Cimbria East Africa Limited v Commissioner of Investigation and Enforcement & Commissioner of Customs Services [2016] KEHC 1140 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW NO.  167   OF 2016

IN THE MATER OF AN APPLICATION BY CIMBRIA EAST AFRICA LIMITED, THE APPLICANT   FOR LEAVE TO APPLY FOR ORDERS OF CERTIORARI AND PROHIBITION

AND

IN THE MATTER OF A DEMAND DATED 31ST MARCH 2016 BY THE COMMISSIONER   INVESTIGATION AND ENFORCEMENT, THE KENYA REVENUE AUTHORITY.

CIMBRIA EAST AFRICA LIMITED …………………................APPLICANT

VERSUS

THE COMMISSIONER OF INVESTIGATION

AND ENFORCEMENT………………………..…………….1ST RESPONDENT

THE COMMISSIONER OF CUSTOMS   SERVICES…...2ND RESPONDENT

JUDGMENT

1. By a notice  of motion dated  22nd  April  2016, pursuant  to leave  to apply   issued on  12th April 2016,the exparte  applicant  herein Cimbria East Africa Limited  seeks the following  Judicial Review  Orders:

1) An order of certiorari to remove  into  the High Court  for purposes of it being  quashed  the demand  of the Commissioner  of Investigations and Enforcement  dated  31st March 2016 claiming for  payment  of customs   duty from the applicant in  the amount  of Kshs   99,934,908  to the  Commissioner of  Customs Services.

2) An order of prohibition to  prohibit the  Commissioner  of Investigations and Enforcement  from demanding  customs  duty from the applicant in terms  of the demand dated  31st March  2016.

3) An order that the respondents do pay the costs of the proceedings.

2. The  exparte  applicant’s  case is  premised  on the statement  filed on  12th April  2012   and the  verifying   affidavit  sworn by Joseph  Mwangi Mburu, the applicant’s   Finance  Manager  sworn on 11th April  2016.

3. According to the deponent, the applicant is a company dealing substantially in selling post- harvest equipment for the cleaning, storage, milling and grading of grain.  It sells the equipment to both private and Government entities which include the National Cereals and Produce Board.

4. That  on 31st  March  2016, the  1st respondent who is the Commissioner  of Investigations  and Enforcement  made  a demand for  Customs Duty  in the sum of Kshs  99,934,908  without giving any  explanation  for  the said demand.

5. That  although the applicant requested for  reasons  for the basis  of the  demand for  Customs  Duty, none  were  forthcoming  from the respondents herein, and that the 1st  respondent  alleged that  the said customs   duty is due  to the 2nd respondent, the commissioner  of Customs Services  between  2010 and  2013.

6. That   after conducting a tax  audit   at the exparte applicant’s  premises  the 1st  respondent herein  issued  a letter of  findings dated  17th February  2015   claiming  for Corporation Tax, Withholding Tax  and Value Added Tax  allegedly   owing, but that no  reference  was made  to Customs Duty  Tax.

7. That later,  on  8th May  2015,  the 1st respondent issued a second  demand  letter, demanding   for Corporation Tax, Withholding  Tax, Value   Added Tax and Customs  Duty  of  shs   86,619,537.

8. That  on  28th May 2015  through  its tax   advisors, the applicant  responded  to the  demand  by the 1st respondent and   indicating  that the applicant was  unaware  of any previous  claim raised  on customs  duty, while asking for the basis  upon which customs  duty  was  being  demanded.

9. That on  11th June   2015  the applicant’s  tax  advisors  wrote  back to the 1st  respondent  explaining  that they  had not   raised  objections to the  demand for Customs  Duty but  that they  had sought  an  explanation and time  to study  the documentation  and confer  with  the applicant  before  reverting.

10. That on 22nd October 2015 the 1st respondent wrote another letter attaching some documents and demanding for payment of Customs Duty.

11. That  the applicant  confirmed  from  its records  that Customs  Duty claimed  was paid  and that the meetings between the 1st respondent and the applicant confirmed  that position.

