The Kenya Revenue Authority (KRA) has suffered a setback after the High Court in Mombasa rejected its request to block a company from challenging tax claims of Sh29.2 million.
Resident Judge Olga Sewe ruled that her court had the jurisdiction to hear the case, despite KRA's argument that the dispute should have first gone through the Tax Appeals Tribunal.
“I find no merit in the KRA’s preliminary objection. The same is hereby dismissed,” said the judge.
Judge Sewe acknowledged that Fazal Dharamshi Ltd had the right to bring the matter to court even though there was an alternative procedure.
The court observed that certain issues raised by the company could not be addressed in an alternative forum as suggested by the KRA.
“I am satisfied that the petitioner was justified in bringing the instant petition, notwithstanding the existence of the alternative procedure provided for in the East African Community Customs Administration Act (EACCMA),” said the judge.
Further, the judge noted that the company’s complaint that the demand for additional taxes, years after the goods were sold, infringed on its right to property as well as the national values as set out in the Constitution, were critical issues.
“Those are not issues that would be amenable to resolution in the alternative forum provided for under EACCMA,” said the judge.
