•Justice Abigail Mshila declined to certify the matter as urgent and directed the application be served upon Keroche within seven days
•The case she said will be mentioned on September 22, before Justice Alfred Mabeya.
Image: Courtesy
The Kenya Revenue Authority (KRA) has rushed back to court seeking to reverse a decision that allowed the re-opening of the Keroche breweries processing plant in Naivasha.
KRA in an application before the Milimani Commercial Court says the order issued by Justice Alfred Mabeya contradicts previous orders it issued and a payment agreement plan effected in March this year between them and Keroche.
"It is the authority's view that the case filed in court and the orders sought go contrary to previous orders issued by the same court and the consent agreements arrived at and signed by the two parties," says KRA
Justice Abigail Mshila declined to certify the matter as urgent and directed the application be served upon Keroche within seven days
The case she said will be mentioned on September 22, before Justice Alfred Mabeya.
The application from KRA comes after Mabeya on Friday last week ordered KRA to unseal the packaging line, the stores and reactivate the exercisable goods management system in Keroche’s processing plant.
KRA was asked to generally allow Keroche to carry on business.
The Judge also said that within 7 days of re-opening, Keroche should pay KRA Sh8 million as the first instalment on the outstanding tax arrears.
The company is expected to pay a similar amount on the 30th of every month until September when the matter is scheduled for a hearing.
“Keroche should ensure that it continues to pay its current taxes without fail,” he said.
Keroche in an agreement signed on March 14 undertook to repay the agreed outstanding tax of Sh956 million in different instalments between March 20222 to December 2023.
It was supposed to make its first instalment of Sh30 million by April this year. This was part of the payment plan.
The company was however unable to commit to the plan. It cited adverse effects of Covid-19.
It expressed its inability to pay the instalments due to loss of market share, loss of distribution network, the reluctance of financiers, utilities and services, all of which were not anticipated at the time of signing the agreement.
“Owing to the covid-19 pandemic, they experienced adverse effects and suffered severe losses including loss of sales due to closure of bars and other restaurants that sell alcoholic drinks. The company was also forced to scale down its business operations and during that period it incurred tax arrears of Sh322 million,” says Keroche
It also argues it was pressured into signing the agreement.
When the company was unable to stick to the payment plan, KRA on May 15 closed Keroche’s plant.
They did so by sealing the packaging line and stores and deactivating the packaging line.
Keroche then filed an application in court asking it to intervene.
It was argued before Mabeya that the company risked suffering actual losses of 87,500 litres of beer, filtered and ready for packaging, 6 tanks of beer that is ready for filtration and packaging, and Sh350 million if the beer is destroyed.
It also cited Sh35 million being the monthly salaries, operational costs of utilities and loss of market share occasioned by its absence in the market.
It was these arguments that resulted in the court ordering the re-opening of the factory.