Court rules KRA has legal power to search any premises and seize goods, documents

The Court of Appeal has ruled that the Kenya Revenue Authority (KRA) has legal power to search any premises and seize goods, documents or storage device as per the provisions of the Tax Procedures Act.

The powers to search any premises and seize goods, documents or storage device are donated to KRA by Section 44 and 60 of the Tax Procedures Act.

The High Court in Nairobi, however, presiding over the case of Dr. Robert Ayisi vs. KRA on May 16, 2018 ruled that the two Sections of the law serve to limit the rights of a person guaranteed by Article 31 (b) of the Constitution.

The court went on to hold that Section 44 and 60 of the Act did not pass the test set out under Article 24 of the Constitution which requires that any law limiting the rights guaranteed by the Constitution must be reasonable and justifiable in an open and democratic society.

The taxman, dissatisfied with the ruling, then proceeded to the Court of Appeal seeking to stay the judgment of the High Court.

Court of Appeal Judges Martha Koome, Fatuma Sichale and Jamila Mohamed found merit in the arguments advanced by KRA that – if curtailed from enforcing the provisions of Section 44 and 60 of the Tax Procedures Act – the orders issued by the High Court had far reaching implications and would cripple the authority in the execution of its mandate.

The Court of Appeal also appreciated that colossal sums of money in taxes were likely to be lost and, in the event that the appeal succeeds, the loss will be irreversible.

The court held that this was a unique case that has a public interest, bearing in mind the mandate of KRA as a tax collection agency on behalf of the people of Kenya.

The judgment and orders of the High Court have since been stayed save for the order barring KRA from arresting former Nairobi County Secretary Dr. Robert Ayisi which order remains in force.