slapped the Appellant with VAT taxes and penalties since 2017.
24.The Appellant averred that the Respondent erred in law and fact in finding that the Appellant had qualified for VAT responsibility yet the deposits in the Appellant’s bank account were not hers, but the funds were received on behalf of Nairobi Fairly Timber & Hardware Limited pursuant to a company resolution of the said company of 2nd January 2015. If the Respondent had considered that the Appellant was holding the funds on behalf of Nairobi Fairly Timber & Hardware Limited, the Respondent would have established that the Appellant had not qualified for VAT registration. The Respondent totally misdirected itself.
25.It was the Appellant’s case that she was unable to defend herself effectively because the Respondent issued one assessment but for two taxpayers that is the Appellant herein and another taxpayer called Simon Kamau Ndungu. Consequently, the assessment did not reveal who between the Appellant and the other taxpayer is responsible for monthly income rent. The Respondent has caused confusion by issuing joint assessments.
26.The Appellant argued that she paid all taxes due therefore; no tax has been lost. Further, she averred that she provided all documents in relation to the assessments. The documents included excel sheet for all bank account transfers, cash deposits, unpaid cheques, information on rent and all appendices to enable the Respondent to make an accurate decision but the Respondent ignored the documents in favour of estimations resulting to a wrong and unlawful tax decision. Instead of analysing the documents keenly, the Appellant asserted that the Respondent resorted to cherry picking what document to analyse hence unfairly rejecting other documents without justification.
27.The Appellant averred that if the Respondent had taken time to analyse the documents, the Respondent would have noticed that no tax was lost. The Appellant stated that the Respondent erred in law and fact in demanding the Appellant to provide internal records for companies that the Appellant is not associated with and for companies that the Respondent had not assessed for taxes. She averred that this problem begun through the Respondent’s letter dated 6th March 2023 when the Respondent issued investigations findings concerning the Appellant and Montana Guest Resorts Limited. She further averred that she did not issue tax assessments against Montana Guest Resorts Limited neither did the Respondent issue not issue tax assessments against Nairobi Fairly Timber & Hardware Limited yet the Respondent expected the Appellant to produce documents in relation to those companies.
28.The Appellant also stated that the Respondent failed to adjust funds in the bank account to take into account the facts and that the funds the Respondent terms as ‘income’ includes fund transfers from the Appellant’s account to Appellant’s own accounts, transfers of funds from Appellant’s husband and transfers from Nairobi Fairly Timber & Hardware Limited. These interbank transfers are not incomes for the purposes of VAT therefore, are not taxable. The Respondent ought to have adjusted these transfers but the Respondent failed to do so.
29.It was the Appellant’s case that whereas the Respondent acknowledged that some of the funds in the bank account were deposits emanating from disposal from sale of personal properties, the Respondent still failed to deduct entire amounts in relation to disposal of personal property.
30.The Appellant stated also that whereas the Respondent issued assessment relating to the period from 2017 to 2022, the Respondent erred in law and fact in failing to issue assessments for the year 2022 since the assessments ends at the year 2021. Whereas the assessments run to 2021, the Respondent demanded that the Appellant produces documents in relation to 2022 taxes. When the Appellant could not produce documents in relation to the year 2022, the Respondent invalidated the objection. This makes the assessments and the objection decision erroneous in law.
31.The Appellant maintained that the Respondent requested for documents in relation to time barred assessments which according to the Appellant, and that the Appellant was not in possession of those documents due to Section 29(5) and 31 (4)(b) of the TPA since Section 23 (1)(c) of the TPA requires a tax payer to retain tax documents for not more than 5-years. The Appellant therefore, argued that she could not produce documents for the assessments in relation to taxes of 2016, 2017, 2018 and 2019 which the Respondent requested in 2023.
32.Finally, the Appellant stated that the Respondent ignored documents that the Appellant provided such as company resolution of 2nd January 2015 and workings that the Appellant provided. She averred that this ignorance of facts led the Respondent into unlawfully treating the Appellant and Nairobi Fairly Timber & Hardware Limited as one and the same legal entity.
33.The Appellant in her submissions relied on the case of Gitere Kahura Investments Ltd v Commissioner of Domestic Taxes TAT no. 16 of 2019 to support the preposition that tax assessments have to be issued within 5 years. The Appellant also cited the case of Salomon v Salomon [1896] UKHL 1, [1897] AC 22 to submit that the Respondent unlawfully treated the Appellant and the company as one legal entity. The Appellant therefore, argued that the Respondent erred in its assessments.