12. That even thought, the vast majority of the claimed  outstanding  Customs  Duty   as paid  was  evidenced  by the payment  receipts   submitted to the  1st respondent  as shown by bank  slips.

13. That after holding  a meeting  with the  1st respondent, the applicant  wrote to  the  1st  respondent  on 23rd November  2015  setting  out a  raft  of issues  challenging   the documentation  supplied  by the 1st respondent namely:

a)That several entries cited by the 1st respondent showed that the  importers  of the goods sought to be  taxed as third parties  and not the   applicant herein; that some of the entries did not bear Kenya Revenue  Stamp.

b)That in the description of some of the goods cited by the 1st respondent, the goods were motor vehicles which were never imported by the applicant. The applicant specifically stated that  it imported  only plant and machinery  and spare  parts  for the same  and  that the  applicable  taxes  had been  paid.

c)That some of the clearing agents  referred to in the documents  relied  on by the 1st respondent, namely, Agility Logistics  Limited, Freight  Care  Logistics  and  Logistics Three Sixty  Five Limited, were never  contracted by the applicant as alleged or at all; hence; the  1st respondent’s information  on the Customs  Duty claimed   was false.

14. That the respondent  totally refused  to address the above  issues  raised  by the applicant and only persisted  in demanding for the customs  duty vide  its letter dated  31st  March  2016  without  laying  any basis  for the demand  and without addressing  the anomalies. That therefore the applicant   was  compelled  to seek the court’s intervention because the demand for  payment  of  customs duty  is unlawful, unreasonable, unjust  and  without  basis.

15. That the  1st respondent  in demanding  for customs duty without  providing  any reasons, they are acting unfairly, unprocedural, unreasonably and  in gross  violation of the  applicant’s  constitutional  right to fair administrative  action that is lawful, fair, reasonable  and procedural.

16. That as the sums  demanded  are considerably  substantial, the  applicant  will suffer  substantial financial loss  and damage  to its  business  including  shutting down thereby impacting  negatively on third party businesses including  farmers  who  benefit  greatly from the applicant’s  services.

17. That the applicant  being  a major  supplier of critical equipment to the  National Cereals and Produce Board, the activities of the applicant  have a direct impact on food security within the country and that  if the orders   herein sought  are not granted  and the applicant’s  business is grounded, this  will have  drastic  ramification across the  entire  country.

18. The applicant further avers that it will suffer substantial loss if the demand dated 31st March 2016 is not quashed.

19.  Both respondents filed  notice of appointment of advocates   and on 26th  July  2016  they filed  a notice of  preliminary objection dated  25th July  2016  contending that:

a)The application offends the mandatory  provisions  of Sections 229  and  230  of the  East African  Community Customs  Management Act  and the Provisions of  Section 2  and  13  of the Tax   Appeals  Tribunal  Act,  2013 hence  the same  should be struck  out  with costs  to the respondents.

20. The exparte  applicant   filed skeletal  submissions  on 22nd April  2016  and a bundle  of authorities  dated  22nd April  2016.  The application   was canvassed orally on 5th October 2016 with Miss Malik Advocate appearing for and submitting on behalf   of the applicant. There was no appearance by the respondents.

21. In the exparte applicant’s  written submissions dated 22nd April  2016  which  were highlighted by Miss  Malik, it was submitted that the respondent’s demand  for Customs Duty payment by the applicant  in the  letter dated  31st  March  2016  was not  supported by  any reasons or explanation for the demand  since there  had been no previous demand for  Customs  Duty.

22. That when  the applicant through  its  tax  advisor  sought for  an explanation of the basis of the demand,  the respondent  simply submitted  a  list of  customs items  which has been paid for and that  despite  the applicant   pointing out that some entries  were of goods  which it never  imported  such as  motor vehicles; and that  some clearing agents   listed on the entries  were not appointed by the applicant, the respondents refused  to give any  explanation for the demanded Customs Duty Tax and simply  asked for  payment. Counsel  relied on the decision  inPZ Cussons EA Ltd vs. Kenya Revenue Authority  Petitioner  No. 309 of 2012  where Majanja  J held  that reasons  for demanding   taxes must  be given, explaining  how the sums claimed   were arrived at.  It was submitted that it  was unreasonable to demand  for  duty  which  was not due  and  fail to give reasons  for the  demand, which is in contravention of  Article   47 (2)  of the Constitution.

