SDV Transami Kenya Limited v Commissioner of Customs Services; Energy Investments Limited (Interested Party) (Civil Appeal 225 of 2015) [2021] KECA 105 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a customs agent is personally liable for short-levied import duties, alongside the importer, even where their contract says otherwise.
What this practically means
#Executive summary
#Key legal issues
#Whether the 4th January, 2011 letter was a valid application for review under Section 229 of the Act
It was not a valid review; the decision had already been made on 17th August, 2010 and no appeal was lodged, so a further review of an already-reviewed decision was frivolous.
The respondent had investigated, sought more time, and made its decision on 17th August 2010 that the wrong tariff had been used. The appellant never appealed to the Tax Appeals Tribunal under Section 230. The 30th December 2010 letter was a follow-up demand, not a fresh reviewable decision, and demanding a further review was untenable.
Whether the respondent had authority under Section 135(1) to demand the short levy
Yes. Duty was short levied through the appellant's wrong tariff declaration, and the respondent, as the proper officer, had jurisdiction to demand the taxes, penalties and interest.
The Court quoted Section 135(1), under which a person on whom a short levy falls must pay on demand by the proper officer. Having established the short levy from the wrong tariff declarations, the Court found the demand lawful.
Liability of the agent vis-à-vis the importer for short-levied duties
Both the appellant (deemed owner under Section 146/147) and the interested party (liable for its agent's acts under Section 148) were liable; the respondent could not be faulted for demanding payment from either or both.
Although the parties' contract clause 14 disclaimed agency, the relationship was one of agency by virtue of Section 146 of the Act. Section 147 deems a duly authorized agent the owner, personally liable for duties, while Section 148 keeps the owner liable for the agent's acts. The demand was therefore lawful and neither party could be exonerated.
Whether certiorari and prohibition were merited
No. The demand-making process was untainted by illegality, irrationality or procedural impropriety, and prohibition was unavailable against an already-made decision.
Relying on the Pastoli formulation, the appellant had to establish illegality, irrationality or procedural impropriety. None was proved. The appellant had been heard through extensive correspondence, and the Gathenji Njoroge principle bars prohibition against completed decisions.
Legal principles established
#- A duly authorized agent who performs acts on behalf of the owner of goods is deemed the owner for purposes of the East African Community Customs Management Act and is personally liable for duties, and the owner remains liable for the acts of its agent; the Commissioner may lawfully demand short-levied taxes from either or both.
- An order of prohibition cannot issue against a decision that has already been made; only certiorari can quash a completed decision.
- Where the Commissioner fails to communicate a review decision within the period in Section 229(4) of the Act, he is deemed to have allowed the application under Section 229(5).
Court orders
#- 1.The appeal is dismissed with costs to the respondent
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 29(1) of the Court of Appeal Rules; judgment delivered under Rule 32 of the Court of Appeal Rules as Githinji, JA had retired
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "SDV Transami Kenya Limited v Commissioner of Customs Services; Energy Investments Limited (Interested Party) (Civil Appeal 225 of 2015) [2021] KECA 105 (KLR)", Case Analysis (2021). Court of Appeal Civil Appeal (Nairobi) — judicial review appeal. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/105/eng@2021-10-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.