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Home Headlines

Court allows KRA to collect Sh2.3 billion debt from Dubai firm

by Editor
June 12, 2020
in Headlines, BREAKING NEWS, Highlights
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KRA Headquarters at Haile Selassie Avenue, Nairobi

By Nick Thiong’o

The High Court in Nairobi has ruled in favour of KRA in a case filed by a Dubai based company seeking orders to stop KRA from collecting Sh2.3 billion in tax debts from its affiliate company registered and operating in Kenya.

Justice Pauline Nyamweya on 23rd September 2019 ruled in favour of KRA and struck out a Judicial Review filed on 28th July 2018 by United Arab Emirates registered firm, Suzan General Trading JLT.

Suzan General Trading JLT had sought among others an order to stop KRA from enforcing the warrants and distress notices issued on 9th July 2018 in respect of a tax (customs duty) debt owed by its affiliate company Diplomatic Duty-Free Limited (DDF) amounting to Sh2, 296,210,133.

The company had also sought to stop KRA from interfering with its business operations on account of the debts owed to KRA by DDF and from issuing and enforcing any further proclamations whatsoever on its property in relation to a debt due to the KRA by DDF, a company that is totally distinct, separate and unconnected to it.

The applicant in the case (Suzan General Trading JLT) also sought to stop KRA from interfering with its business operations because of the debts owed to KRA by DDF and an order of court directing KRA to lift the proclamation dated 9th July 2018 issued by Keysian Auctioneers in respect to its property.

Suzan Duty Free contested the proclamation notice and argued that the same was unreasonable and that the goods that were proclaimed belonged to it and not DDF.  Suzan Duty stated that KRA was illegally and unlawfully causing it to pay debts that were for DDF that is a distinct entity.

KRA’s position on the case which was successfully argued was that DDF incurred import duty taxes which were demanded on   5th August 2013 and reminders sent on 25th September 2013 which went unacted upon.

In arriving at the decision, the Court found that the suit by Suzan Duty Free was not properly before the Court because Suzan Duty free had not complied   with the provision of Section 52 of Tax Procedures Act i.e. the matter ought to have been determined by the Tax Appeal Tribunal. Thus, Suzan Duty Free had not exhausted the remedy provided in the law before filing the Case in the High Court.

In conclusion, the Court held that the issues and reasons why the case was brought before Court were not capable of being resolved by way of judicial review proceedings and accordingly struck out the suit with no orders as to costs.

The court decision means that KRA can proceed to enforce collection of the taxes due of Sh2,296,210,133

Editor

Editor

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