The Court of Appeal has barred the Kenya Revenue Authority (KRA) from demanding Sh133 million in penalties and interest from Total Kenya Ltd following their six-year dispute over Sh23 million customs duty for a consignment of 21 cases of imported prime burners.
Appellate judges Philip Waki, Roselyne Nambuye and Asike-Makhania said the petroleum dealer had settled its liability to the taxman and it would be unfair and unjustified for KRA to demand the “grossly huge sum.”
“The matter has been in court since 2001 and to ask the Total Kenya to pay the amount is tantamount to punishing it for seeking judicial intervention. It would be oppressive, unconscionable, punitive and unjust,” they said.
However, the three-judge Bench upheld the dismissal of the firm’s application for judicial review by High Court judge David Majanja on May 8, 2012 in which it was seeking to quash the tax demand by the Commissioner of Customs and Excise by a letter dated February 8, 2001. The firm wanted KRA stopped from confiscating its property to recover the outstanding dues.
Total Kenya had argued that its clearing and forwarding agent, Veritas Agencies Ltd, was responsible for its imported goods by paying the necessary duties and taxes. The agent had been registered by KRA and the firm questioned why the demand was made almost six years later.