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KURA OFFICIAL TO TESTIFY IN MP’S GRAFT TRIAL.

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BY SAM ALFAN.

An official from Kenya Urban Roads Authority (KURA) is set to testify in a graft case against Embakasi North MP James Mwangi Gakuya.

Moses Onyango who is an officer from the maintenance department in charge of the constituency will testify in the trial where Gakuya and 10 other CDF officials are facing grafts charges relating to Sh40 million project in his constituency. He will take the witness stand on Wednesday morning.

Gakuya has denied four counts of conflict of interest after he allegedly awarded some companies linked to him the works totaling to Sh39 million.

Prosecution alleges that the MP awarded the contract for construction of Muoroto Road in Embakasi to Mabaks Enterprises.

The tender was allowed allegedly worth Sh11.6 million yet the MP, who is the patron to the CDF knew that he has an indirect private interest to the company.

Other companies that allegedly benefited are Hunyu Bush Clearing & Nurseries and Tresmu Investments ltd, which got tenders for construction of DO’s Road and Cinema road in the constituency.

It is alleged that he committed the offences between Match 23, and September 5, 2015 at the Embakasi Constituency CDF offices.

The court also heard that Gakuya together with Patrick Waruingi, being the proprietors of Mabaks enterprises allegedly received a total of Sh19.6 million.

Gakuya is charged alongside Waruingi and Salome Nduta Kamumui through Tresmu Investments are alleged to have fraudulently acquired a total of Sh12.5 million.

Leah Waithera Guchu, the Embakasi North CDF account manager denied six charges of failing to comply with laws relating to management of public funds.

Cleophas Omariba Oyaro, an acting City County Accountant also denied similar charges, for clearing the payments to the companies.

BUSINESSMAN NARRATES HOW HE WAS DUPED INTO FAKE TENDER FOR SUPPLY OF LAPTOP AT DP’S OFFICE.

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BY NT CORRESPONDENT.

A businessman who fell victim over a fake tender for the supply of laptops at the Office of the Deputy President has narrated how he was duped into the scam.

Stephen Ngei Musyoka who claimed to have lost Ksh181 Million in the scam said he believed that the tender was genuine.

Musyoka who is the Director of Makindu Motors told Chief Magistrate Martha Mutuku that he received an email from the office of DP alongside his co-director Charles Kamolo Musila confirming that they had won the said tender.

“My co-director Charles and I received an email from the office of DP confirming that they had received our profile and were ready to work with us in the year 2019/2020 for supply of laptops as direct sourcing to the ministry of Devolution,” he told the court.

He said two representatives of Makindu Motors were invited into the office of DP for a meeting to finalize the deal where they were ushered in by a Mr Osore and they met Allan Chesang.

The two signed a non-disclosure agreement which had the official logo of the office of the DP. The tender was to supply 2800 pieces of laptop.

In the case, the accused Allan Sang, Teddy Awiti, Kelvin Kyongesa, Augustine Matata, Joy Kamau, James Makhoha alias alias Wanyonyi and Johan Osore are facing charges of conspiracy to defraud.

It is alleged that on diverse dates between May 30, and August 12, 2018 in Nairobi County jointly with not before court, they conspired to defraud by means of offering alleged tender documents L. P. O No. POQ 422 under the names of the Office of the Deputy President for the supply of 2,800 laptops make HP Pavillion 8 generation valued at Sh180 million.

It is also alleged that on diverse dates between June 1 and August 12 in the year 2018, with others not before court, the seven willfully and unlawfully obtained 2,800 laptops pieces valued Sh180 million from Makindu Motors limited, a company situated along Mombasa road.

They are accused that they presented the tender documents claiming to be genuine and issued by the office of the Deputy President.

They are also facing charges of making documents without authority and handling the said stolen property. The hearing continues.

GOLD SCAM VICTIM TO TESTIFY VIA VIDEO LINK.

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BY PHOEBE WANJOHI.

A trader who was swindled of Sh4.2 million by gold scammers will testify through a video link from South Africa.

