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JR No. 165/2014 PUBLI. KENYA IN THE HIGH COURT OF KENYA AT NAIROBI uD! L_ REVI VISTI JR CASE NO. 165 OF 2014 REPUBLIC sessecssessseees VERSUS KENYA REVENUE AUTHORITY ... EX-PARTE TONONOKA STEELS LIMITED ss: RESPONDENT JUDGMENT. The ex-parte Applicant, Tononoka Steels Limited, is a limited liability company involved in the production: and manufacture of steel profiles and allied products: The Respondent, Kenya Revenue Authority, is a statutory body. established under the Kenya Revenue Authority, Act Cap 469, Laws. of Kenya ‘as: an, agency of the Government of Kenya for the assessment, cdllection and accounting of revenue in accordance with the laws ‘identified in the establishing act. Upon obtaining the leave of the Court, the Applicant filed the notice of motion dated 15" May, 2014 seeking orders as follows: “L.This Honourable Court be pleased to grant the Applicant an ORDER OF CERTIORARI to remove into the High Court and quash the decision made by the Page 1 of 25 JR No, 165/2014 Respondent to reject the deductions lawfully made by the Applicant. 2.This Honourable Court be pleased to grant the Applicant an ORDER OF CERTIORARI to remove into the High Court and quash the decision made by the Respondent requiring the Applicant to pay the Respondent Kshs.40,311,432/= as Corporation tax. 3.This Honourable Court be pleased “to grant the applicant an ORDER OF PROHIBITION directed to: the Respondent prohibiting it, whether by itgelf, its agents, and/or its servants or otherwise: howsoever from purporting to reject the deductions lawfully, made by the Applicant..” 4.This Honourable:“Court be, pleased to grant the Applicant an ORDER OF PROHIBITION directed to the Respondent prohibiting ity..whether by itself, its agents, and/or its servants or otherwise howsoever from= purporting to take any action against the Applicant in an attempt to recover the total sum of Kshs. 40,311/432/= 5.This. Honourable Court be pleased to grant the Applicant an ORDER OF PROHIBITION directed to the Respondent prohibiting it, whether by itself, its agents, and/or its servants or otherwise however from purporting to take any other action that may amount to a violation of the rights of the Applicant. 6.This Application do operate as stay of the said decision to require the Applicant pay Kshs.40,706,790/= being an aggregate sum inclusive of Corporation Tax, VAT and Withholding Tax. Page 2 of 25 JRNo. 165/2014 7.Cost be provided for.” ‘The application is supported by the statutory statement and the verifying affidavit of the Applicant’s CEO Rayagopalan Sathyamoorthy which were filed in Court together with the chamber summons application for leave on 28" April, 2014, The Applicant's case is that between 2008 and 2012 it claimed various tax deductions which included: a) Construction of a Factory Building at-the cost, of Kshs.46,588,261; b) The construction of a. Factory “Building “at the cost of Kshs,59,892,218; and’ 2) ¢) The building of Factory Building at the cost of Kshs.36,732,453, The tax deductions, were claimed in compliance with Section 15 of the Income Tax Act, Cap 470 (the “Act”), as read together with the provisions of the Second Schedule of the same Act, as capital expenditures made by the Applicant during the period in question. ‘The Respondent disallowed the Applicant's claim on the ground that the same were investment deductions and were not therefore allowable under paragraph 24 of the Second Schedule to the Act. The Respondent then proceeded to demand immediate Payment of the sum of Kshs.40,311,432 by the Applicant. Page 3 of 25 JR No. 165/2014 It is the Applicant's case that the interpretation of the law by the Respondent is incorrect and based on malice and bad faith. The Applicant also holds the view that the demand made by the Respondent is irregular as no formal assessment was done by the Respondent as required by Section 73 of the Act. Further, that the Respondent has issued to the Applicant compliance certificates and the new claim is an attempt to extort additional money from the Applicant: According to the statutory statement the Applicant therefore seeks relief on the grounds that: “a)The said decision by the Respondent is grounded on fundamental errors of fact. b) The said decision is based on a clear misunderstanding of the relevant provisions of the Income Tax Act as will be shown at a later stage, ©) The said decision such that no sensible and logical person could have arrived at the same decision. d) The Respondents are acting unreasonably, being manifestly unjust, acting in bad faith, and perpetrating oppressive and gratuitous interference with the rights of the applicant. €) The said decision is actuated by bias, bad faith and improper motive upon the applicant. f) That the said decisions are made ultra vires and in excess of jurisdiction of the Respondent.” grossly unreasonable and irrational Page 4 of 25 JR No, 165/2014 The Respondent opposed the application through an affidavit sworn on 12" June, 2014 by Mr. Charles Cheruiyot the Assistant Manager — Special Audits of the Domestic Taxes