The High Court in Nairobi has ruled in favour of Kenya Revenue Authority (KRA) in a case filed by Choppies Enterprises Limited a retail supermarkets chain with origins in Botswana, seeking to unfreeze their accounts pending resolution of an ongoing tax dispute.
Justice David Majanja held the ruling in favour of the Authority and dismissed an application filed by Choppies on 22nd April 2020, with costs to KRA.
Choppies had filed an application in Court under Certificate of Urgency seeking orders to unfreeze their accounts pending completion of an ongoing tax dispute.
KRA’s position on the case, which was successfully argued, was that the Authority moved to freeze Choppies bank accounts to secure taxes amounting to Kshs. 173,388,416.00. KRA’s move was informed by the fact that Choppies a supermarket which took over Ukwala Supermarkets Limited was in the process of winding up business in Kenya.
KRA adduced evidence in Court to show that Choppies has already sold its branches, assets and stocks to Tusker Mattresses Supermarkets, Chandarana Supermarkets Limited, Quickmart Supermarkets Limited and Appmatt Limited without informing the Authority in spite of the ongoing tax dispute.
The Court in its ruling, found that KRA was right to freeze Choppies bank accounts to secure the taxes in dispute. The Court further held that KRA had provided undisputed evidence that Choppies had commenced disposing off its assets and winding up business in Kenya. Choppies was faulted for not disclosing their financial position; they did not disclose how much was held in their accounts and what would be realized from sale of their assets.
In conclusion, the Court found that Choppies should provide security for taxes payable to KRA in view of the fact that they are closing shop in the country.
Further, the Court gave Choppies and KRA fourteen (14) days to explore an amicable settlement of the tax dispute.