The Tax Appeals Tribunal has allowed KRA to demand a Sh60 million tax from Muhugu Limited after dismissing an appeal filed by the company.
Muhugu Limited had made an application on January 16th, 2020 seeking to reinstate an appeal that it had earlier withdrawn from the Tribunal.
The tribunal ruled that once withdrawn the application cannot be reinstated.
The ruling paves way for KRA to enforce the collection of taxes that stood at Kshs. 59,640,304 at the time of filing of the Application for reinstatement of the Appeal on the 15th March 2016.
By the time the application for reinstatement was made, KRA had already placed a caveat restriction over the property of Muhugu Limited restricting the transfer of the property.
The tax dispute started after KRA issued Agency Notices to Muhugu Limited’s bankers, Kenya Commercial Bank Limited, to recover the taxes owing prompting Muhugu Limited to seek to reinstate an Appeal filed at the Local Committee in 2014 against KRA which was however withdrawn in 2016.
The Tribunal ruled that “citing Section 27 (1) of the Tax Appeal Tribunal, 2013 which stipulates that an appellant may, by notice in writing, withdraw the appeal, the applicant exercised its rights.”
However, on whether a matter that had been withdrawn be reinstated, the Tribunal held that the appeal cannot be reinstated as the withdrawal was complete and effective. The Tribunal relied on the precedence of High court rulings.