Department — Large Taxpayers Office. In his affidavit Mr, Cheruiyot avers that acting on the powers granted by Section 56 of the Act, he issued the Applicant with a Notice to carry out audit for the years of income 2008-2011 for the | ribose of éstablishing whether the claims made by the Applicant on. self SsgitGmaliis were in compliance with the law. He avers.that although the year 2012 was not Profiled for auditing, it was factored in at the. request of the Applicant during the opening meeting held with the Respondent on 11" November, 2013. He deposed: that the. audit of the Applicant's documents and records revealed that the Applicant had not fully complied with the requirements of the Act. According to the Respondent, the first meeting held on 18” November, 2013 revealed. that the buildings constructed in 2008 and 2011 represented by Nail Making Building and Galvanizing Building respectively were being used for the purpose of manufacture and other Purposes. The Respondent was of the opinion that the capital cost as claimed ought to have been apportioned accordingly to reflect the use of Page 5 of 25 JR No, 165/204 156,837. In response to the objection, the Respondent through a letter dated 28" April, 2014 stood over all the disputed taxes, The Respondent contends that the Applicant has two sources of income to wit business income from manufacture and sale of steel and its products and rental income earned from renting out one of the buildings (Dynaplast Building) to its sister company, Dynaplast Limited for her.own use. The Respondent is of the view that the Applicant's ‘failure to disclose such material facts was mischievous asit affected the treatment of capital expenditures on building: This.nondisclisure also breached Section 15(7)(a) of the Act’ which requires’ separate declaration of incomes according to the source’ it is. derived from. He averred that business income arid réntal income.as listed by Section 15 (7) (e) of the Act are separate sources of income. It is the Respondent's case that the Applicant: id nk disclose other specified_sources. of income in.2014.-but. only declared business income. The Respondent's case is that although capital deductions are allowable, the said deductions are subject to certain restrictions as provided by Section 15(1) of the Act and paragraph 24(3)(a) of the Second Schedule of the same Act. Page 7 of 25 JR No, 165/2014 Mr. Cheruiyot averred that since the Dynaplast Building had been leased out, then the cost of its construction ought to have been deducted against rental income and not business income. Further that the Applicant had used the other two buildings (Nailing Making and Galivanizing) not only for manufacture but partly for other purposes and it is only the portion used for manufacturing and manufacturing activities that could benefit from investment deduction. ~~" * The Respondent's case is that the portion used.fc manufacture is that portion where machinery used..for making nails and galvanizing is installed whereas the other: Portion" was used for storage of raw materials and finished goods and-this ‘is what the Respondent construed as other purposes. The “Respondent therefore allowed investment deduction on ‘that part represented by manufacture and disallowed investment::deduction for. the. portion used. for _other..nurposes. -i.e.. storage. The Respondent asserts that after the calculations were done additional assessments were issued to the Applicant under Section 77 of the Act. The Respondent contends that the fact that the Applicant lodged a notice of objection to the assessments within the statutory timeline is Page 8 of 25 JR No. 165/2014 evidence of acknowledgement of the validity of the assessments as per by Section 73 of the Act. On the issue of the issuance of a tax compliance certificate, Mr. Cheruiyot deposed that the Kenyan tax regime is based on self assessment and a tax compliance certificate is issued on the basis of returns filed by the taxpayer. He therefore asserts that the fact that, the Respondent issued a tax compliance certificate to ‘the Applicant does not stop the Respondent from inquiring into, the tax affairs of the Applicant. Further that the certificate is normally issued to ease conduct of business by taxpayers with a caveat that’ the Respondent may withdraw it if new evidence materially alters the tax compliance status of the taxpayer. He argues that the certificate excludes additional assessments, as assessment for additional taxes is done by the Commissioner. tis Gic Responder ise that ail actions were Gore ‘if’ Good Yaitiy arid the Applicant was given an opportunity to be heard. Further, that the Applicant had not exhausted the statutory mechanisms for addressing grievances before coming to Court. It is the Respondent's case therefore that the orders sought are not available to the Applicant in the circumstances of this case. Page 9 of 25 JR No. 165/2014 The question to be answered in these proceedings is whether the additional taxes demanded from the Applicant by the Respondent were assessed in compliance with the law. Any other issue will be