Appellant’s Prayers
34.The Appellant urged the Tribunal to set aside the assessments and the objection decision dated 16th October 2023; to compel the Respondent to deregister the Appellant from VAT obligation and all taxes and penalties be set aside.
Respondent’s Case
35.The Respondent’s case is premised on its Statement of facts dated and filed on 15th December 2023 and files on 19th December 2023. The Respondent also filed its written submissions dated 1st August 2024 on 2nd Augsut, 2024 and the same were adopted by the Tribunal on 11th September, 2024.
36.The Respondent pleaded that it received information that the Appellant received large deposits in its bank account and that the deposits in the bank account were proceeds from sale of timber and rent. It pleaded that it carried out a review into the tax affairs of the Appellant for the period 2017-2021.
37.The Respondent determined the Appellant’s gross profit from her banking income. It stated that it compared the gross profit with the income declared.
38.The Respondent averred that its investigations revealed the Appellant in her role as the Director of Nairobi Fairly Timber and Hardware earned income but underdeclared it. From this information, the Respondent stated that it computed both income tax and Value Added Tax, which amounted to Kshs. 74,008,571.00. According to the Respondent, the Appellant lodged her objection to the Assessments on 18th August, 2023 and contended that she was never involved in the sale of timber as an individual but was receiving income on behalf of Nairobi Fairly Timber & Hardware Limited therefore, contended that adjustments needed to be made on the gross banking deposits as they were not income in nature.
39.The Respondent stated that it rejected the objection and upheld the assessments on the basis that the Appellant failed to avail relevant documentation in support of the objection. The Respondent pleaded that the Appellant did not and/ or have not availed any documentary evidence to support all the contentions to substantiate her objection.
40.The Respondent pleaded that the Appellant had an obligation to prove that not all deposits in her bank accounts were income. The Respondent added that the burden of proof that an assessment is excessive and/or erroneous lies with the appellant under section 56(1) of the TPA. The Respondent pleaded that in the absence of relevant documents it was left with no option but to rely on information available to it. Therefore, the Respondent argued that its decision is not flawed as alleged by the Appellant.
41.In its written submissions, the Respondent cited the case of Commissioner of Domestic Taxes v Altech Stream (EA) Limited [2021] eKLR to submit that Section 31(1) of the TPA allows it to make an assessment based on such information as may be available and to the best of his judgement.
42.The Respondent submitted that the additional assessments are not time barred since the Respondent commenced investigations in 2022 and the investigation findings communicated in the letter dated 6th March 2023 covered the years 2016 to 2022. It therefore argued that the inquiry was well within the provisions of Section 29 (5) of the TPA. The Respondent submitted that the Appellant was not filing returns wilfully. The Respondent also cited the cases of Tumaini Distributors Company (K) Limited and Commissioner of Domestic Taxes and Boleyn International Limited versus Commissioner of Investigations & Enforcement (Tax Appeal Tribunal No 55 of 2019), Rongai Tiles and Sanitary Ware Limited versus Commissioner of Domestic Taxes (Tax Appeals Tribunal No 163 of 2017) to submit that the Appellant has a duty to provide documentary evidence in support of her case but failed to discharge her duty.
43.The Respondent maintained that the Appellant failed to discharge its burden of proof.
Respondent’s prayers
44.The Respondent prayed that this Tribunal be pleased to uphold the objection decision dated 16th October, 2023 and that the Appeal be dismissed.
Issues for Determination
45.The Tribunal having considered the parties’ pleadings, documents and written submissions puts forth the following issues for determination:a.Whether the Appellant received funds on behalf of Nairobi Fairly Timber and Hardware Limited.b.Whether the assessments were statutorily time barred.c.Whether the Respondent’s Tax decision dated 16th October 2023 was justified.
Analysis and Findings
46.The Tribunal wishes to analyse the issues as hereunder.
a. Whether the Appellant funds income on behalf of Nairobi Fairly Timber and Hardware Limited.
47.The Tribunal notes the Appellant’s case that the Respondent misdirected itself in finding that she had qualified for VAT on grounds that she received income from Nairobi Fairly Timber & Hardware Limited but did not declare the same. The Appellant admitted that she received funds from the said company but submitted that the deposits in the Appellant’s bank account were hers but the funds were received on behalf of Nairobi Fairly Timber & Hardware Limited pursuant to the company’s resolution of 2nd January 2015.
