KRA is planning to appeal the High Court’s decision to release a consignment of sugar to its importer, pending the determination of a tax case.
On Monday, judge Erick Ogola ordered the taxman to release 40,000 metric tonnes of sugar to Darasa Investment Limited for safe storage.
The authority’s efforts to have the judge stay his orders, for seven days pending the appeal, were thwarted when he dismissed their application.
Judge Ogola, who stamped his previous orders dated December 27, ordered that the sugar be offloaded to JB Maina Warehouse for safekeeping.
Kenya Revenue Authority is fighting to recover Sh2.5 billion tax from Darasa for sugar that was imported during the period of tax exemption. KRA insists the company did not meet conditions for exemption.
Ogola warned KRA against defying orders by two judges to allow the docking of MV Iron Lady and offloading of the cargo to that warehouse.
He said the authority risks paying Sh100 million as the cost of keeping the ship offshore since its arrival in October last year. He added KRA will also pay any charges that accrued as a result of its officials’ non-compliance.
“If KRA continues to subdue my orders, I will order they pay all costs since I issued my first orders on December 18.”
The judge noted the taxman would not suffer any prejudice compared to Darasa.
Ogola said it would be unfair for a businessman to waste all his business profits on paying for storage of goods which are still subject of determination.
He further noted that it was clear that JP Maina Warehouse had more space than the customs warehouse at the Port of Mombasa.
Darasa officials say they have been forced to pay Sh1.5 million everyday as the cost of keeping the ship which contains their 800,000 bags of sugar.
Through lawyers Dennis Mosota and Ian Tebino, the company however said it was ready to pay for extra security personnel at the Maina warehouse.
The case will be mentioned on January 24 for confirmation of compliance.