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Court Orders Convex Commodity Merchants Limited to pay Sh280.6 million

Kenya Revenue Authority (KRA) has been permitted by the High Court to recover over Sh280.6 million in tax arrears from Convex Commodity Merchants Ltd.

The taxpayer has been battling a three year court case it had filed seeking to stop KRA from enforcing the tax demand totalling Sh280,586,727.94 on the basis that the same was illegal and excessive.

Convex Limited had also claimed that KRA had frozen its various bank accounts without affording it an opportunity to defend itself.

In a press statement sent to newsrooms by KRA, the Authority defended its tax demand arguing that a customs post clearance audit had revealed an undervaluation of the sugar consignment imported by Convex Commodity Merchants Ltd between May 2017 and August 2017.

The High Court Judge Justice Ngaah Jairus of the Judicial Review Division in his judgment dated 7th July 2021, ruled that the Applicant before filing a Judicial Review Application, ought to have exhausted the available mechanisms for resolution of a particular dispute.

“The decisions I have cited coupled with these provisions are self-explanatory and point to the conclusion that as long as the applicant has not exhausted the mechanisms that are otherwise available for resolution of a particular dispute, the institution of a suit in court for the same purpose would be premature, at the very least,” Justice Ngaah said.

In his ruling, Justice Ngaah found that the suit by the taxpayer was premature as it was filed in total disregard of the provisions of the Tax Procedures Act that provide that an appeal against a tax assessment ought to be determined by the Tax Appeal Tribunal first before escalating it to the High Court.

The Judge said he find the applicant’s motion dated 7 August 2018 misconceived and an abuse of the due process of the court and dismissed it with costs.

By Bernadette Khaduli

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