JUDGMENT OF THE COURT
1. By a letter dated 30th August, 2012 Kenya Revenue Authority (the respondent) demanded payment of Kshs.50,500,743 being Value Added Tax (VAT) arrears for the period between January and September, 2008 from Corrugated Sheets Limited (the appellant). This came as a surprise to the appellant who believed it had paid VAT relating to the period in question. Consequently, the appellant wrote to the respondent explaining its position. In particular, the appellant claimed that the respondent had failed to take into account the returns it had filed with respect to that period. More so, that as at January, 2008 the appellant had an opening tax credit balance of Kshs.75,605,085.30 in its favour. Further, at the end of that period in September, 2008, the respondent paid to the appellant a tax refund of Kshs.63,851,603. Therefore, there was no basis for the additional tax claimed since the appellant had diligently and faithfully paid its taxes.
2. While agreeing that the appe…