A company linked to controversial businessman Kamlesh Pattni has been stopped from disposing its assets and goods over a Sh2.2 billion tax dispute with Kenya Revenue Authority.
Justice Weldon Korir also stopped KRA and Keysian Auctioneers from auctioning Suzan Duty Free assets and goods at Jomo Kenyatta International Airport (JKIA) over the Sh2,207,884,743 tax arrears pending determination of the dispute.
“A question has been raised over this court’s jurisdiction to hear and determine the dispute and before that issue is decided, it is just and fair to restrain both parties from disposing the subject assets pending the ruling on jurisdiction,” ruled Korir.
Keysian Auctioneers had last week raided the company’s warehouse at JKIA under instructions from KRA and attached several assets, including assorted alcoholic beverages and a truck. The inventory also had office equipment and electronic appliances marked for public auction.
The taxman was seeking to recover Sh2.2 billion from Suzan Duty Free which linked to Diplomatic Duty Free Ltd owned by Pattni. The amount includes unpaid principal taxes of Sh748,427,763 and interest of Sh1,459,456,980.
The company however filed an urgent application claiming that they don’t owe KRA any tax arrears having cleared their tax obligations and issued with a clearance certificate.
Through lawyer James Nyiha, the company argued that it was not given a fair hearing before the decision to attach its assets, and that the taxman had cited the wrong company arguing that it was Diplomatic Duty Free Ltd which owed tax arrears.
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“The company informed them that it was not Diplomatic Duty Free Ltd and that attaching its properties was illegal but they refused to accede to that fact. It is against the right of the company ti do business and own property,” said Nyiha.
When the matter came for hearing before Justice Korir, KRA through lawyer Marion Gitau raised an objection arguing that the court had no jurisdiction to determine the dispute.
According to Gitau, the company had raised similar issues before Justice Pauline Nyamweya but their case was dismissed on September 30.
“The company is forum shopping in clear abuse of the court’s process. The issues they have raised have already been determined by a judge of same jurisdiction, they cannot come again through the back door to another court seeking similar orders,” said Gitau.
She added that the company had not raised any new issue to warrant the High Court’s intervention and that KRA followed the right procedure in demanding the tax arrears saying that that they sent a distress order in July last year but the firm refused to comply.
She also dismissed claims that it was Diplomatic Duty Free which owed the tax, stating that it was Suzan Duty Free which took over management of its shops and operations at JKIA and therefore liable to settle the tax debts.
She urged the judge to dismiss the case for lack of jurisdiction given that the same issues had been litigated before Justice Nyamweya. The judge said he will delivere a ruling on October 31.
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