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KRA Was Right To Issue Forfeiture Notices Against Former Lands Secretary, Court Of Appeal Rules

Editor SharpDaily by Editor SharpDaily
July 1, 2022
in News
Reading Time: 2 mins read
KRA's Digital Service Tax

KRA [Photo/Courtesy]

The Court of Appeal has ruled that the decision by the Kenya Revenue Authority (KRA) to issue the forfeiture notice for 31 motor vehicles ten years ago to  27 motor vehicle owners among them, the former Lands Secretary Lydia Wanjiru Mutamba was within the law. KRA and its Commissioner of Investigation and Enforcement had appealed the judgment of the High Court issued on December 7, 2016.

“The notice opened an avenue for the respondents to present their case to the appellants through the appellants’ vehicle inspection section. The appellants therefore provided the respondents with an opportunity to be heard, which the respondents declined to take up. The appellants did not shut their doors on the respondents, and neither did they decline to receive any form of representations from them,” the court of Appeal ruled.

The matter arose after post-import investigations by KRA revealed that import duty for a number of motor vehicles owned by the respondents had been mis-declared, import duty for some of the vehicles had not been fully paid and for some vehicles, the duty had not been paid at all.

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KRA published a Notice in the “Daily Nation” newspaper on May 21, 2012, pursuant to the outcome of the investigations, requiring the owners of the motor vehicles with outstanding tax issues to liaise with the motor vehicle inspection section of KRA and produce the vehicles and relevant documents for verification.

The Respondents moved to the High Court to seek and were granted orders to quash the decision of KRA given vide the Public Notice and an order to prohibit KRA from impounding, levying distress or in any way interfering with the respondents’ possession and usage of their respective motor vehicles. They argued that KRA had denied them an opportunity to be heard before issuing them with the forfeiture notices as no demand notice on outstanding duty was issued to them.

Read: Activists Publish List Of Ukrainian Civilians Abducted By Russian Forces

On appeal, KRA’s position was that the notice issued was for verification purposes only, and which was within its mandate to issue such notices pursuant to the East African Community Customs Management Act. The notice required the owners of the listed motor vehicles to first liaise with KRA, after which they would present the relevant documentation of the vehicles for verification purposes. This for KRA constituted an opportunity for the respondents to be heard. The respondents failed to comply with the notice and, therefore, could not argue that they were denied an opportunity to be heard.

The Court of Appeal has agreed with KRA, holding that the published notice by KRA in the “Daily Nation” was plain and unambiguous. The notice did not make any immediate demand on the payment of duty. It required owners of the listed motor vehicles to liaise with the appellants’ motor vehicle investigation section.

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