City Hall has been allowed to pursue punishment of the Kenya Revenue Authority (KRA) boss John Njiraini for attaching Sh1 billion to recover disputed taxes despite a court order barring the same.
Justice George Odunga has allowed City Hall to file a contempt of court application against the KRA after the taxman attached the sum despite an injunction stopping it from recovering Sh4.7 billion in disputed taxes.
The disputed Sh1 billion was to be transferred from the Central Bank of Kenya to City Hall, but KRA intercepted the payment through an agency notice.
The KRA told Justice Odunga that the Sh1 billion was a fresh demand, separate from the initial Sh4.7 billion.
The KRA added that it was not served with a copy of the orders preventing recovery of the Sh4.7 billion.
But Justice Odunga ruled that the order issued by another judge, Roselyn Aburili in December barred the KRA from issuing fresh agency notices to City Hall’s bankers and its e-payment managers, Webtribe Ltd.
The judge said the KRA knew about the orders issued, and the fact that the taxman had applied to have the court’s directions set aside was evidence.
“In this case it is clear that the KRA was aware of the orders of this court otherwise it would not have made attempts to have them set aside.
It however decided to adopt legal ingenuity in order to evade the same. This court cannot countenance such an action,” Justice Odunga ruled.
“I find that no cause has been shown by the KRA why contempt of court proceedings cannot be commenced against its offices... the Nairobi County Government is hereby granted the liberty to proceed against the KRA in terms of section 30 of the Contempt of Court Act,”
KRA claims the total amount it now demands from City Hall is Sh5.7 billion in PAYE that was deducted from workers’ salaries but not remitted to the taxman.
Justice Odunga added that he will not grant KRA an audience until it “remedies the attachment action”, which means refunding City Hall the Sh1 billion.
City Hall had said the amount was meant to cater for workers’ salaries.