Amit Srivastava who is currently out of the country will give his testimony on January 28 in a case where Sikanda isamel Abdalaa alias Salim is accused of obtaining the money claiming that he could sell him gold.

Sikanda has been the Director of Criminal Investigations radar for a while over involvement in fake gold transactions.

He is accused that on diverse dates between March 13 and 28, at Riverside and Westgate Mall obtained from Amit of Ibrahim Ahmed General Trading of USD 42, 600 equivalent to Kshs 4,260,000 by falsely pretending that he was in a position to sell to him 10 kilograms of gold, a fact he knew to be false.

The court heard that on March 13, at an unknown date and place with others not before court and with intent to defraud, Sikanda made a pro-forma invoice dated March 11, 2020 to Ahmed Ismael Ibrahim general trading company, purporting it to be genuine drawn Kunil Young International Ltd.

He is also charged with impersonation. The charge sheet stated that on March 7, at Riverside in Lavington area, Nairobi with intent to defraud, Sikanda falsely represented himself to be the CEO of Kanul Young International limited.

Sikanda denied all the charges and was released on cash bail of Sh1 million or an alternative bond of Sh2 million.

Sikanda has several criminal cases pending at the Milimani law Courts. In yet another case, he is accused of obtaining Sh58.4 million from a foreigner by claiming he could sell him some 435kgs of gold.

Four other people have been listed as witnesses in the case.

COURT STOPS PLANNED SWEARING IN OF KANANU AS NAIROBI GOVERNOR.

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The High Court has stopped the intended swearing-in of Deputy Governor Anne Kananu Mwenda as the Nairobi County boss.

Justice Antony Mrima issued the conservatory orders, restraining the swearing-in of Kananu after the Law Society of Kenya (LSK) challenged her vetting and approval last week.

“A temporary injunction is hereby issued restraining the respondents, their agents or servants from swearing in Anne Kananu Mwenda as the Governor of Nairobi City County Governments pending hearing of the application”, ordered the judge.

The judge said he issued orders pending appointment of a bench the Chief Justice to hear and determine the matter.

This is LSK moved to court seeking orders to suspend the decision by the County Assembly made on January 15 2021 approving the nomination of Anne Kananu Mwenda as the Deputy Governor of Nairobi City County.

“A conservatory order be issued suspending the decision of the County Assembly made on January 15, 2021 approving the nomination of Anne Kananu Mwenda as the Deputy Governor of Nairobi City County pending hearing and determination of the petition “, urged LSK.

Through Omwanza Ombati , LSK argued that the hurried vetting and approval of Kananu as the Deputy Governor and her eventual swearing in was unconstitutional and a calculated political move to avoid a by-election in Nairobi.  

The Nairobi governor’s position fell vacant after Mike Mbuvi Sonko was impeached by the County Assembly and the decision endorsed by Senate.

The County Speaker Benson Mutura was made the acting governor, pending the election of the substantive holder.

But Kananu was hurriedly vetted and sworn in in a process that took about five hours. Wanyama said the state actions on Friday undermines the right of the people of Nairobi to elect a Governor and Deputy Governor of their choice. He added the acts also sets a dangerous precedent in the application of the rule of law.

“That this swearing in is problematic, unconstitutional and a brazen attempt to undermine the process of a by-election as anticipated in Article 182(5) of the Constitution of Kenya,” says LSK.

He said the county government was likely to proceed to commit further acts of illegalities by swearing in Kananu as the Governor of Nairobi City County who will in turn nominate yet another person for appointment as Deputy Governor.

It is the LSK’s argument that at the point of the vacancy occurring at the office of the Governor, there was no deputy governor to assume the office of the governor for the remainder of the term as prescribed in Article 182 (2) of the Constitution. 

“The provisions of 32D of the County Governments Act 2012 as read with section 4 of the Public Appointments (County Assemblies Approval) Act, No. 5 of 2017 require that after vetting and approval of Anne Kananu Mwenda for the position of Deputy Governor, a formal appointment by the Governor shall be made. This appointment shall be in writing and made under a county public seal, a County Government symbol is provided for at section 4 of the County Government Act, 2012. Thereafter, a public oath of office is administered,” says LSK in the court papers.

