Court halts Sh1.3b Bidco tax demand case

The High Court has temporarily halted hearing of a case filed before the Tax Appeal Tribunal by oil products maker Bidco Oil Ltd over Sh1.3 billion tax demand.

High Court Judge Joseph Sergon gave the orders after Kenya Revenue Authority moved to court since its only witness before the tribunal was kicked out after his statement was filed out of time.

The judge gave temporary orders early this month but he extended them Thursday to September 28, 2016 when the case will be heard.

“The matter is adjourned to September 28, 2016 for the inter parties hearing (when both parties will argue their case). Interim orders are extended,” the judge ruled.

Kenya Revenue Authority in its case before High Court laments that failure to have its witness John Gathawa in the case will deny it the chance to have a fair opportunity to present its arguments against the firm.

“The appeal before the tribunal is essentially a dispute over a colossal amount of tax arrears totalling over Sh1,377,505,229, which ought to be assessed fairly by the tribunal and the exercise includes calling all crucial witnesses to testify and produce relevant evidence and documents to the tribunal,” court papers filed by lawyer Waweru Gatonye read.

Cooking oil import

According to KRA, the witness was thrown out of the tribunal proceedings as his statement was filed out of time. “There will be great public prejudice if the tribunal were to proceed with the hearing and determination of the tax dispute without affording the commissioner of customs an opportunity to call an expert witness to demonstrate that the taxes she intended to collect were due from the taxpayer,” the judge was told.

In the tribunal, Bidco lamented that the commission first demanded, on September 11, 2009 to pay Sh702,334,527 for allegedly undervaluing imported crude palm oil, crude de-gummed soya beans oil and crude palm kenel oil among others.

Bidco imported the oils from Josovina commodities PTE in Singapore. According to the cooking oil maker, KRA went ahead to issue an agency notices to its banks and distributors.

“Before the commissioner general could intervene in the matter in respect of erroneous valuation on September 23, 2009 the commissioner of customs in violation of EACCMA Act and the breach of the appellant’s (Bidco) right of appeal enshrined in section 257 issued agency notices. The said agency notices were in breach of the applicant right of appeal against the decision of the commissioner of customs,” the papers filed by Bidco before the appeals tribunal read.