a sub-issue Of this core issue, A close perusal of the Applicant's case shows that, the Applicant is aggrieved by the Respondent's decision to disallow its investment deductions in respect of three buildings. The Applicant is of. the view that in making its decision, the Respondent. misinterpreted. the tax laws and in particular Section 15 of the Act and paragraphs 1, 7 and 24 of the Second Schedule. jo Without further ado, L will therefore Proceed to reproduce the revelant provisions. Section 15 of the Act provides: - " G4) For the purpose of ascertaining the total income of a /ear of Income there shall, subject ta section 16, be deducted all expenditure incurred in that year of income :which is expenditure wholly and exclusively incurred by him in the production of that Income, and where under section 27 any income of an accounting Period ending on some day other than the last day of that year of income is, for the purpose of ascertaining total income for a year of income, taken to be income for a year of income, then the expenditure incurred during that period shall be treated as having been incurred during that year of income, Page 10 of 25 JR No, 165/2014 (2) Without prejudice to subsection (1), in computing for a year of income the gains or profits chargeable to tax under section 3(2)(a), the following amounts shall be deducted — (au (b) amounts to be deducted under the Second Schedule in respect of that year of income; (bb). (7) Notwithstanding anything contained in this A (a) the gains or profits of a person derived from one of the six sources of income respectively specified:in paragraph (e) of this subsection (and in this subsection called “specified sources") shall be computed, separately from the gains or profits of that person derived from any other of the specified sources and separately from any other income of that person;: Paragraphs 1, 7_and"24-of the Second Schedule provide clarification. 1.(1) Subject to this schedule, where a person incurs capital expenditure on the construction of an industrial building to be used in a business carried on by him or his lessee, a deduction equal - (@).. Provided that - Page 11 of 25, JR No. 165/2014 (i) where the building was so used for part only of that year of income, the deduction shall be proportionately reduced; (ii) where the building is sold and continues to be an industrial building used by the purchaser or his lessee, the deduction shall thereafter be made in computing the profits or gains. of that Person for any year of income in which the building is so used; (ili) where any deductions ‘in respect of that capital expenditure are deductible in accordance with paragraph 24, 24A or 24B the deductions under this paragraph shall be made by reference to that capital expenditure reduced by the amount of those deductions; (iv) :where in any year of income an amount has in accordance’ with paragraph 24A(3) been treated as a / trading receipt; Wietiéduttions tinder this paragraph shair ” be made by reference to that capital expenditure reduced by any deduction made in accordance with paragraph 24 and. that expenditure shall be deemed to have been incurred in that year of income.” Paragraph 7 states that: 7.(1) Subject to this Part, where, during a year of income, machinery owned by a person is used by him for the Purposes of his business, there shall be made in Page 12 of 25 JR No, 165/2014 computing his gains or profits for that year of income a deduction (in this Part referred to as a "wear and tear deduction” @). Paragraph 24 provides as follows: “24,(1) Subject to this Schedule, where capital expenditure is incurred — (a) on the construction of a building and on the purchase ) and C installation therein of new machinery, afid. the: owner of that machinery, being also the owner of lessee of that building, uses that machinery in that building for the Purposes of manufacture; or (b) . (3) For the purposes of this paragraph - (@).where, under paragraph 24(1)(a) or paragraph _24(1)(@), a: building, is used partly for the purposes of oes pantifacture:& expenditure on which the deduction in respect of the building is calculated shall be the capital expenditure attributable to that portion of the building which is used for the purposes of manufacture; but where the capital expenditure so attributable exceeds nine-tenths of the total capital expenditure incurred on the construction of the building the whole building shall be treated as used for purposes of manufacture; ‘paldy “for Wither purposes, the capita” () sree Page 13 of 25, JR No, 165/2014 "installation" means affixing to the fabric of a building in a manner necessary for and appropriate to the proper operation of the machinery concerned or otherwise setting up the machinery for use as may be appropriate for the type of machine; "machinery" means machinery and equipment used directly in the following ancillary purposes ~ (@ generation, transformation and distribution of electricity; 1%. < oO (ii) clean-up and disposal of effluents and ‘other waste products; - (ili) reduction of environmental damage; » (iv) water supply or