Pwani Oil loses Sh130 million tax demand case

Kenya Revenue Authority (KRA) can now pursue Pwani Oil Limited over more than Sh130 million in unpaid taxes..

The taxman has received the green-light to demand taxes after the High Court dismissed the case filed by the Mombasa-based cooking oil processing firm on account that it could not make a finding without facts placed before it.

Judicial Review Division Judge Weldon Korir in his judgement yesterday, noted that the court could not have assessed the truth from affidavits alone but also needed to have material facts from the company.

“Judicial Review court is involved on issues of fact. The proceedings on affidavit are not a matter of procedure,” Judge Korir ruled.

Pwani Oil moved to the High Court seeking to stop the taxman from slapping it with a Sh134,883,572 million claim for failing to export goods marked for sale outside the country between 2012 and 2013. The firm in its suit lamented that despite filing its tax compliance documents, the taxman held on to demand. The dispute arose over importation of crude palm oil for making oil products for exports. The company says that it ought to have been exempted from paying the monies as it brought in the raw material, manufactured and exported the end products as required under remission scheme.

The condition for reduction of tax, Pwani Oil says was that they ought to have imported crude palm oil to manufacture goods for export and ensure the raw material was utilised for that purpose only. In the suit filed by their lawyer Boniface Munyao, the company argued they had complied with the demands from the taxman, though KRA rejected certificates that had been produced to show that they had indeed exported soap and cooking oil, among other things.

“KRA’s decision to turn around and demand additional taxes notwithstanding that it had authorised the cancellation of security bonds held by Pwani Oil for the purposes of ensuring compliance with the remissions conditions is irrational, unreasonable, illegal, unlawful and unconstitutional,” Munyao said.

Judge Korir ruled, “The application is dismissed with no orders as to costs.”