BTB Insurance Brokers Ltd v Commissioner of Domestic Taxes (Civil Appeal 268 of 2020) [2026] KECA 1611 (KLR)

The Tribunal's Chairman directed that the respondent's preliminary objection on res judicata be dealt with first, before the question whether the respondent had a right of audience. The parties filed submissions on the preliminary objection only, yet on 16th November 2016 the Tribunal delivered judgment dismissing the appeal in its entirety, purporting to decide a substantive appeal no party had argued. Deciding an appeal the parties had not been heard on violated the express right in section 26 of the Tax Appeals Tribunal Act to present one's case and the Article 50(1) constitutional guarantee of a fair hearing.

The learned Judge observed that the Tribunal, after receiving submissions on the preliminary objection, appeared to deliver a judgment considering first the objection and then the substantive appeal, conceding that 'Whether indeed parties were heard on the substantive appeal is not clear to me.' Despite identifying that doubt on a fundamental issue raised by the appellant, she made no finding on it. The Court, having confirmed from the proceedings that the substantive appeal was not heard before the Tribunal delivered its judgment, held that the Judge erred in failing to find a violation of the right to a fair hearing.

The Court emphasised that its appellate jurisdiction in tax matters is circumscribed by section 56(2) of the Tax Procedures Act, which confines appeals to the High Court and the Court of Appeal to questions of law. Relying on Kenya Breweries Ltd vs. Godfrey Odoyo, it stated that on second appeal it must resist the temptation of delving into matters of fact unless the two courts below considered matters they should not have considered, failed to consider matters they should have considered, or the entire decision is perverse. This framing directed the Court to the procedural fairness question rather than the merits of the assessment.

Having found that the Tribunal's decision was reached in breach of the right to a fair hearing, the Court declined to engage the remaining grounds, which went to the merits of the excise duty assessment and to procedural complaints such as the statement of facts filed out of time. It held that the only recourse was to return the matter to the Tribunal for hearing and determination of the substantive issues on merit. Accordingly, it set aside the High Court judgment and decree that had upheld the Tribunal's outcome and awarded the appellant costs in both courts.