KRA has last laugh in witness, papers disappearance suit

The Kenya Revenue Authority headquarters. photo | SALATON NJAU

What you need to know:

  • Court of Appeal faulted a High Court judgement awarding Hasmukh Shamji Halai and Mr Bernard Masaka Shinali Sh3 million each.
  • The two had sued the KRA's Commissioner of Customs for malicious prosecution.
  • This is after they were acquitted of charges of making false declaration of customs forms

It was a sweet victory for the Kenya Revenue Authority after the Court of Appeal overturned compensation awarded to two senior managers of a company, which had successfully sued the agency for malicious prosecution.

In the decision, Justices Philip Waki, Roselyn Nambuye and William Ouko faulted a judgement of the High Court awarding Hasmukh Shamji Halai and Mr Bernard Masaka Shinali Sh3 million each for the accusation.

The two had sued the Commissioner of Customs after they were acquitted of charges of making false declaration of customs forms, among others with a view to avoiding payment of customs duty.

They argued that they endured pain and suffering during the five years in which they faced the trial.

But the judges noted that there was no dispute that the commissioner has the powers to seize goods that duty was due but was not paid.

False declaration

They said after receiving a formal complaint from a company known as Rayshian Apparels, the commissioner carried out due diligence and found that KPA officers had released ‘electrical goods’ on the basis of a false declaration claiming that the goods were ‘cotton fabrics’.

In April 1996 customs office in Nairobi received a complaint from the managing director of Rayshian Apparels Ltd, a manufacturer of garments, that an importer of electronics was using its company’s name to import goods without paying the necessary taxes or duty.

Investigations conducted found that in March 1996, three containers of goods had been imported from Singapore and cleared through the Inland Container Depot (ICD), Nairobi in the name of Rayshian.

The goods were described as ‘100 per cent cotton fabrics.’ 

Police and customs officers confirmed that the goods had been cleared from the ICD by Shinali and on following up the containers, found that they had been offloaded into the stores of Kenwood Trading Company and Jaribu Credit Traders where Halai worked as the stores manager while Mr Shinali was inputs manager in-charge of documentation for clearance of imported goods.

The police later discovered that the goods were not cotton fabrics as described, but electronic cargo including radio cassettes, televisions and air conditioners.

After the two and four other people-including KRA officials were charged in court, several prosecution witnesses disappeared including Rayshian which wound up in Kenya and proprietors migrated to the USA. 

Three drivers who had transported the goods to the warehouse of Kenwood and Jaribu and later led the police to the warehouse, left the country for Uganda, Ethiopia and Sudan respectively. 

Documents disappeared

Some documents intended for the prosecution also disappeared.

The suspects were eventually acquitted and they sued the government.

In their judgement, the three judges said that it was evident that the prosecution had been driven into a helpless corner. 

“It would be a sad day, and a dangerous precedent in our criminal justice system, if we celebrated the acquittal of an accused due to the absence of witnesses and documents, regardless of the reasons for their absence, and equating the acquittal to proof of innocence,” they said.

The judges said there was no evidence that the commissioner had improper and wrongful motive or that he intended to use the legal process for a purpose other than the legal one of ascertaining the truth about the importation of the goods found in possession of the two managers.