The High Court on Tuesday declined to suspend 16 percent VAT on fuel.
Judge Chacha Mwita ruled that the legislative process was incomplete until President Uhuru Kenyatta assents or rejects the Bill.
Judge Mwita further directed activist Okiya Omtatah to serve Treasury Cabinet Secretary Henry Rotich with suit papers before Monday when the case will resume.
Omtatah and activist Wyclife Nyakina had filed an urgent suit on Monday seeking the court’s intervention to suspend the new tax.
They said it was insensitive and immoral for the Government to increase fuel prices at a time when the majority of Kenyans were struggling to make ends meet.
“Increase in price of petroleum products is a definite threat to the socio-economic rights of Kenyans. It is also a threat to national security given that 60 per cent of Kenyans depend on petroleum products for industrial and domestic use and the increase in price affects the cost of everything,” said Mr Omtatah.
The fuel levy was first factored in the Finance Act 2013. Implementation was however suspended for three years until 2016, but was again put on hold for another two years, which elapsed on August 31.
Last week, MPs again passed a motion to suspend the tax provision until 2020, but the National Treasury, Kenya Revenue Authority (KRA) and Energy Regulatory Commission (ERC) defied the resolution.
Treasury enacted the new fuel tax measures on September 1 and the ERC adjusted fuel prices upwards.