The Tax Appeals Tribunal has dismissed Kazimoni Auto Tyres Ltd’s application seeking to file its tax appeal out of time to challenge KRA’s Kshs.172, 382, 355 tax demand.

The KRA carried out a tax compliance audit of the taxpayer and issued an additional assessment for the sum of Kshs.172, 382, 355 on Corporation tax and VAT. Kazimoni Auto Tyres Ltd objected to the assessment and the Commissioner requested the taxpayer to provide documents to support its objection. However, the taxpayer failed to provide the documents and the Commissioner proceeded to confirm the assessment in his decision dated 18th February 2019 to the taxpayers’ objection. The taxpayer did not appeal against the decision on the objection within the statutory period of thirty days.

On 11th July 2019, the taxpayer applied to the Tribunal requesting for an extension of time to appeal against the decision on the objection decision on the grounds that its director had travelled out of the country and was unable to issue directions on the matter.

In its ruling delivered on 22nd January 2021, the Tribunal held that an extension of time is not a right but an equitable remedy issued at the discretion of the Tribunal upon consideration made on a case-to-case basis. The Tribunal was emphatic that the delay must be reasonable and that the application for extension of time must be brought without undue delay. Further, it is the burden of the party seeking extension of time to lay the basis of its application to the satisfaction of the Tribunal.

From examination of the taxpayer’s records, the Tribunal found that although there were times that the taxpayer had travelled out of the country, there was no clear evidence that the taxpayer’s director had been out of the country continuously for the entire period. This time did not include the time from it was served with the objection decision to the time when it ought to have lodged its appeal as well as the time when the application for extension of time was filed. The Tribunal further noted that the taxpayer had failed to prove that the director was out of the country to seek medical assistance at the material time as evidence was not availed to the Tribunal.

The ruling by the Tribunal underscores the importance of adherence to statutory timelines set out in Section 13 of the Tax Appeals Tribunal Act.

Commissioner, Legal Services and Board Coordination