The manufacturer of Panga soap, Diamond Industries, is locked in a dispute with the taxman over a Sh948 million tax bill.
Diamond Industries, which also manufactures Sunpride cooking oil, Raha cooking fat and Fortune soaps, says the Kenya Revenue Authority’s (KRA) appeals tribunal has refused to give it a hearing in the matter which is pending judgment.
The consumer goods manufacturer filed an appeal against a Sh948 million demand before the tribunal in 2015 but switched lawyers before the matter could be heard on August 15 this year.
Diamond’s new advocates, Muumbi & Company, were unable to retrieve its file from the consumer goods manufacturer’s previous lawyers.
The tribunal refused to grant Diamond’s lawyers time to retrieve the file and file documents to support their client, and held that it would inform the consumer goods manufacturer when a judgment is ready.
Diamond now says it risks being condemned unheard, contrary to provisions of the Constitution.
“Aggrieved by the said decision, Diamond instructed Muumbi & Company to appeal against the decision and the said advocate wrote a letter requesting the Tribunal to furnish him with a copy of the said decision and proceedings for purposes of appeal.”
“However, the tribunal declined, only indicating that the said order is not appealable. The tribunal further directed that it will deliver a judgment on notice which essentially means that Diamond Industries will not have an opportunity to be heard by the Tax Appeals Tribunal,” says Paresh Patel, Diamond Industries director, in court documents.
Justice George Odunga has ordered that the tribunal temporarily stop any further proceedings in the appeal before it.
But the taxman now wants documents Diamond filed in court on September 16 disregarded, arguing that the firm brought them before court beyond the seven days deadline Mr Justice Odunga had given to the consumer goods manufacturer.
The tribunal denied Diamond Industries’ lawyer audience arguing that he had not filed a notice of appointment of advocates, But Diamond holds that there is no law that compels an advocate to file a notice of appointment before being heard on behalf of his or her client.
“The seven days within which the substantive notice of motion application should have been filed and served lapsed on September 12, 2016.
Diamond Industries only filed and served the application on September 16. Diamond has not sought the court’s leave to extend the time frame. The requirement to comply with the timeline issued by this court is not a mere technicality,” the tribunal says.
The KRA in 2010 raided Diamond’s offices and confiscated accounting records. Two years later, the taxman slapped Diamond with a Sh782 million demand, which was last year amended to Sh948 million.
The allegedly unpaid levies are corporation tax and value added tax for the years 2007 to 2012. The KRA claims that some of the goods Diamond labelled for export may have been sold locally.
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