An Agency Notice is an Appealable Tax Decision

Case Study: Mubea Group Limited v Kenya Revenue Authority (Judicial Review Originating Motion Application E115 of 2025) [2025] KEHC 12003 (KLR) (Judicial Review) (14 August 2025) (Judgment)

1. The Dispute:

• On April 15, 2025, the KRA issued a demand letter and an agency notice to the applicant’s bank, Cooperative Bank of Kenya, for Kes. 10,100,774/=.
• The KRA claimed this amount was for customs duties related to the non-cancellation of transit bonds.
• Mubea Group Limited argued that the alleged tax amount did not result from a valid tax assessment but was an erroneous figure generated during the migration of the KRA’s systems from the Integrated Tax Management System (ITMS) to the iTax platform.

2. Mubea’s Case:

Mubea Group Limited sought several orders from the High Court, including:

• A stay of execution and the lifting of the agency notice.
• An order to quash the KRA’s decision to demand the amount.
• An order of prohibition to stop the KRA from continuing to demand the money.
• Mubea contended that because there was no formal tax assessment or “objectable tax decision,” it was unable to use the statutory objection procedure under the Tax Procedures Act. It claimed this was an “exceptional circumstance” that entitled it to judicial review.

3. KRA’s Case:

• KRA filed a preliminary objection, arguing that the High Court had no jurisdiction to hear the case.
• It contended that the agency notice was an “appealable decision” under the Tax Procedures Act.
• The KRA maintained that Mubea Group Limited should have first appealed the decision to the Tax Appeals Tribunal before coming to the High Court, thus failing to exhaust the alternative dispute resolution mechanisms.

The High Court ultimately agreed with the KRA, finding that the agency notice was an appealable decision and that Mubea had not followed the correct legal procedure. The court did not rule on the merits of the case but instead struck out the application on jurisdictional grounds.

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