Robert K. Ayisi v Kenya Revenue Authority & another [2018] eKLR

Key Facts

Tax Type

Issues

• Whether sections 44(1) & (2) and 60(1)-(3) of the Tax Procedures Act, 2015 are unconstitutional for permitting unilateral and arbitrary seizure of taxpayer possessions in contravention of Article 31(b) of the Constitution
• Whether the petitioner's arrest and subsequent treatment by Kenya Revenue Authority violated his constitutional rights under Articles 25(a), 28, 29, and 49(1)(d) of the Constitution
• Whether section 56(1) of the Tax Procedures Act, 2015 is unconstitutional for shifting the burden of proof to taxpayers in contravention of section 107 of the Evidence Act and Article 50(2)(a) of the Constitution
• Whether section 58 of the Tax Procedures Act, 2015 is unconstitutional for allowing unilateral and arbitrary searches of taxpayer properties in violation of Article 31(a) of the Constitution

Tax Years

• 2009
• 2016

Holdings

• The court declared sections 44(1) and (2), 60(1) and (3), and 59(4) of the Tax Procedures Act, 2015 unconstitutional and invalid for non-compliance with the Constitution.
• The petitioner was awarded Kshs 2,000,000.00 in damages for violation of his right to dignity under Article 28 of the Constitution.
• The respondent was ordered to bear the costs of the petition.

Remedies

• The court awarded the costs of the petition to the petitioner, to be borne by the Kenya Revenue Authority (Respondent).
• The Deputy Registrar was directed to serve a copy of the judgment to the office of the Attorney General for necessary action.
• The court declared sections 44(1) and (2), 60(1) to (3), and 59(4) of the Tax Procedures Act, 2015 unconstitutional and invalid, nullifying these provisions for violating constitutional rights related to privacy and fair administrative action.
• The petitioner was awarded Kshs 2,000,000.00 (Kshs Two Million) as compensation for the violation of his constitutional right to dignity under Article 28 of the Constitution.

Tax Issue Category

Monetary Damages

Legal Principles

• The court acknowledged the presumption of constitutionality for statutes but clarified that this presumption does not apply to legislation limiting fundamental rights. The burden of proof lies with the petitioner to demonstrate unconstitutionality in such cases.
• The court declared sections of the Tax Procedures Act unconstitutional for violating privacy rights (Article 31(b)) and failing to meet proportionality requirements under Article 24 of the Constitution. It emphasized that limitations on fundamental rights must be reasonable, justifiable, and comply with constitutional safeguards.
• Section 56(1) of the Tax Procedures Act was criticized for shifting the burden of proof to taxpayers, contradicting the general legal principle (section 107 of the Evidence Act) and Article 50(2)(a) of the Constitution (presumption of innocence).
• The court applied a purposive interpretation of the Constitution, prioritizing its transformative goals (e.g., human dignity, equality) over a literalist approach. This included referencing comparative jurisprudence and the need to adapt to societal values.

Precedent Name

• Otieno Mak'onyango vs. Attorney General & Another
• Koigi Wamwere vs. Attorney General
• Richard Dickson Ogendo & 2 Others vs. Attorney General & 5 Others
• Myers vs. DPP
• Ndegwa vs. Republic
• Coalition for Reform and Democracy (CORD) & 2 Others vs. Republic of Kenya & 10 Others
• Onyango Oloo vs. Attorney General
• Balabel and Another vs. Air India
• Swidler & Berlin vs. United States
• Samura Engineering Limited & 10 Others vs. Kenya Revenue Authority

Cited Statute

• VAT Act, 2013
• Fair Administrative Action Act
• Constitution of Kenya
• Evidence Act
• Tax Procedures Act, 2015
• Kenya Revenue Authority Act (Cap. 469 of the Laws of Kenya)

Judge Name

• J M Mativo
• G V Odunga

Passage Text

• I declare that sections 44(1) and (2), 60(1) and (3) and 59(4) of the Tax Procedures Act, 2015 are unconstitutional and are invalid and are accordingly null and void.
• I find that the Petitioner's right to be treated with dignity pursuant to Article 28 of the Constitution was violated.
• The Respondent has not even attempted to show that the requirements of Article 24 aforesaid were satisfied in the enactment of the said sections.