Automated Summary
Key Facts
The case involves a dispute between Abdalla Brek Said and others (plaintiffs) and Kenya Revenue Authority (defendant) over tax assessments. The plaintiffs seek a declaration that a Kshs. 1,159,928,615 tax demand is illegal and an injunction to prevent its enforcement. The court ruled that the case is not res judicata, distinguishing it from a prior judicial review application by noting new constitutional arguments and different relief sought. A conservatory order was issued, and parties were granted 90 days for out-of-court settlement.
Tax Type
Personal Income Tax
Issues
- Whether the court can grant the orders sought, including an injunction to restrain tax recovery and a declaration that the tax demand is illegal, under its original jurisdiction.
- Whether the application dated 8th June 2016 is res judicata (barred by a previous judgment) given the prior judicial review application No. 57 of 2010.
Tax Years
- 2010
- 2012
- 2009
- 2011
- 2008
Holdings
- Parties were granted 90 days to negotiate an out-of-court settlement, recognizing the high tax demand and the need for reconciliation of disputes.
- A conservatory order was issued restraining the Kenya Revenue Authority from recovering Kshs. 1,159,928,615/= in taxes pending the hearing of the suit inter partes.
- Costs in the cause were awarded to the applicants.
- The court found that the present suit is not res judicata, as the pleadings introduce new issues and dimensions, including Constitutional provisions and injunctive relief, which were not addressed in the prior judicial review application.
Remedies
- Costs in the cause were awarded to the applicants.
- Parties granted ninety (90) days to negotiate an out-of-court settlement to resolve the dispute.
- A conservatory order was issued to restrain the defendant from proceeding with the recovery of tax in the sum of Kshs.1,159,928,615/= against the plaintiffs, pending the hearing of the suit interpartes.
Tax Issue Category
Other
Legal Principles
- The court analyzed whether the current case was res judicata based on prior judicial review proceedings. It concluded that the present suit introduced new dimensions and triable issues not addressed in the previous ruling, distinguishing it from the earlier case despite similar parties and subject matter.
- The court granted a conservatory order restraining tax recovery pending resolution, emphasizing the applicants' right to a hearing and the need to prevent business closure. It balanced the parties' interests under the Constitution's original jurisdiction provisions.
Disputed Tax Amount
1159928615.00
Precedent Name
- Omondi vs National Bank of Kenya Ltd. and Others
- E.T. vs Attorney General & Another
- Kenya Commercial Bank Limited vs Muiri Coffee Estate Limited & Another
- Madison Insurance Company Limited vs The Commissioner of Domestic Taxes & Kenya Revenue Authority
- Nyongesa & 4 Others vs Egerton University College
- Kapa Oil Refineries Limited vs Kenya Revenue Authority & 2 Others
- Equity Bank Limited vs West Link MBO Limited
- Kenafric Industries vs Commissioner of Domestic Taxes & 4 Others
- Commissioner of Domestic Taxes Large Tax Payers Office Exparte Barclays Bank of Kenya Ltd.
Cited Statute
- Tax Procedures Act
- Income Tax Act
- Constitution of Kenya
- Civil Procedure Act
Passage Text
- It is therefore my finding that the present suit is not res judicata.
- i. That a conservatory order do issue...; ii. That parties are granted ninety (90) days to engage in negotiations...; and iii. Costs in the cause.
Interest Amount
1340071385.00