disposal; and, (v) Workshop machinery. for, the maintenance of the machinery. "manufacture" means the making (including packaging) of goods or materials. from raw or partly manufactured materials or other goods, or the generation of electrical ora ene gy Tok supply 2% nai" grid’ “Orth transformation and distribution of electricity through the national grid but does not extend to any activities which are: ancillary to manufacture, such as design, storage, transport or administration;” From the pleadings, the Applicant's case is that the deductions disallowed by the Respondent were allowed by paragraphs 1, 7 and 24 of the Second Schedule. Page 14 of 25 JR No. 165/2014 T have gone through the correspondences between the Applicant and the Respondent and it is clear that there is no dispute that the deductions made by the Applicant were indeed allowed by paragraph 24 of the Second Schedule. The dispute concerns the method of calculation of the deductions. The Applicant is of the opinion that the Respondent has misinterpreted paragraph 24 of the Second Schedule. What is the principle for interpreting tax statutes? That principle was clearly enunciated by Alnasnir Visram,, Jp i his isserting judgement in STANBIC BANK KENYA LIMITED vy, KENYA REVENUE. ‘AUTHORITY, Court of Appeal at Nairobi Civil Appeal No.°77 of 2008 where he stated that: “I would wish'to repeat again what I said in the case of Commissioner of Income. Tax.vs Westmont Power (K) Ltd (2006):1°EA.54,that taxation laws that have the effect of deptiving citizens of thair property by imposing pecuniary burdens esulting: also Penal consequences must be iount that their” provisions must be express and clear so as to leave no room for ambiguity. Any ambiguity in such a law must be resolved in favour of the taxpayer and not the public revenue authorities which are responsible for their implementation.” T agree that tax statutes ought to be drafted with utmost clarity in mind and where there is any doubt about any clause in a tax proivision that doubt should be resolved in favour of the taxpayer. Payment of taxes is Page 15 of 25 JR No. 165/2014 not a charitable gesture. It is a statutory obligation and tax payment should therefore be made easy. Having said so, I will now turn back to correspondences to establish why the Respondent disallowed certain deductions by the Applicant. Through a letter dated 28" March, 2014 addressed to the Applicant the Respondent at pages 1, 2 and 3 explained its decision as follows: “Re investment deduction audit - years 2008 - 2012 A. Corporation Tax Investment deduction claims On inspection, examination and explariations provided on the buildings and machinery purchased and installed, we are satisfied that the:same: qualified for Investment Deduction @s claimed in the years of 2009, 2010 and 2012 with’ respect to building and machinery. These are provided for in tables 1 & 2 respectively. For the years: 2008 and 2011 we noted the following which has been further illustrated in table 3: 1, In the year 2008, a claim was made on the cost of the Nail Making Godown whose cost was Kshs.46,588,261, Audit established that half of that godown was used for manufacturing purpose while the other half was being used for storage of wire coils (raw materials) and the nails (finished goods). We considered the half portion of the cost of that godown used for manufacturing nails as qualifying for Investment deduction allowance (IDA), Page 16 of 25 JR No. 165/2014 while the half amounting to Kshs.23,294,130 used for storage purpose has been disallowed and provided with Industrial Building Allowance (IBA). 2. As for the year 2041, your IDA claim on the cost of Galvanising Building of kshs.59,892,218 found to be used 2/3 thereof tin the manufacture of galvanised metals and shearing purposes. The other hand 1/3 of it was used for storage of metal sheets, loading and offloading of materials to/from trucks. The costs of Kshs 19,964,072 associated with this 1/3 portion for other purposes has been disallowed from IDA and given IBA. Se 3. Also, in the same year 2011, Dynaplas Building. with a cost of Ksh.36,732,453 constructed aiid.rentéd out, to your sister company, Dynaplas:Limited;.was established that its cost was claimed under IBA:but on business source of manufacturing purposes as well as ‘of storage of finished and raw materials ofthe lessee. The machines used for cturing packaging goods occupied one quarter of the building and the rest was used for storage. We noted the ID. claimed thereon against business gains as exclusively incurred in earning that income in line with section 15(1) of the Income Tax (ITA). This is because that building is being used for earning rental income. Hence, expenses in relation therewith should only be claimed against that income as a separate source in line with subsection 15(7)(a) read together with subsection 15(7)(e)(i) of the ITA. Subject to the foregoing, we have disallowed the cost of the Dynaplast Building from ID claim under business income entirely in the sum of Ksh 36,732,453 and the same Page 47 of 25 JANo, 1685/2014 transferred to rental