Mombasa tycoon’s firm loses six-year Sh458m tax battle


The Grain Bulk Handlers Limited silos in Mombasa. FILE photo | nmg

Grain Bulk Handlers (GBH), owned by Mombasa tycoon Mohammed Jaffer, has lost a six-year battle against the taxman’s demand for Sh458 million.

Justice Enock Chacha Mwita dismissed two petitions that GBH filed against the Kenya Revenue Authority (KRA), noting it did not give any evidence that proves the violation of its rights as alleged.

The GBH moved to court in April 2012, seeking to stop the KRA from demanding Sh458 million custom tax for grain it had allegedly imported but evaded paying tax on.

The firm, however, faulted the taxman, claiming it only handles grain on behalf of importers and therefore the accusation that it imports grain was false and erroneous.

“The court will only exercise its jurisdiction under article 165 (3) (b) of the constitution when it is called upon to determine a real question whether a right or fundamental freedom in the Bill of Rights have been denied, violated, infringed or threatened. Where there is no such violation like in this case, the option available to the court is to decline jurisdiction,” ruled Mr Justice Mwita.

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The firm claimed that KRA demanded that it produces books of account and other documents in June 2011 for audit.

Consequently, the taxman in February 2012 issued a demand for customs tax of Sh458 million and Sh24 million for falsification of documents contrary to section 23 of East African Community Customs Management Act.

The firm, in court documents, denied the accusation arguing that it only delivers imported grain on behalf of importers on evidence that the duty had been paid, saying allegations that it concealed and handled and disposed of uncustomed goods were legally and factually erroneous.

Therefore, it said, its fundamental rights and freedoms were violated by KRA in demanding immediate payment of Sh481 million as customs tax.