Any person who has made, or expects to make, taxable supplies exceeding five million shillings within a twelve-month period is required to register for VAT and must apply to the Commissioner within thirty days of becoming liable. Failure to apply within the stipulated timeframe will result in automatic registration by the Commissioner.

Abby Holdings Limited is a Kenyan limited liability company engaged in the importation and sale of motor vehicle spare parts.

On 27 July 2018, the Kenya Revenue Authority (KRA) issued additional VAT assessments totaling Kshs. 17,231,831.37, comprising principal tax and interest. The assessments were premised on allegedly undeclared taxable supplies arising from import transactions undertaken by the company between 2013 and 2017.

According to import data obtained and analyzed by the KRA, Abby Holdings had under-declared imports valued at Kshs. 90,503,316 over the 2013–2017 period. This under-declaration translated into a VAT exposure of Kshs. 17,231,300.81.

The Appellant argued that the KRA erred in registering it for VAT and therefore lacked basis to impose VAT liabilities for the disputed period.