income. However, we also established that you did not declare rent as a separate source of income contrary to the law. Premised on above reasoning, the capital cost of the Dynaplast Building qualifying for IDA purposes is the portion where machinery was installed. This as pointed above is the quarter portion which translated to Ksh.9,183,113 qualifying for IDA and the balance of Ksh 27,549,340 representing storage or use for other.purposes qualifying for IBA all under rental income. The monthiy rental income charged on this building was Ksh 100,000 translating a to Ksh 1,200,000 per annum. We have allowed IDA and IBA on cost of Dynaplast building against above rental income whose computation is provided in table 4 below. We have allowed cost of the ‘Nail Making, Galvanising & Dynapiast buildings ID on:the qualifying portions in line with subparagraph 24(1)(c) of the 2" Schedule of the ITA. This is represented by the building area. where machinery was installed for purpose of ‘manufacturing activities. The non qualifying cost. was not allowed for reason that the areas sed for storage which is identified as an ancillary | manufacturing as provided for under graph 24(3)(¢) on the definition of *Manuifacturing’. In disallowing, we were also guided by subparagraph 24(3)(a) of the said Schedule, It should be noted that the Portions of costs disallowed were in excess of 10% of the occupied were cost/area of the respective buildings. 4, On inspection & examination of records, it was also noted that your company claimed the cost of the weighbridge under IDA. This was found to be contrary to the law. The reason being that equipment is not performing any manufacturing activity. Its purpose is the measuring the Page 18 of 25 JR No. 165/2014 weight of raw materials entering the company as well as of finished goods at point of sale, The function played demonstrate the equipment is not a machine being used either directly or for ancillary activities to manufacture as provide for in paragraph 24(3)(e) under the definition of “Machinery’ of the above Schedule. Based on the reason provided, the cost of that machine of Ksh 3,861,319 was disallowed from 1D claim and transferred to class IV of wear & tear Schedule for necessary allowances per Paragraph 7(3)(d) of the of the 2™ Schedule.” The letter clearly shows that the Respondent. in reaching the impugned decision was alive to the provisions “of. ‘Paragrar hs 1,:7 and 24 of the Second Schedule and correctly interprétéd. those provisions. The Applicant complained about the Respondent's interpretation and later filed an objection as provided by the Act. There is nothing to show that the taxman didnot understand the law. The decision of the Respondent is well explained to the Applicant. The cited laws allow a taxpayer to make" deaticions=for the Barts ‘of a ‘buildirig’ used “for thanufacturé- Purposes only. The meaning of the term manufacture is defined in the Second Schedule. I therefore conclude that the Respondent correctly interpreted the law in executing its mandate. The Applicant did complain that the demand for additional taxes was made without any assessment and this went against Section 73 (1) of the Act which provides that: Page 19 of 25 JR No, 165/2014 "73.(1) Save as otherwise provided, the Commissioner shall assess every person who has income chargeable to tax as expeditiously as possible after the expiry of the time allowed to that person under this Act for the delivery of a return of income. (2) Where a person has delivered a return of income, the Commissioner may - (a) () accept the return and deem the amount that persor has Oo declared as his self-assessment in which case no further notification need be given; or i) where the return is in respect of a year of income prior im on the basis to 1992, accept that return and assess | thereof; (b) if he has reasonable cause to believe that the return is not true.and correct, determine, according to the best of his judgement, the amount of the income of that person and assess him accordingly. son has not delivered a return of inicomie for a year of income, whether or not he has been required by the Commissioner so to do, the Commissioner considers that the person has income chargeable to tax for that year, he may, according to the best of his judgement, determine the amount of the income of that person and assess him accordingly; but the assessment shall not affect any liability otherwise incurred by that Person under this Act in consequence of his failure to deliver the return.” Page 20 of 25 JRNo, 165/2014 The Respondent on its part pointed out that the demand for additional taxes was in compliance with Section 77 and not Section 73 of the Act. Section 77 provides: "77, Where the Commissioner considers that a person has been assessed at a less amount, either in relation to the income assessed or to the amount of tax payable than that at which he ought to be assessed, the Commissioner may, by an additional assessment, assess that person at such additional amount as, according. to the. best of his judgement, that person ought to be assessed.” The letter