A flour milling and food processing firm has lost a bid to stop a Sh527million claim by the Kenya Revenue Authority (KRA) for unpaid taxes dating back to 2015.
United Millers Ltd wanted the High Court to quash KRA’s decision dated August 6, 2021, demanding a sum of Sh527 million in taxes.
The company also wanted the court to issue a prohibition order directed at the KRA prohibiting it from demanding, issuing agency notices, or in any other way howsoever from effecting the collection of the said taxes as contained in the demand notice of August 6, 2021, or any other sum arising from the tax assessment subject of the court case.
But Justice Anthony Ndung’u dismissed the judicial review application on grounds that his court does not have powers to grant the orders sought by the manufacturer.
Initial orders
The judge observed that the company was seeking to enforce initial orders issued by another judge, Lilian Nzioka, on July 27, 2021, requiring the taxpayers’ records to be subjected to a thorough audit by an independent party and reconcile the same preferable through Alternative Dispute Resolution (ADR).
In that order, judge Nzioka had said if that is not tenable, then, the KRA must serve a fresh demand within 14 days from the said date. The tax in dispute had also been reduced from Sh792 million to Sh527 million.
In the suit filed before Justice Ndung’u the company had alleged a breach of the said orders and argued that the demand for the disputed taxes was illegal.
However, Justice Ndung’u stated if the company feels that KRA in issuing the tax demand breached the commands of the court, recourse for redress should be in that court.
He said his court does not possess the necessary legal powers to supervise another superior court.
“Invoking of the judicial review jurisdiction in this court is in my considered view legally untenable. This court has no supervisory jurisdiction over the High Court. The court cannot assume the role of interpreting and enforcing the orders of the High Court. Any issues arising from enforcement of the judgment of the judge ought to be placed before the court that issued the orders,” said Justice Ndung’u.
The tax dispute stemmed from a tax assessment dated September 24, 2013, in which KRA demanded from the company additional taxes in import duty, value-added tax, import declaration fees, penalties, and interest in the sum of Sh1,496,614,255.
The figure was revised to Sh792.3 million in June 2015 but still dissatisfied with the demand, the company lodged a case at the Tax Appeals Tribunal.
The appeal was partially dismissed and the company appealed the decision to the High Court in Nairobi in 2018. A stay of execution was granted subject to a bank guarantee of Sh350 million. BY DAILY NATION