LSK said it was not possible for Kananu to be sworn into office as Deputy Governor without the formal statutory appointment.

“Equally clear, the Speaker of the County Assembly who acts as Governor under Article 182(4) of the Constitution does not have constitutional or statutory powers to appoint a Deputy Governor under section 32D of the County Governments Act 2012. It creates fundamental legal problems and absurdities to posit otherwise. Indeed, it undermines the constitutional objective of a by-election as aforesaid.”

LEGISLATOR SUES KQ FOR SWITCHING HER TO ECONOMY CLASS.

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BY SAM ALFAN.

An Orange Democratic Party nominated Senator has sued Kenya Airways for booking her on an economy class flight despite paying for business class.

Senator Beatrice Kwamboka wants the airline compelled to compensate her for violating her rights. She also wants KQ forced to reimburse the difference in airfare chargeable to persons that were travelling on December 28, 2020 in economic class compared to those travelling in the business class of its aircraft.

“This court does make an order directing the Respondent to pay to the Petitioner exemplary and /or punitive damages or such other relief as the court considers proper in the circumstances”, urged Kwamboka.

The legislator wants the High Court to declare that the unilateral decision to transfer or move her from the business class of its aircraft to the economic class despite her initial booking and payment is not only in dignifying as it offends the social status.

She argues that the move was an illegal exploitation of her right to property as provided for under article 28 and 40 of the Constitution.

Kwamboka says the transfer after booking and payment of the airfare was discriminatory of her as against other passengers, an affront to her consumer rights, unfair, unreasonable and unjust exercise of administrative action as provided and guaranteed under the Constitution.

She said on December 6 last year and in preparation for the December holiday festivities, she and her two children booked and paid a flight with the KQ from Nairobi to Mombasa.

She was issued with electronic tickets referenced as QSBBTH, QRZ9HZ and QRZ9HZ respectively which highlighted in no uncertain terms that she would depart to her Mombasa destination on the December 28, at 1300 on board the business class of one of the Respondent’s aircraft.

But she was shocked on the travel date to learn that her seat had been improperly and to her inconvenience ‘sold’ to obviously another favoured client without first offering her an apology.

Consequently, she said her children were forced to travel without her and were left stranded at the Jomo Kenyatta International Airport for hours before she could find an alternative means of getting to Mombasa.

“That the decision to shift her from the business class of the Respondent’s aircraft to their economic class was without basis or any reasonable justification as the Petitioner had long reserved and paid for her seat at the business class and subsequently issued with a receipt”, she claims.

She said the action of transferring her from the business class to the economic class without her participation or consultation offends her right to a fair administrative action that is fair and her right to receive in writing reasons for such an adverse action being taken against her.

KQ’s unilateral decision to transfer or shift her from the business class to the economic class and consequently offering her reserved seat to another client despite the common understanding that she had long and previously booked her seat and paid for the same is a clear demonstration of unfair and unjust discrimination of the Petitioner.

 “The Petitioner has hitherto failed to understand the basis of the Respondent’s conspicuous acts of discrimination and bias. Moreover, the petitioner is deeply disturbed by the callous manner in which she was treated by the Respondent’s employees and humiliated by being forced to travel in a class that is not commensurate to her honourable standards, lifestyle and financial ability”, she claims.

She claims KQ have hitherto ignored to apologies to her or reimburse the excess air fare that the Petitioner had paid in the hope of travelling in the business class as opposed to the economic class despite a demand letter being forwarded to them demanding for the apology and compensation.

JUDGES AND JUDICIARY CONDEMNED OVER KANANU’S SWEARING IN.

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BY SAM ALFAN.

Lawyers have criticised the hurried manner in which Nairobi Deputy Governor Anne Kananu Mwenda was vetted and sworn into office on Friday.