dated 28" March, 2014'is indeed. clear’ that the demand is for additional taxes. I am in agreement with. the Respondent that the same was made under Section 77, Whatever the case, the parties are agreed that a tax assessment notice rtain things as was stated by Majanja, J in COMPANY LTD VATTORNEY GENERAL a3” OTHERS [2013] eKLR that: "A notice of the nature issued to enforce collection of taxes must clearly state to be such a notice, state the amount claimed, state the legal provision under which it is made and draw the taxpayer's attention to the consequences of failure to comply with the law and the opportunity provided by the law to contest the finding. Such a notice would give the opportunity to any Kenyan Page 21 of 25 JRNo. 165/2014 to know the case against it and utilise the legal provisions to contest the decision. The right to fair administrative action and the right of access of justice now enshrined in our Constitution demand nothing less.” I concur that a tax demand notice must indeed be very specific on the claim. The Respondent made its demand through its letter to: the Applicant dated 28" March, 2014. At the conclusion of the letter the Respondent states: “In conclusion, your company is called upon to'pay up the above taxes amounting..to Kshis.40,706,709 immediately to the Commissioner of Domestic Taxes. You are kindly'called, upon to tréat this demand letter as a notice of additional assessments in respect of Corporation Tax anid WHT and. VAT. At the moment we have challenges in raising’ the assessments through our computer-éystefi.” Besides, attention is drawn to your right €0 object to ab s the date of service of this notice in line with Section 35 (6 B) & (6.C) in case of WHT & 84(1) under the Income Tax Act: ‘assessments within 30 days from ‘As for VAT notice, you are also brought to the attention of your right to object to the tribunal within 30 days of service of this notice of assessment as provided for under Section 32A(1) of the VAT Act.” Page 22 of 25 JRNo. 165/2014 The said notice meets the parameters set by Majanja, J. I would hasten to add that even where a demand notice is not as clear as it should be it can still be implied that a taxpayer took it as an assessment notice by the way the taxpayer has reacted. In the case before this Court, the Applicant proceeded to file an objection. This shows that it understood the Respondent's demand for additional taxes. I therefore do not agree with the Applicant's suggestion that there was no aggessmient The Respondent's letter came with tables and extensive ‘explanation on how the figures under each tax head were On another point, the Applicant ‘submitted that-since the Respondent has issued it with tax compliance certificates, it is estopped from demanding further taxes. The decision of.G.V. Odunga, J in REPUBLIC V KENYA REVENUE AUTHORITY & ANOTHER EX-PARTE TRADEWISE AGENCIES [2013] eKLR Is cited in support of this position. In that case the learned Judge at paragraphs 30 and 31 of this judgement observed: “30,,Whereas this Court cannot hold that the applicant was not obliged to pay any taxes, the 1* respondent was expected to notify the applicant of any discovery of new evidence which was likely to materially alter the applicant's tax compliance status and hear the applicant's side of the story before taking an action which was contrary to its earlier conduct. Page 23 of 25 JR No, 165/2014 31, By not affording the applicant to explain its position after Issuing the tax compliance certificates, it is my view and I so find that the 1* Respondent was guilty of abuse of power.” The Applicant in the case before me was given an opportunity to be heard, The reasons for the assessment of additional taxes were clearly explained. The Applicant cannot therefore be heard to complain. In any case, the issuance of a certificate of compliante cannot bar the Respondent from collecting additional taxes where it is discovered that such taxes are due. As correctly “submitted by counsel for the Respondent, a tax compliance ort is essentially meant to facilitate the conduct of business by a taxpayer. “What I get my brother G.V. Odunga, J to be saying in REPUBLIC v KENYA REVENUE AUTHORITY & ANOTHER EX-PARTE TRADEWISE AGENCIES [2013] eKLR is that where _the revenue authority decides to reassess a taxpayer after the issuance of a compliance. certificate, the revenue authority ought to alert the taxpayer.of the'new evidence necessitating additional assessments. In the matter before me, the Applicant was informed about the need for additional assessments and given an opportunity to have its say. From the foregoing it is clear that the Respondent's actions were lawful, reasonable and in compliance with the rules of natural justice. That Page 24 of 25 JR No. 165/2014 means the Applicant has not established grounds for issuance of judicial review orders, The Applicant's application is therefore dismissed with costs to the Respondent. Date jigned and delivered at Nairobi this Def av off-ef, _ 2015 W. KORIR, JUDGE OF THE HIGH COURT Page 25 of 25

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