According to Lord Hailsham in Chief Constable of the North Wales Police v Evans [1982] 1 WLR 1155, judicial review is not intended to deprive or deny relevant authorities of the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is meant to ensure that the relevant authorities use their powers properly. Nowhere is this principle more crucial than in the realm of tax administration. In Kenya, the interface between the Kenya Revenue Authority’s (KRA) duty to collect and administer revenue and the taxpayer’s right to fair administrative action is a delicate one. Judicial review stands as a critical safeguard which ensures that KRA exercises its powers within the bounds of expeditious, efficient, lawful, reasonable and procedurally fairness.

However, the accessibility and practical efficacy of judicial review in the context of tax disputes remain highly contested. With recent Court decisions interpreting section 3 of the Tax Procedures Act (Cap. 469B) Laws of Kenya (TPA), as granting the Tax Appeals Tribunal (the Tribunal) the jurisdiction to resolve disputes arising from any other decision made under a tax law, there is now a narrow window for tax disputes to find their way to the judicial review Courts. As a result, this article therefore cautions taxpayers of the tendency to institute judicial review cases against KRA unless it is in the exceptional circumstances.

The State of Play

In Kenya, Courts approach judicial review in tax disputes with a nuanced, case-by-case analysis. The current jurisprudence from the judicial review Courts indicates that Courts are reluctant to hear tax disputes unless all statutorily available avenues for resolving such disputes have been exhausted or are inapplicable (see section 9(2) of the Fair Administrative Action Act, 2015 (FAAA)). Tax disputes will only be heard and determined by a judicial review Court in exceptional circumstances, where an applicant seeks and is granted an exemption from the obligation to exhaust available remedies, if the Court considers such an exemption to be in the interest of justice (see Section 9(4) of the FAAA). Put simply, current jurisprudence from judicial review Courts shows that disputes will only be heard and decided in those Courts if:

• There is no redress avenue available in the tax statutes and where there is, the applicant has exhausted those available avenues.
• The applicant has made a case for exemption from the doctrine of exhaustion.

The Court at paragraphs 89 of the decision in Republic v Insurance Regulatory Authority; Old Mutual General Insurance Kenya Limited (Exparte Applicant) and in Tropic Air Limited [2025] KEHC 4570 (KLR) determined that judicial review can only be considered if the party has complied with the above set parameters.

A critical question is what factors do Courts consider when determining whether a tax dispute can be heard and determined in judicial review Courts?

Key Considerations for Judicial Review

1. Jurisdiction

The first and most fundamental consideration is jurisdiction. Without it, the Court has no choice but to down its tools. Accordingly, a Court faced with an application for judicial review in tax disputes must first determine whether the applicant has exhausted the statutory avenues for redress before assuming jurisdiction.

The resolution of disputes is provided for in the TPA as read together with the Tax Appeals Tribunal Act (Cap. 469A) Laws of Kenya (TATA). More specifically, sections 51 to 54 of the TPA provide a comprehensive procedure that ought to be followed by a taxpayer in the resolution of tax disputes. It begins with an assessment and ends with an appeal to the Court of Appeal with a provision for out-of- Court settlement.

Section 3 of the TPA also defines an appealable decision to include an objection decision and any other decision made under a tax law other than— (a) a tax decision; or (b) a decision made in the course of making a tax decision. The phrase any other decision under tax law has been used by courts to clothe the Tax Appeals Tribunal with jurisdiction to hear a taxpayer aggrieved by any decision of the KRA, including those relating to exemption certificates, issuance of KRA PIN, and various other administrative action. A recent example of the interpretation of section 3 of the TPA is in Saleh Mohammed Trust v Commissioner of Domestic Taxes [2025] KEHC 2169 (KLR) where declining an application for renewal of a tax exemption certificate was considered an appealable decision.

Exception to the general rule

The doctrine of exhaustion is subject to several exceptions. Courts have developed guiding principles for determining when an applicant may be permitted to institute judicial review proceedings without exhausting the available remedies. In such circumstances, the applicant must seek the Court’s exemption from pursuing other available remedies. To succeed in this request, the applicant must establish two (2) fundamental elements, as set out in Havi v Kenya Revenue Authority [2024] KEHC 3006 (KLR). The exemption may be granted if the following conditions are met:

• An applicant’s case presents what, in the eyes of the law, constitutes exceptional circumstances.
• It is in the interest of justice that the applicant need not exhaust the available alternative remedies.

What are the exceptional circumstances?

The Court in Krystalline Salt Limited v Kenya Revenue Authority [2019] KEHC 6939 (KLR), stated that what constitutes exceptional circumstances depends on the facts of each case and it is not possible to have a closed list.

The requirement for the circumstances to be exceptional means they must go well beyond the normal run of circumstances typically found in most cases. The circumstances do not have to be unique or very rare, but they must genuinely be the exception rather than the rule. Judicial review Courts have interpreted exceptional circumstances to mean situations that are out of the ordinary and render it inappropriate for the Court to require an applicant to first pursue the available internal remedies. The circumstances must in other words be such as to require the immediate intervention of the Court rather than to resort to the applicable internal remedy.

1. Cause of Action and Remedies

In addition to the issue of jurisdiction and exemption, parties must also carefully consider the nature of the cause of action and whether the issue for review is a merit based or a procedural review issue. This determination is central as it not only shapes the pleadings and the procedural route a party should take but also governs the scope of reliefs that may be granted.

The Supreme Court in Dande & 3 others v Inspector General, National Police Service & 5 others [2023] KESC 40 (KLR) affirmed that while judicial review may be pursued through a dual approach being the merit review and procedural review, the applicable approach must be ascertained from the pleadings and procedure made at the outset of the proceedings.

Another instance of this principle at play was observed in Mutiso v Commissioner of Domestic Taxes [2023] KEHC 22421 (KLR) where the High Court distinguished the taxpayer’s claim as one alleging a violation of constitutional rights, rather than a request to review a tax refund decision. It is therefore apparent that some of the prayers sought can only be granted by the High Court. Redress such as the declaration of unconstitutionality of a provision in law and remedies towards violation of human rights cannot be obtained at the Tribunal. Therefore, the taxpayer has the option to directly address such disputes in the High Court.

Conclusion

Judicial review remains a critical tool for upholding legality and procedural fairness in tax administration. Its applicability in tax disputes is influenced by the courts’ discretion in deciding whether or not to intervene. For it to serve its intended purpose, Courts must strike a careful balance of protecting taxpayers’ rights without undermining the integrity of the tax system.

As such, a case-by-case analysis, taking into consideration the factors discussed above, is essential in determining whether judicial review remains an effective remedy or an exceptional recourse. Ultimately, the onus lies with the courts to exercise their discretion judiciously, ensuring that taxpayers have access to justice in an expeditious and efficient manner.