SAMURA ENGINEERING LIMITED & 10 others v KENYA REVENUE AUTHORITY [2012] eKLR

Key Facts

Tax Type

Issues

• The second issue for determination was whether the court should award costs to the petitioners as a consequence of the findings on constitutional rights violations. Counsel emphasized that costs were a direct outcome of the two primary issues for determination.
• The court was required to determine if the Kenya Revenue Authority's warrantless raid and seizure of the petitioners' business and personal documents violated constitutional rights enshrined in Articles 10 (national values), 19 (supremacy of the Constitution), 21 (state organs' obligations), 29 (freedom and security of the person), 31 (right to privacy), 40 (property rights), 47 (fair administrative action), and 73 (transparency and accountability). The second issue concerned the consequences of these violations, including compensation and injunctive relief.

Tax Years

• 2003
• 2002
• 2005
• 2006
• 2001
• 2000
• 2004

Holdings

• The court rejected the petitioners' request to amend the petition for additional damages evidence, stating the facts were known and the amendment was prejudicial to the respondent. The 10th petitioner's claim was dismissed due to insufficient pleading of rights violations.
• The court found no breach of the petitioners' right to property under Article 40 of the Constitution as the claim was not sufficiently pleaded or demonstrated in the evidence. The seizure of business documents was not analyzed under Article 40 due to lack of specific allegations.
• The court ordered the Kenya Revenue Authority to release all seized documents and equipment to the petitioners within 14 days, citing the violation of constitutional rights. Specific damages were awarded to the 1st-8th petitioners (Kshs. 800,000 jointly), the 9th petitioner (Kshs. 1,200,000), and the 11th petitioner (Kshs. 600,000).
• The court declared that the Kenya Revenue Authority's warrantless search and seizure of the petitioners' documents and property on 2nd February 2011 violated their right to privacy under Article 31(a) and (b) of the Constitution. The respondent failed to establish reasonable grounds for the search, and the seizure of personal documents like wills, medical records, and school reports was deemed unconstitutional. Damages were awarded to the petitioners for this breach.

Remedies

• The court declared that the 1st to 8th petitioners' rights to privacy (Article 31(a) and (b)) were violated by the respondent's warrantless search and seizure of their property on 2nd February 2011. Similarly, the 9th and 11th petitioners' privacy rights under Article 31 were also declared violated due to the seizure of personal documents like wills, medical records, and school reports.
• The court awarded joint damages of Kshs. 800,000.00 to the 1st-8th petitioners for the breach of their privacy rights. The 9th petitioner received Kshs. 1,200,000.00, and the 11th petitioner received Kshs. 600,000.00. These awards were based on the violation of their constitutional rights, with specific emphasis on the seizure of personal and business documents unrelated to tax investigations.
• The court ruled that the Kenya Revenue Authority must bear the costs of the petition. Additionally, the 10th petitioner's case was dismissed with no order regarding costs.
• The court directed the Kenya Revenue Authority to release all documents and equipment seized from the petitioners' premises within fourteen (14) days of the judgment. Failure to comply would allow the petitioners to apply for further orders, ensuring the return of their property.
• The 10th petitioner's case was dismissed by the court as the pleadings did not clearly establish which rights were violated or how. The dismissal was made without any order for costs.

Tax Issue Category

Monetary Damages

Legal Principles

Precedent Name

• Mistry v Interim National Medical and Dental Council & Others
• Dry Associates Ltd v Capital Markets Authority & Another
• Kerosi Ondieki v The Public Service Commission & Others
• Anarita K Njeru v Republic
• Harrikisson v Attorney General of Trinidad & Tobago
• Alphonse Mwangemi Munga & 10 Others v African Safari Club
• Meme v R
• Rashid Odhiambo Aloggoh & 245 Others v Haco Industries Ltd
• Intoil Limited & Another v PS Ministry of Energy & Others

Cited Statute

• Constitution of Kenya
• Income Tax Act (Cap 470)
• Value Added Tax Act (Cap 476)
• Law Reform Act (Cap 26)
• Civil Procedure Rules

Judge Name

Passage Text

• 78. The respondent has not placed before the court material, which was available to it on 2nd February 2012, upon which the court may make its own assessment and conclusions to determine whether the action it took was reasonable. In the circumstances, I must therefore conclude that there was no reasonable basis upon which a warrantless search and seizure was effected. It therefore follows that the search and seizure contravened the provisions of Article 31 of the Constitution.
• 99. Though the 1st to the 8th petitioners are separate companies, they have common directorship... I award the 1st to 8th petitioners jointly a sum of Kshs. 800,000.00 for the breach of Article 31(a) and (b) of the Constitution.
• 100. As regards the 9th Petitioner... the taking of his personal documents including his will, medical records and those of his children... I award him Kshs. 1,200,000.00 as damages for breach of Article 31.