The High Court has ruled in favour of KRA, in a case filed by Choppies Enterprises Limited, seeking to unfreeze their accounts pending resolution of an ongoing tax dispute.
In a statement released on Tuesday, Justice David Majanja held in favour of KRA and dismissed the application filed by Choppies on Tuesday with costs to the revenue authority.
KRA's position was to freeze Choppies bank accounts to secure taxes owing from Choppies of Sh173,388,416.
"Choppies had filed an application in Court under Certificate of Urgency seeking orders to unfreeze their accounts pending completion of an ongoing tax dispute," the statement read in part.
The supermarket is a retail supermarket chain with origins in Botswana.
Its move was informed by the fact that Choppies, a supermarket which took over Ukwala Supermarkets Limited, was in the process of winding up business in Kenya.
"KRA adduced evidence in Court to show that Choppies has already sold their branches, assets and stocks to Tusker Mattresses Supermarkets, Chandarana Supermarkets Limited, Quickmart Supermarkets Limited and Appmatt Limited even without informing KRA in spite of the ongoing tax dispute," KRA added.
The court in its ruling found that KRA was right in freezing Choppies Bank Accounts to secure the disputed taxes of Sh173 million.
The Court further held that KRA had provided undisputed evidence that Choppies was disposing of its assets and winding up business in Kenya.
"Choppies was faulted for not disclosing their financial position. They did not disclose how much was held in their accounts and what they would realize from the sale of the assets," KRA said.
The court found that Choppies should provide security for taxes to be found due and payable to KRA in view of the fact that they are closing business in Kenya.
Further, the court gave Choppies and KRA 14 days to explore an amicable settlement in the tax dispute.
