On the importance of strict procedural compliance in tax disputes: The Case of Browndot Enterprise Limited v Commissioner of Domestic Taxes - Tax Appeal E052 of 2025

Browndot Enterprise Limited v Commissioner of DomesticTaxes - Tax Appeal E052 of 2025 | [2025] KETAT 253 (KLR)

Parties

• Appellant: Browndot Enterprise Limited
• Respondent: Commissioner of Domestic Taxes (Kenya Revenue Authority - KRA)

Background

Browndot Enterprise Limited appealed against a tax assessment issued by the Commissioner of Domestic Taxes. The dispute arose from alleged non-compliance with tax obligations, where the KRA had raised additional tax assessments covering VAT and income tax.

The appellant objected to the assessments, but the Commissioner issued an objection decision upholding them. Browndot then filed this appeal before the Tax Appeals Tribunal, challenging both the merits of the tax assessment and the validity of the Commissioner’s decision.

Key Legal Issues

1. Whether the appeal was properly before the Tribunal – examining compliance with timelines and procedure under the Tax Procedures Act.
2. Whether the tax assessments issued by the Commissioner were lawful and justified.
3. Whether the appellant had discharged the burden of proof in challenging the assessments.

Tribunal’s Analysis

• The Tribunal found that the appellant had complied with the procedural requirements, including filing the notice of objection, appeal, and statement of facts within the statutory timelines.
• On the merits, the Tribunal held that the appellant failed to provide sufficient and credible evidence to challenge the assessments.
• The tax assessments issued by the KRA were presumed to be correct, and the appellant did not rebut that presumption with adequate documentation or explanations.

Decision / Holding

• The appeal was dismissed.
• The Tribunal upheld the Commissioner’s tax assessments in full.
• Browndot Enterprise Limited was found liable for the assessed taxes.

Significance

This case underscores:

• The importance of strict procedural compliance in tax disputes.
• The burden of proof lies squarely with the taxpayer to disprove KRA’s assessments.
• Even where timelines are met, substantive evidence is critical to succeed in tax appeals.