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Court of AppealAllowedCivil Appeal 124 of 2017· [2022] KECA 808 (KLR)

Kenya Revenue Authority & another v Mutamba & 26 others

Court of Appeal
24 June 2022
DMD. K. MusingaAMA. Mbogholi-MsaghaKLDr. K. I. Laibuta
2,104 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that KRA gave vehicle owners a fair chance to respond to a tax verification notice, so ignoring such notices forfeits your right to complain.

What this practically means

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Executive summary

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The Court of Appeal allowed the Kenya Revenue Authority's appeal against a High Court judicial review judgment (Odunga, J., 7 December 2016) that had quashed a notice published in the Daily Nation on 21 May 2012 and prohibited KRA from impounding the respondents' motor vehicles. The High Court had found that the respondents were denied an opportunity to be heard before forfeiture notices were issued in respect of outstanding import duty on their vehicles. The Court of Appeal, per Musinga, P., Mbogholi-Msagha and Laibuta, JJA, in a single unanimous judgment, held that the notice was issued within the ambit of sections 234(3) and 236 of the East African Community Customs Management Act, 2004, which mandate verification of entries and production of documents. The notice made no immediate demand for payment of duty; it required owners to liaise with KRA's motor vehicle investigation section and to present their vehicles and documents for verification, thereby opening an avenue for them to present their case. The respondents declined to take up that opportunity, and the appellants neither shut their doors nor refused representations. Applying the audi alteram partem principle, the Court held the respondents were given prior notice and an opportunity to be heard, and the trial judge's finding of a denial of fair hearing could not stand. The High Court judgment was set aside in its entirety, with costs of the appeal to the appellants. The respondents neither appeared nor filed submissions.

Key legal issues

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01

Whether the notice published in the Daily Nation on 21st May 2012 afforded the respondents an opportunity to be heard before any forfeiture or demand for duty

Holding

The notice was plain and unambiguous, made no immediate demand for payment, and opened an avenue for the respondents to present their case; the right to be heard was satisfied.

Reasoning

The court construed sections 234(3) and 236 of the EACCM Act as mandating verification of entries and production of documents. The notice required owners to liaise with KRA's motor vehicle investigation section and present vehicles and documents for verification. Since the respondents declined to take up that opportunity, they could not claim they were denied a hearing. The trial judge's contrary finding was set aside.

p. 4

Legal principles established

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  • A notice requiring owners of vehicles with outstanding tax issues to present vehicles and documents for verification affords those owners an opportunity to be heard; failure to take up that opportunity cannot found a claim of denial of fair hearing.

Court orders

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  1. 1.Appeal allowed
  2. 2.Judgment of the trial court dated 7th December 2016 set aside in its entirety
  3. 3.Appellants to have costs of the appeal

Authorities

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Legislation

  • East African Community Customs Management Act, 2004section 1(2)
  • East African Community Customs Management Act, 2004section 234(3)
  • East African Community Customs Management Act, 2004section 236
  • Kenya Revenue Authority Act, 1995section 4
  • Constitution of Kenya, 2010Article 47(1)
  • Constitution of Kenya, 2010Article 50(1)

Cases cited (2)

  • Selle & Another v. Associated Motor Boat Co. Ltd & Others
    [1968] EA 123

    Duty of a first appellate court to review the evidence and satisfy itself the decision was well-founded.

  • Pashito Holdings Limited & Another v. Paul Nderitu Ndungu & 2 Others
    [1997] eKLR

    The audi alteram partem rule as an indispensable requirement of natural justice.

On appeal from
High Court of Kenya at Nairobi
Judicial Review Misc. Application No. 233 of 2012
Jurisdiction invoked
First appellate jurisdiction over the High Court (judicial review appeal)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Revenue Authority & another v Mutamba & 26 others", Case Analysis (2022). Civil Appeal 124 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/808/eng@2022-06-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.