The High Court has dismissed an application by the Kenya Revenue Authority to have activist Okiya Omtatah deposit a security in a case where he is challenging the proposed excise stamps on bottled drinks.
Omtatah sued KRA for proposing the excise stamps on bottled water, juices, soda, non-alcoholic drinks, food supplements and cosmetics that are locally manufactured or imported.
In his ruling, Justice John Mativo said public interest litigation is meant to enforce constitutional rights and a requirement for security of costs would create an unnecessary barrier to aggrieved citizens.
“It is not enough to plead that a court order is causing hardship. It must be demonstrated that there are justifiable grounds to warrant the court to disturb its orders,” the judge said.
Mativo further extended the sanctions he imposed on October 30 pending the outcome of the dispute.
The judge said KRA, the Treasury and Swiss firm, SICPA Securities, had not complied with the court order to file their responses within 21 days.
Mativo directed the KRA to file responses to the petition and declined to lift conservatory orders suspending the new taxation regulation that was to take effect from November 1.
Under the contested regulation by KRA and the Treasury, manufacturers were required to affix new-generation excise stamps on their products.
Omtatah moved to court challenging the taxman’s decision, communicated in legal notices published on June 18 and September 5, 2013, creating the Excisable Goods Management System without public participation and sanction by the National Assembly.
He says there was no public participation involving manufacturers and importers before the agreement was signed. The Public Investments Committee of the 11th Parliament reportedly suspended the implementation of the EGMS pending the conclusion of investigations by the National Assembly following a petition to Parliament filed in June 2016 by the Kenya Private Sector Alliance.
Omtatah says the EGMS will illegally and unconstitutionally expose manufacturers, importers and consumers to the burden of meeting extra production costs.
He seeks to protect the public from the irregular, unlawful, oppressive and unreasonable burden of higher living costs to be brought on by the levy.
The case will be heard on January 31.