advertisement
Economy

Court gives KRA the go-ahead to deal with suspect goods

New law empowers KRA to seize goods whose clearance documents are suspected to be incorrect or false. FILE
New law empowers KRA to seize goods whose clearance documents are suspected to be incorrect or false. FILE 

The High Court has dismissed an attempt to scrap a clause in the East Africa Customs Management Act (EACCMA) empowering the Kenya Revenue Authority (KRA) and the police to freely deal with suspect imports into the country.

Justice David Majanja dismissed an application by a private company seeking declaration that the clause empowering the two bodies to impound and detain suspect goods as inconsistent with the constitution.

Crywan Enterprises Limited moved to court following the seizure of 160 drums of neutral alcohol it imported from India on suspicion that they were in the country illegally.

“I do not find that sections 210 and 211 of EACCMA unconstitutional or in violation of Article 40(2) in the manner suggested by the petitioner. In view of my findings, I do not think it is necessary to address the meaning of Article 40(6) of the Constitution,” ruled Mr Justice Majanja, adding that the seizure of the goods was within the law and did not contravene the rights of the petitioners.

The relevant constitutional article protects legitimately acquired private property from State encroachment.

advertisement

The goods were seized after the vehicle driver produced delivery notes but failed to show import documents as required by the law. KRA impounded the goods to verify contents of the consignment besides the documentation.

The taxman established that some duty on the impounded goods amounting to Sh8.9 million had not been paid. However, the company declined to settle the demand denying the ethanol was smuggled.

It said the seizure and detention of the consignment was unjustified, unlawful and in breach of the petitioner’s rights.

The company went to court arguing that the law providing for detention of the goods suspected to be illegally imported contravened article 40 of the constitution which provides for right to own property.

The judge said the contested clause should be read in totality to appreciate its meaning. He added that Section 210 and 211 of the regional Customs Act identified the kind of goods and vessels liable to forfeiture and that it is key in monitoring movement of goods into the country for easy collection of taxes.

Goods that can be detained include prohibited, regulated and those imported, exported or transferred in a concealed manner.

The act also empowers the officers to seize goods whose clearance documents are suspected to be incorrect or false.

“I find and hold that power to seize goods on the basis of reasonable grounds provided in the Act is rationally connected to the purpose of the Act to secure and collect taxes,” said the judge, adding that “once such goods are consumed or go into circulation, it becomes almost impossible to trace them and also collect taxes.

advertisement