Sugar firm’s Sh527m pay by KRA put on ice

The Court of Appeal has suspended execution of an order requiring Kenya Revenue Authority (KRA) to pay a sugar importer Sh527 million as damages for illegal confiscation of its consignment for close to two years.

Justices Martha Koome, Gatembu Kairu and Jamila Mohammed said the importer, Akaba Investments Limited, should not be paid until an appeal lodged by the taxman is heard and determined.

The three-judge bench found KRA has an arguable appeal against decision of the High Court in Mombasa to award the importer the colossal amount of money.

They also found that the appeal is likely to be rendered nugatory should the importer be paid the damages pending determination of the matter that has been in the corridors of justice for 12 years.

“Akaba Investments Limited did not indicate its willingness or ability to repay the decretal amount in the event the appeal is successful,” said the bench while allowing KRA’s request to stop execution of the High Court judgment.

The judges declined a request by the company to order the entire sum be deposited in court or in the joint names of counsels representing the two sides.

The court was of the view that KRA being a government body, charged with the responsibility of collecting and accounting for all revenue due to the government, is unlikely to lack money to settle a decree if the appeal is unsuccessful.

The appeal stems from the judgment of Justice Patrick Otieno who ruled that it was wrong and injurious for KRA to detain the trader’s consignment of 4000 Metric Tonnes (MT) of sugar imported from Egypt.

The confiscation in 2007 was due to administrative issues between the tax collector and the Kenya Sugar Board.

Justice Otieno said even after the court delivered itself on the matter, the release was still resisted for more than six months, which occasioned the importer financial losses.

As a consequence, the plaintiff inevitably suffered the injury and losses owing to being denied access to the merchandise to enable it run its business.

“I consider it not expected of a public institution like the KRA to act in an injurious way against any citizen whose ease of doing business should be the constant prayer for all so that we grow businesses, expand the tax yields and grow our economy,” said Justice Otieno in his judgment dated May 5, 2020.