[2020] KEHC 9210 (KLR)

[2020] KEHC 9210 (KLR)

The court found that the Kenya Revenue Authority failed to comply with the mandatory procedures under the Tax Procedures Act when issuing tax demands to the petitioners. Specifically, KRA did not provide proper amended assessments, adequate notice, or specify the manner of objection as required by law. This...

Source-derived case information.

Citation
[2020] KEHC 9210 (KLR)
Parties
Applicant: Mohamed Ali T/A Top Model Apparels; Applicant: Munta Enterprises Limited; Applicant: Vision Advertising & Printing Co; Applicant: Afri Fertilizer & Farm Chemicals; Applicant: Zulia Trading Company Limited; Applicant: Halinto General Distributors Ltd; Applicant: Rahima Traders; Applicant: Rahisi Cash & Carry Traders; Applicant: Baitul Investments; Applicant: Darwin Wholesalers Limited; Applicant: Family Fashion Clothing; Applicant: Fahari Hardware & Building Wholesalers; Applicant: Jarinta (K) Limited; Applicant: Sambiba Distributors Limited; Applicant: Manguzi Hardware; Applicant: Branso Distributors Limited; Applicant: Saniken (K) Limited; Applicant: Ritz Enterprises Limited; Applicant: Knightsbridge Trading Company Ltd; Applicant: Dolphin Stationers Limited; Applicant: Sahara Impex Limited; Applicant: Moyo Impex Limited; Applicant: Cool Collections Limited; Applicant: Heet Enterprises Limited; Applicant: Ken Iron and Steel Limited; Applicant: Mukti Limited; Applicant: Nishyam General Supplies Limited; Applicant: Jar Raj Ltd; Applicant: Mani Empex Limited; Applicant: Tire World Limited; Applicant: New Oshwal Distributors Limited; Applicant: Tapas Agencies Limited; Applicant: Infotech Management Services Limited; Applicant: Profile International Limited; Applicant: Gurulink Kenya Limited; Applicant: Royal King Kenya Limited; Applicant: Micromart Distribution Limited; Applicant: Maxwell Africa Limited; Applicant: Ukwala Trading Company Limited; Applicant: Tropical Lush Limited; Applicant: Kensta Metal & Hardware Limited; Applicant: TBS Trading Limited; Applicant: Kings Trading Company Limited; Applicant: Lamincho Distributors Limited; Applicant: Nitai Limited; Respondent: Kenya Revenue Authority
Court
High Court
Court Station
High Court at Nairobi (Milimani Commercial Courts)
Jurisdiction
Kenya
Judgment Date
12 November 2020
Case Number
Petition 167 of 2018
Procedural Posture
Constitutional Petition / Judgment
Outcome
Petition allowed in part. Declaration of breach of fair administrative action and legitimate expectation. Quashing of demand notices. Costs to petitioners.
Legal Topics
Tax Assessment Procedure, Fair Administrative Action, Legitimate Expectation, Vat Disputes, Judicial Review, Enforcement Measures
Source Language
english
Tax Law Administrative Law Tax Assessment Procedure Fair Administrative Action Legitimate Expectation Vat Disputes Judicial Review Enforcement Measures

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Parties

Mohamed Ali T/A Top Model Apparels

Applicant

Munta Enterprises Limited

Applicant

Vision Advertising & Printing Co

Applicant

Afri Fertilizer & Farm Chemicals

Applicant

Zulia Trading Company Limited

Applicant

Halinto General Distributors Ltd

Applicant

Rahima Traders

Applicant

Rahisi Cash & Carry Traders

Applicant

Baitul Investments

Applicant

Darwin Wholesalers Limited

Applicant

Family Fashion Clothing

Applicant

Fahari Hardware & Building Wholesalers

Applicant

Jarinta (K) Limited

Applicant

Sambiba Distributors Limited

Applicant

Manguzi Hardware

Applicant

Branso Distributors Limited

Applicant

Saniken (K) Limited

Applicant

Ritz Enterprises Limited

Applicant

Knightsbridge Trading Company Ltd

Applicant

Dolphin Stationers Limited

Applicant

Sahara Impex Limited

Applicant

Moyo Impex Limited

Applicant

Cool Collections Limited

Applicant

Heet Enterprises Limited

Applicant

Ken Iron and Steel Limited

Applicant

Mukti Limited

Applicant

Nishyam General Supplies Limited

Applicant

Jar Raj Ltd

Applicant

Mani Empex Limited

Applicant

Tire World Limited

Applicant

New Oshwal Distributors Limited

Applicant

Tapas Agencies Limited

Applicant

Infotech Management Services Limited

Applicant

Profile International Limited

Applicant

Gurulink Kenya Limited

Applicant

Royal King Kenya Limited

Applicant

Micromart Distribution Limited

Applicant

Maxwell Africa Limited

Applicant

Ukwala Trading Company Limited

Applicant

Tropical Lush Limited

Applicant

Kensta Metal & Hardware Limited

Applicant

TBS Trading Limited

Applicant

Kings Trading Company Limited

Applicant

Lamincho Distributors Limited

Applicant

Nitai Limited

Applicant

Kenya Revenue Authority

Respondent

Procedural Posture

Constitutional Petition / Judgment

Legal Issues

  1. 1 Whether the High Court has jurisdiction to hear the petition despite statutory tax dispute resolution mechanisms.
  2. 2 Whether the Kenya Revenue Authority failed to follow the proper procedure under the Tax Procedures Act, thereby violating the petitioners' right to fair administrative action.
  3. 3 Whether the respondent infringed the petitioners' legitimate expectation and constitutional rights.

Ratio Decidendi

The court found that the Kenya Revenue Authority failed to comply with the mandatory procedures under the Tax Procedures Act when issuing tax demands to the petitioners. Specifically, KRA did not provide proper amended assessments, adequate notice, or specify the manner of objection as required by law. This procedural failure violated the petitioners' right to fair administrative action under Article 47 of the Constitution and breached their legitimate expectation that statutory procedures would be followed. The court held that while KRA is entitled to recover taxes, it must do so in accordance with the law, and any actions taken in breach of statutory and constitutional requirements are...

Court Disposition

Petition allowed in part. Declaration of breach of fair administrative action and legitimate expectation. Quashing of demand notices. Costs to petitioners.

Orders

  • A declaration is issued that the respondent is in breach of the Tax Procedures Act, 2015 and Article 47 of the Constitution, and that any actions flowing from the said actions are unconstitutional, unlawful and void.
  • An order of certiorari is issued removing into this Court and quashing all demand notices issued to the petitioners by the respondent in respect of the tax claims in dispute in these proceedings.