Moreso, the lawyers took a swipe on the Judiciary and High Court Judge Anthony Mrima for his ruling dismissing cases seeking to block Kananu’s vetting.

Justice John Mativo, who presided over the swearing in at KICC grounds was also criticised for taking part in what they termed as a constitutional coup.

In a post on Facebook, lawyer Omwanza Ombati questioned how a Judge was on standby to swear in Kananu a few minutes after vetting and approval by the county assembly.

“The whole charade brings disrepute to the judiciary, that compounded by the fact that there was another judge on stand by, on a minutes notice to swear in Anne Kananu as Deputy governor.

“Just to demonstrate, when the Speaker (Mutura) was initially meant to be sworn to act, a judge refused to swear him because he first had to ascertain whether he had a degree certificate and secondly refused because the swearing was slated beyond the time set out in law (2 pm) so what changed today? He posed.

Senior Counsel Ahmednasir Abdullahi said that the acting Chief Justice Philomena Mwilu needs to explain urgently the shenanigans surrounding the fraudulent stage managed swearing in.

“Who was behind this JUDICIAL SCAM? The office of the DCJ or the Office of the Chief Registrar of the Judiciary? Ahmednasir asked.

Ahmednasir wondered if the Acting CJ Mwilu wasn’t aware of the swearing in, who then authorised the judge who conducted the ceremony?

“Did the judge satisfy himself that the acting CJ authorised the ceremony he conducted? Do we now have PRO and ANTI-handshake JUDGES in the Judiciary? He posed.

Ahmednasir further posed another question What is JUDICIAL IMPUNITY?

“When judges SYNCHRONISE THE INTERPRETATION of the CONSTITUTION/LAW to the express POLITICAL DESIRES/GOALS of Govt and Was today’s decision by Mrima J in KANANU CASE one of JUDICIAL IMPUNITY? YES, It’s a classic case of JUDICIAL Impunity. he added.

Justice Mrima’s ruling received a huge backlash as lawyers said his interpretation was erroneous.

Omwanza said that the interpretation by Justice Mrima of the constitutional court was clearly a road that was cut and curved to the very end.

“Eurprisingly (Mrima J) acknowledged in his ruling that it was possible for Anne Kananu to end up as governor, from the path he had allowed, however he said that this can be corrected at the end (not true other than through a fresh election petition) because both disputants were right in their arguments”, he said in a tweet.

“An actual High Court Judge, (robbed and wigged) who has taken an oath to defend the constitution was available or at standby and at moments notice; through executive fiat to swear Anne Kananu as Deputy Governor of Nairobi”, he added.

Omwanza termed the whole episode as incredibly absurd and violates the constitution and Assumption of Office Act.

“Obviously the judge was aware or ought to have been aware of this. This is equivalent to a judge swearing an individual who vide a coup detat assumes office of the President! But there was no gun barrel pointed towards the judges head”, he added.

He said the action by judge amounted to gross misconduct and violation of the constitution. i.e The swearing in was not in public and neither Gazetted.

He added that the individual was not vetted properly in accordance with the law, there was no public participation and the heightened expedition was meant to defeat lawful processes and the intent of the constitution.

He further said that they shall end up with Kananu assuming office of Governor, not by election, but through judicial craft, then she shall appoint a deputy, not through elections but through judicial craft to govern Nairobi as appointees of someone we do not know and therefore without constitutional authority to govern Nairobi. Whichever way you look at it, looks like quantum physics without a formula.

“The coincidences are simply incredible” he added.

Senator Kipchumba Murkomen while replying to Ahmednasir tweet he was shocked by judge Mrima decision especially because it is indefensible and violates all the rules of interpretation including logic and he fear for our Judiciary.

Law Society of Kenya president Nelson Havi said he would like the ideal petitioner to challenge the fraud swearing in.

“Problem is that deep State will appoint a Lawyer to take over and withdraw the petition as soon as it is filed”, he added.