48.The Tribunal also notes the Appellant’s submission that if the Respondent had considered that she was holding the funds on behalf of Nairobi Fairly Timber & Hardware Limited, the Respondent would have established that the Appellant did not qualify for VAT registration and that the VAT assessments would not have arisen.
49.The Tribunal further notes that the Respondent did not challenge these averments in its statement of facts. However, in its written submissions, the Respondent submitted that the Appellant adduced as evidence, minutes that were not signed by the Principal and urged the Tribunal to disregard the annexure.
50.The Tribunal notes that there were was no dispute between the parties as to the fact that the Respondent assessed the Appellant on VAT based on deposits in the Appellant’s bank account from Nairobi Fairly Timber & Hardware Limited. Since this is the case, the Respondent’s assessments would be not only be illegal, but also unlawful because a company and its directors are two separate legal persons and the two cannot be treated as one and the same. This legal principle, of corporate personality was outlined and established in the case of Salomon v Salomon [1896] UKHL 1, [1897] AC 22.
51.The Tribunal examined the Appellant’s annexures and noted that a specific annexure marked TWK-5 was composed of two documents. First, a Commission Agency Agreement dated 10th January 2015 and signed by Simon K. Ndungu and the Appellant but not signed by Martin Kitili, the representative of the Principal and second, the annexure contained a resolution of the Nairobi Fairly Timber & Hardware Limited dated 2nd January, 2015 duly signed by the Directors, one of whom was the Appellant.
52.The Tribunal has not taken into consideration the Commission Agency Agreement at this Juncture. However, the Tribunal is of the view that the issue in contention is whether the Appellant received funds for and on behalf of Nairobi Fairly Timber & Hardware Limited. The Appellant has demonstrated that the funds she received belonged to Nairobi Fairly Timber & Hardware Limited by adducing Minutes of a meeting of directors of Nairobi Fairly Timber & Hardware Limited as evidence.
53.Pursuant to the Companies Act, CAP 486 of the Laws of Kenya, companies make their decisions by making resolutions during board or member meetings. The Respondent did not challenge the minutes that the Appellant had adduced as evidence. The Tribunal upon examining the said minutes noted that Resolution 06/2015 indicated that Nairobi Fairly Timber & Hardware Limited, authorised its directors to use their respective personal Mpesa and bank accounts to transact timber business on its behalf. In view of these findings, the Tribunal has not difficulty in its determination that the Appellant received the income on behalf of Nairobi Fairly Timber & Hardware Limited.
54.The Tribunal having made its determination finds that the Respondent subjected the funds in the Appellant’s accounts to VAT illegally. The further finding of the Tribunal is that the Respondent unlawfully treated the Appellant and Nairobi Fairly Timber & Hardware Limited as one and the same person. It follows that the VAT assessments were unlawfully carried out on the Appellant. The Tribunal makes the further finding that the Respondent’s decision to recruit the Appellant for VAT through a letter dated 19th July 2023 is illegal.
55.The Respondent also subjected the Appellant to income tax based on the deposits received from Nairobi Fairly Timber & Hardware Limited. The Respondent at paragraphs 6 and 7 of its statement of facts stated as follows:
56.The Tribunal having determined that the income in the Appellant’s account was that of Nairobi Fairly Timber & Hardware Limited, finds that the Appellant could not be assessed for those taxes as the Respondent sought to do.
56.The Tribunal has herein identified two other issues for its determination and will not delve into their determination as the same have been rendered moot.
Final Decision
57.The upshot to the foregoing is that the Appeal succeeds and consequently the Tribunal makes the following Orders:a.The Appeal be and is hereby allowed.b.The Respondent’s letter dated 19th July 2023 registering the Appellant for VAT be and is hereby expunged.c.The Appellant’s VAT obligation be and is hereby annulled.d.The objection decision dated 16th October 2023 be and is hereby set aside.e.Each party to bear its own cost.
58.It is so ordered.
DATED AND DELIVERED AT NAIROBI ON THIS 21ST DAY OF NOVEMBER, 2024.CHRISTINE A. MUGA - CHAIRPERSONBONIFACE K. TERER - MEMBERELISHAH N. NJERU - MEMBEREUNICE N. NG’ANG’A - MEMBEROLOLCHIKE S. SPENCER - MEMBER