Kenya Revenue Authority has won two cases at the High Court in Nairobi against the Kenya Postel Directories Ltd. In one of the cases, Kenya Postel Directories Ltd sought an order from the High Court to overturn the decision of the Tax Appeal Tribunal affirming its VAT tax liability of KShs. 218,937,924/= and that it could not utilise the VAT refund claims to offset against its outstanding VAT liabilities.
Justice H.K. Chemitei on 31st October 2019 ruled in favour of KRA that VAT refund claims were not payable to Kenya Postel Directories Ltd on the basis of its non- compliance with the Public Notice No. 37 of 2003.
KRA had given guidelines through a Public Notice No. 37 of 2003 to all taxpayers for preparation of accounts on a cash basis for a period of six months. The allowable period lapsed on 17th February 2004. Kenya Postel Directories Ltd however continued to account for VAT on cash basis beyond the six months allowable period. Justice
H.K. Chemitei held that having looked at the Public Notice, it was not ambiguous or difficult to understand, that Kenya Postel Directories Ltd was capable of complying but it failed to do so and that the Notice did not contravene any law.
The court further held that Kenya Postel Directories Ltd slept on its rights and ‘was simply happy to remit as granted for the six months window’ without seeking a review. Justice H. K Chemitei on 31st October 2019 dismissed the case and upheld the earlier decision of the Tax Appeals Tribunal.
In the second case, KRA won against Kenya Postel Directories Ltd for an amount of Kshs 621,682,582. Kenya Postel Directories Ltd had lost the case at the Tax Appeals Tribunal and appealed to the High Court.
The High Court in its judgment delivered on 31st October 2019 held that Kenya Postel Directories Ltd failed to prove its case in accordance to the guidelines issued by KRA in the Public Notice No 37 of 2003 that the bad and doubtful debts were uncollectable.