Another lawyer Steve Ogolla said that Kananu cannot lawfully assume office of Governor because at the time the ousted Mike Sonko impeachment, she was not the substantive Deputy and cannot therefore lawfully serve as Deputy under the Governor-elect because the law permits Governor-elect to nominate own Deputy.

He added that Nairobi County Assembly cannot lawfully vet and approve her as the Deputy Governor.

“It is an unconstitutional maneuver lacking in merit and seriousness”, He added.

Lawyer Waikwa Wanyoike who worked with Katiba Institute said the move by the Assembly to Vet and approve Kananu as the DG was having blessings from president Uhuru Kenyatta and opposition leader Raila Odinga.

“Let it be on record that what Nairobi County Assembly has done in vetting and approving Anne Kananu as DG and obviously making her governor – with the urging of Uhuru and Raila – is a constitutional coup”, said Waikwa.

Activist Okiyah Omtatah has already filed a notice of Appeal to challenge Justice Mrima ruling.

BUNGE LA WANANCHI ACCUSE IN KANANU PETITION OF BIAS.

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BY NT CORRESPONDENT.

The president of Bunge La Wananchi Henry Shitanda has filed a complaint against High Court Judge Anthony Mrima over the manner in which he handled a petition filed seeking to block vetting of Anne Kananu Mwenda as Nairobi Deputy Governor.

In the letter filed before Judicial Service Commission, Shitanda claims that the judge declined to issue conservatory orders sought by Okiyah Omtatah without any judicial basis at all, an act he says shows interference by the state machinery.

“There are glaring ambiguities which point to bias and interference granted that the same judge issued various orders in favor of the respondents and in particular in favour of Anne Kananu,” claims Shitanda.

He said the move to allow the vetting of Kanany by Nairobi MCAs demonstrates that the judge went against all the principles of law regarding issuance of the conservatory orders.

Shitanda claims that the judge held there was a prima facie case but surprisingly while declining to issue conservatory orders, stated that they are remedial measures that the court can take even after the vetting.

The Judge was of the view that there was no prejudice which will be suffered in the event that the conservatory orders are not granted but Shitanda says the decision is absurd, highly illogical and a confirmation of bias by the judge.

He said the matter arises after ousted city boss Mike Sonko had revoked Kananu appointment as his deputy governor.

He further argue that the cases filed by Sonko are now under siege by state machinery to ensure sanitization of the illegality by the county assembly and the senate impeaching Sonko.

INVESTOR CHALLENGES PROSECUTION OVER BOTCHED DEAL.

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BY SAM ALFAN.

A New Zealander has moved to court to block his prosecution over allegations of obtaining Sh102 million.

Christopher White, the director of Danish Brewing Company E. A. and King Beverage limited wants the court to suspend criminal charges against him, pending the determination of the case.

The said money is claimed to be arising from a business deal between his company and Patiala Distributors limited.

He claims that he was arrested and questioned by DCI officers for allegedly obtaining the money by false pretense from Patiala Distributors Limited with a promise to deliver Tuborg beer 500ml cases which were never delivered.

He also wants plea taking or pre-trial hearing before a Milimani court suspended. “A conservatory order be issued staying further proceedings including any plea taking or pre-trial hearing in Milimani Criminal Case No. E4378 of 2020 pending hearing and determination of the case,” he pleaded.

The businessman also wants Inspector General of Police Hillary Mutyambai and Director of Criminal Investigations George Kinoti ordered to release his passport.

“It is just that the court should suspend the proceedings in the criminal case to preserve the Petitioners’ right to have the petition heard and determined,” he submitted.

White claims that allowing the criminal case to progress will subject him to ignominy, ridicule and contempt as Patiala will undoubtedly publicise the plea taking hearing in the media to tarnish his reputation. 

He further claims adverse publicity and allegations of a criminal nature when no such intent or conduct exists has the capacity to ruin his reputation thereby adversely affecting the colossal investments made in Kenya and his right to dignity as guaranteed under Article 28 of the Constitution.

He told the court that no prejudice will be occasioned on the IG and DCI should the criminal case be halted temporarily to allow him ventilate the merits of the petition before the court.

