BY SAM ALFAN.
African Spirits Limited has accused Director of Public Prosecution of filing multiple cases to frustrate the company associated with billionaire Humphrey Kariuki.
The Company told Justice Luka Kimaru that Kenya Revenue Authority slapped the distiller with a draconian amounts of money claiming that they didn’t file the tax as required by the law.
It argued that both DPP and KRA were on a fishing expedition and nothing to show that the company has not filed its tax.
Through lawyer Cecil Miller, Africa Spirits Limited (ASL) submitted that there are multiple cases involving the same parties, on the same subject matter, filed by the DPP seeking preservation orders against its bank accounts which amounts to forum shopping and an abuse of the court process.
The court heard that the order freezing its accounts was mischievous and was irregularly obtained in a Kiambu court and served on banks but not on the account owners. The order applied for in court was to have access and search the bank accounts and not to freeze them, the company said.
The DPP went ahead to serve the freeze order on banks bringing lives of thousands of employees to a standstill (who work for companies that are not parties to the cases in court).
Further, the company the DPP has roped in several companies that are not accused persons in any of the cases before court.
The court heard that DPP should not use any undue advantage against other parties using orders obtained ex parte. It was also pointed out that matters must be subjected to fair and public hearing.
The company also submitted that they were condemned unheard and that condemnation was assisted by an irregular and non-existent order “What happens if one of the many cases is concluded and there are acquittals while funds have already been seized?” the company posed.
Miller pointed out that the Criminal matters before the courts were all reported on the same day January 31, 2019 and all the Charge sheets bear the same Occurrence Book (OB) No. One of the matters was however filed however on 1 February 1, 2019 in Thika while others were filed on 9 August 9, 2019 in Nairobi despite having the same OB Number.
The multiple cases are an abuse of the court process because there needs to be finality in a matter before court.
It was pointed out to the court that for the first time, shareholders of a company have been charged in court over tax issues of the company. The file in Kiambu needs to be called for so that the judge can see the mischief in the extraction of the order that was served on banks.
During the period that ASL is being accused of failing to pay taxes, they were issued with a Tax Compliance Certificate. The same applies to WOW Beverages Limited.
No notice was issued to Africa Spirits Limited (ASL) to appear before the Commissioner of Taxes as required by the Tax Procedure Act of 2015 and the DPP can’t demonstrate that this was done.
The Act sets out procedures for investigation, compliance and audit of tax issues. KRA never subjected ASL to the Tax Investigation handbook and can’t show any violation of the procedures.
The Affidavit of KRA does not show specific offenses under the Excise Duty Act of 2015 and VAT Procedures.
The DPP says in seeking the preservation orders that investigations are underway so why have they come to court seeking a multiplicity of orders yet they haven’t satisfied themselves that the accused persons owe billions as alleged.
Under the Tax Procedures Act of 2015 suing is the last option. KRA should have explored alternative dispute resolution mechanisms. Instead, the DPP went straight to court.
Wow Beverages Limited through lawyer Mack Ouma pointed out that WOW and ASL are two distinct separate entities for purposes of tax and WOW has been issued with a Tax Compliance Certificate. It’s goods are only released after all taxes are prepaid.
He added that the role of the police in tax matters is limited. The Police only get involved once there is a warrant obtained under the Tax Procedures Act and Police can’t purport to probe tax matters.
