Kingsley Construction Company Limited Vs Commissioner of Domestic Taxes E280 of 2024(2025)

In the referenced case, the Tax Appeals Tribunal (Tribunal) reiterated that where the Kenya Revenue Authority (KRA) had failed to ascertain and determine a Taxpayer’s refund application within 90 days, the same was deemed as ascertained and approved. This was line with the provisions of Sections 47(3) of the Tax Procedure Act (TPA) which mandated the Commissioner to notify an applicant of its refund decision within 90 days of receiving the application for a refund.

In the present case, Kingsley Construction had made various refund applications for corporation tax in 2016, 2018, 2019 and 2021. The findings of the said refund applications were issued by the KRA on 2nd November 2023 wherein the KRA subsequently raised additional tax assessments as against Kingsley.

In its analysis, the Tribunal noted that as per the provisions of Section 47(3) of the TPA, the same used the words “shall” which meant that the same was a command and bestowed a mandatory obligation on the KRA to act. As such, the KRA had no room for discretion as regard its obligations to issue a refund decision within 90 days. Based on the facts thus, and noting that the KRA had issued its decision in 2023 and yet the refund applications had been made and acknowledged by the KRA in 2016, 2018, 2019 and 2021, the Tribunal held that all the refund applications made by Kingsley were allowed by operation of the law and the additional assessments made on 2nd November 2023 were null and void for having been issued past the 90 days timeframe.

From the foregoing judgment, it follows that Section 47(3) of the TPA makes it a mandatory obligation on the KRA to issue its refund decision within 90 days failure to which the same is deemed allowed by operation of the law. Taxpayers are thus are urged to be vigilant in terms of taking count of the timelines that the refund decisions are issued by the KRA.