White says that he stands to suffer irreparable harm to his reputation with foreign investors if the Criminal Case is allowed to proceed to plea taking.

He claims he was unlawfully arrested, detained, and harassed over what is a purely civil and commercial dispute between Danish Brewering and Patiala resulting from an agreement dated December 2, 2019 (the Distributorship Agreement) and amended by an agreement dated October 26, 2020 (the Refund Agreement).

He claims that the illegal arrest, search and seizure of his property was orchestrated by Patiala as a means of intimidating him into settling a civil and commercial dispute surrounding an agreement for supply of beer products. Patiala is using police and Director of the public Prosecution to abuse the criminal justice system to cause his company’s to assign their distributorship rights to Carlsberg’s beer products in Kenya.

The investor says attempts to have Patiala withdraw the case have been futile as they have insisted that unless he assigns his companies rights as the sole distributor of Carlsberg – an international beer brand to Patiala, they would not withdraw the charges or stop the harassment.

According to White documents filed in court, he claim that by an agreement dated December 2, 2019, Danish Brewing Company E. A and King Beverage limited entered into a distribution agreement with Patiala Distributors Limited (Patiala) and over a period of time, Patiala paid Danish Brewering shilling 102,000,570 million for the supply of 30,000 cases of Tuborg Beer.

As a result of space constraints in Patiala’s own warehouses, sometime in December 2019, Patiala took 10,000 cases of beer and asked his companies to keep the balance of 20,000 cases in storage and unfortunately, the COVID pandemic struck within three months and Patiala was slow in selling the alcoholic products. By the time they were sold, the 20,000 cases being held by his company’s were nearing expiry. 

“After several discussions and negotiations with Patiala, the Danish Brewery and  King Beverages agreed to refund the monies paid by Patiala and by a refund agreement dated October 26, 2020, his company’s agreed to refund the monies paid by Patiala,” he said.  

According to him, shockingly, on October 30 last year  2020 while he was in the company of a director of Patiala discussing commercial issues about a shipment, armed officers apprehended him on allegations of possession of illegal firearms.

He was arrested and driven to his residence situated along General Mathenge Road in Nairobi on the pretext that the officers wanted to conduct a search for illegal firearms and the police officers entered his private residence with firearms where they intimidated his infant child.

On entry, the officers curiously went straight to where he keeps his office items and took away his company seals and stamps as well as a dysfunctional laptop and left without touching anything else.

He was subsequently driven to Nairobi Area CID offices for intensive grilling on wild allegations which included being a Russian spy, lack of religious faith, immigration status and tax status.

After what he termed as intense grilling, the officers allegedly disclosed to him he was accused of obtaining money by false pretense.

He said he was intimidated and harassed by the officers to accede to the demands of Patiala and make immediate payments to refund the amounts allegedly obtained under false pretense and officers informed the him that should he fail to make the payments demanded by Patiala, they had instructions to detain him on charges of obtaining money by false pretenses. 

He claims that late in the evening on October 30, last year, he was forced by the officers, under duress and threats of being detained, to write out approximately 102 post-dated cheques all dated November 9, for a sum totaling Sh102 million.

He claims that his friend Daniel Ngugi Thiongo was also forced, by the officers, to hand over a title deed to his property worth approximately Sh 30 million on or about November 9, last year Patiala’s Advocate, Christopher Kabugu via a telephone call, threatened to bank all the cheques unless he paid him what he understood to be a bribe of Sh1 million.

“Despite the 1st Petitioner writing protest letters on 10 November 2020 and 27 November 2020, and on 9 December 2020 through his advocates, neither the 2nd or 4th Respondent replied to the said letters which detailed the egregious violations of the legal process,” he said.

EPRA BOSS DENIES BRIBERY CHARGES.

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BY SAM ALFAN.

Energy and Petroleum Regulatory Authority Director General has been charged with two corruption charges.

