Big win for embattled tycoon Humphrey Kariuki

A commercial court has set aside orders freezing the bank accounts of firms belonging to billionaire businessman Humphrey Kariuki over a Sh3 billion tax evasion claim.

Commercial and Tax Divisions judge Wilfrida Okwany said the Kenya Revenue Authority did not place any material before court to satisfy the continued existence of the orders.

KRA and officials from the Directorate of Criminal Investigations in February raided Kariuki's factory in Thika, shut it down and obtained  orders that froze bank accounts of Wow Beverages and Wines of the World Limited over tax evasion claims.

The companies then filed applications in court seeking to have the orders  discharged.

Kariuki in the applications argued that the orders were obtained through deliberate non-disclosure and misrepresentation.

He accused KRA of lying to the court and bringing dishonest allegations to obtain orders freezing his companies.

The judge yesterday said it was not in dispute that the KRA has not issued Wow Beverages with an assessment of the taxes due if any.

"All KRA stated is that the investigations on Wow Beverages accounts/affairs is intrinsic and involves a third party whose identity was not disclosed," she said.

"My finding is that Section 43 (7) is couched in mandatory terms and provides that KRA shall notify the taxpayer of an assessment within 30 days," she added.

But the 30 days from the date the orders of preserving the funds of Kariuki's firms were issued lapsed on March 24.

During hearing, KRA had conceded that under the law, the impugned orders ought to be in force for only 30 days within which time KRA ought to have issued the firms with an assessment of the taxes due.

The tax agency however did not issue the firms with an assessment on grounds that the intrinsic nature of the investigations being carried out by a third party necessitated an extension of the 30 days.