Court suspends order requiring KRA to pay Sh527m
Bernice Mbugua @BerniceMuhindi
Kenya Revenue Authority got a reprieve after the Court of Appeal suspended an order requiring it to pay Sh527 million to a sugar import firm.
Justices Martha Koome, Gatembu Kairu and Jamila Mohammed set aside the execution of the judgment decree, which was delivered in Mombasa on June 5, pending the hearing of an appeal filed by KRA.
Mombasa High Court Judge Patrick Otieno had ordered KRA to pay Akaba Investment for damages suffered when their consignment was illegally detained for more than a year over tax dispute.
“Upshot judgment is entered for the plaintiff against the defendant for the sum of USD 1,132,460 and Sh405,108,353 as special damages with interest thereon at court rates from the date of filing suit until payment in full,” the judge had ruled.
The dispute between the company and KRA arose from a Gazette Notice issued by the Minister of Finance, domesticating the arrangements made between Kenya and the Common Market for Eastern and Southern Africa (Comesa) in 2003.
Legal Notice provided for duty free importation of sugar to a maximum of 111,000 metric tonnes of white refined sugar per annum and 89,000 metric tonnes of other forms of sugars per annum.
Kenya Sugar Board published a Gazzette notice informing registered importers that the importation period was between February 1 , 2007 to February 28 , 2008.
KRA later published notices in the daily newspapers indicating the effective date of importation of sugar quota to be imported duty free from Comesa was March 1, 2007 and not February 1, 2008 as published earlier by the Kenya Sugar Board.
Akaba Investment Limited on February 27, 2007 imported 1,000 metric tonnes of sugar but the Customs Services Department of KRA declined to process its release under the Comesa mutual tariff concessions insisting that the import was not within the declared period which was March 1, 2007.