Robert Pavel Obwoto Oimeke appeared before Milimani Anti-Corruption Chief Magistrate Douglas Ogoti and denied the charges.

The charges against Mr Oimeke stated that on December 2, last year being EPRA boss, he asked for a bribe of Sh500, 000 bribe from Wycliffe Odhiambo Oyoo.

The message was sent through WhatsApp for purposes of authorising the re-opening of Nyang’inja Filling station in Oyugis in Homa Bay County.

The prosecution told the court that on December 10, Oimeke received a bribe of Sh100,000 from Oyoo so that he could authorize the unsealing and opening of the said petrol station.

The court ordered him to deposit a bond of Sh700, 000 or an alternative cash bail of Sh200,000, to secure his release. He paid the cash bail and was released.

KRA GETS NOD TO COLLECT SH1O5 MILLION FROM BIKE SUPPLIER.

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High Court Judge John Mativo who has issued restraining appointed board members from assuming office.

BY SAM ALFAN.

Motor bikes supplier Mars Logistics Limited will now pay Sh105 million taxes to Kenya Revenue Authority.

The taxes were not paid between 2013 and 2015.

Justice John Mativo said under the VAT Act, 2013, goods in transit were not zero-rated nor was it exempted from VAT as claimed by the company.

“I find no basis to fault the Tribunal’s findings. Accordingly, I find that this appeal fails. The upshot is that I dismiss this appeal with no orders as to costs”, ruled the judge.

While dismissing the case, the judge said that the Tax Appeals Tribunal (TAT) correctly held that to qualify for zero-rated status, the service should have been specifically provided for in the law.

In his 29 page ruling, the judge noted that the Tribunal correctly held that the VAT Act, 2013 came into force on September 2, 2013 thereby removing the exempt status of the sale of motorbikes, hence the appellant was not entitled to claim exempt status on the invoice dated September 11 2016.

The company had appealed a decision of the TAT, dismissing its case and maintained that a levy of VAT on goods on transit amounted to double taxation.

Mars Logistics argued that it was wrong for KRA to impose VAT at 16 per cent on services for goods in transit. The company maintained that goods in transit were previously zero rated under the repealed Act.

But KRA said the company was not entitled to claim exempt status because no documentary evidence was provided to show that the payment was made in April 2013.

Further, the court heard that VAT Act 2013 came into force on September 2, 2013 thereby removing the motor bikes from the exempt status.

KRA also argued that levying tax on transport does not amount to double taxation because the transport cost is considered as an allowable expense by the importer at the destination if any.

The High Court also dismissed the company’s contention that the provisions of the Finance Act, 2014 on exemption from VAT of supply of services in respect of goods in transit, as read together with the VAT Act, 2013 created ambiguity.

He said that when a transaction involves goods being moved from one jurisdiction to another, the exported goods are generally free of VAT in the seller’s jurisdiction (and are freed of any input VAT via successive businesses’ deductions of input tax), whilst the imports are subject to the same VAT as equivalent domestic goods in the purchaser’s jurisdiction.

The VAT on imports is generally collected from the importer at the same time as customs duties, before the goods are released from customs control.

“Allowing deduction of the VAT incurred at importation in the same way as input tax deduction on a domestic supply ensures neutrality and limits distortions in relation to international trade”, He said.

The application of the destination principle in VAT achieves neutrality in international trade. Accordingly, the total tax paid in relation to a supply is determined by the rules applicable in the jurisdiction of consumption and therefore all revenue accrues to the jurisdiction where the supply to the final consumer occurs. In this regard and found no basis to fault the Tribunal’s findings on this issue.

Justice Mativo found that the transport services were consumed in Kenya and not exported services, hence taxable.

In the decision, Justice Mativo noted that the company relied on petty cash vouchers to support its claim. “The law as I understand it is that the onus lies on the appellant (Mars Logistics) to persuade the Commissioner that the expenses were incurred. In my view, the appellant failed to discharge the burden to the satisfaction of the commissioner by relying on petty cash vouchers instead of receipt,” he said and dismissed the appeal.