APPEAL DISMISSED

Tribunal allows KRA to demand Sh60m tax from company

Tax Appeals Tribunal says Muhugu Limited cannot reinstate its appeal against the demand.

In Summary
  • Muhugu Limited made the application on January 16, seeking to reinstate its appeal.
  • But the tribunal ruled that once withdrawn, the application cannot be reinstated. 
The Kenya Revenue Authority headquarters in Nairobi
The Kenya Revenue Authority headquarters in Nairobi
Image: FILE

The Tax Appeals Tribunal has allowed KRA to demand Sh60 million tax from Muhugu Limited after dismissing an appeal filed by the company.

Muhugu Limited made the application on January 16, seeking to reinstate its appeal. But the tribunal ruled that once withdrawn, the application cannot be reinstated.

 

The ruling paves way for Kenya Revenue Authority to enforce the collection of taxes which stood at Sh59,640,304 at the time of filing of the application for reinstatement of the appeal on March 15, 2016.

By the time the application for reinstatement was made, KRA had already placed a caveat restriction over the property of Muhugu Limited on any transfer.

The tax dispute started after KRA issued urgency notices to Muhugu Limited’s bankers, Kenya Commercial Bank, to recover the taxes.

The move prompted the company to seek to reinstate an appeal filed at the local committee in 2014. The appeal against KRA was withdrawn in 2016.

KRA said Muhugu’s application was done in bad faith and solely because of its quest for taxes that are otherwise due.

“Citing Section 27 (1) of the Tax Appeal Tribunal, 2013 which stipulates that an appellant may, by notice in writing, withdraw the appeal, the applicant exercised its rights,” the tribunal ruled.

However, on whether a matter that had been withdrawn be reinstated, TAT held that the appeal cannot be reinstated as the withdrawal was complete and effective. The tribunal relied on precedence of High Court rulings.

 

"We are clear in our minds and from the record that indeed nothing deserving of reinstatement remained before the tribunal."