23. Further reliance was placed on HC Miscellaneous  Application No. 1768/2004 Republic Vs Kenya Revenue Authority exparte  Fintel Limited  where  the court held that  the respondent   was under a  duty to give reasons  and that  giving reasons is “ one of the  fundamentals  of  administration.” Further, that the duty to give reasons is now calcified in Article 47(2) of the Constitution.

24. Further reliance was also placed on Republic V Commissioner  of Domestic Taxes Exparte Barclays Bank of Kenya Limited HC Miscellaneous  Application  46/2013  contained  in the applicant’s  further  bundle  of authorities  filed  on  4th  October  2016  on the principles  applicable  in applications for Judicial Review  orders.

25. On the  unprosecuted  preliminary  objection  filed by  the respondent’s counsel  on  26th July  2016, the applicant’s  counsel  submitted that the facts  placed before  the court   were uncontroverted . Further, that  Sections  229 and  230  of the East African  Community  Customs  Management  Act would  only come  into play  if reasons  had been given to  enable  the applicant go for  an appeal   and  or review  before the Tax Revenue Tribunal.

26. Counsel also relied on Article  47(2)  of the Constitution  on Fair Administrative   Action and Republic Vs  Commissioner  of Domestic Taxes Exparte  Barclays  Bank  of Kenya  Limited, HC  Miscellaneous  Application  46/2013 where the court held that availability  of other  remedies  is not  a bar to  granting  Judicial Review  reliefs.

27. In addition, counsel for the applicant submitted that the preliminary objection is a technical objection since no reasons   for the demand for the taxes were given   to the applicant.  She urged the court to grant the Judicial Review orders sought in the application.

Determination

28. Judicial Review can be characterized as the rule of law in action.  InRegina (Alcobury) Developments Ltd and Others) v Secretary of State Environment, Transport and the Regions [2003] 2.  AC 295 paragraph 75, Lord Hoffman stated:

“ There is however another  relevant  principle  which must   exist  in a democratic  society  that is the  rule of law…..The  principles  of Judicial Review   give effect to the Rule of  Law.  They ensure that administrative decisions will be taken rationally, in accordance with a fair procedure and within the powers conferred by parliament…….”

“……..the rule  of law  enforces  minimum  standards   of fairness, both substantive   and  procedural” per  Lord  Steyn  in Regina  Vs Secretary of State  for the Home Department  Exparte  Pierson [1998] A.C. 539, 591F.

Lord  Bingham  in the same  decision of Regina  V Secretary  of State  for the  Home Department  Exparte  Pierson (supra)  stated  that :

Ministers  and Public  officers at  all levels  must  exercise  the powers conferred  on them in  good  faith, fairly, for the purpose for which the powers were conferred, without  exceeding  the limits  of such  powers  and not unreasonably.”

29. In Mombasa Municipal Council V Republic & Umoja  Consultants  Ltd CA   185/2001,  the Court of Appeal held:

“Judicial review is concerned   with the decision   making process, not with the  merits  of the decision  itself: The  court would   concern  itself with such  issues as to  whether  the decision  makers  had the jurisdiction, whether  persons affected  by the decision   were heard  before it  was   made and  whether in making the  decision the decision maker took  into account  relevant   matters or did take into account  irrelevant  matter……The court should not  act as  an appellate  court over the decider  which would involve going into  the merits  of the decision itself  such as  whether   there  was  or there was not  sufficient    evidence to support  the decision.”

30. Further, in Republic  vs. Kenya  Revenue  Authority  exparte  Yaya  Towers Limited  [2008]  e KLR  the court held:

“The remedy of Judicial Review is concerned   with reviewing not the merits of the decision of which the application for Judicial Review is made, but the decision making process itself.  It is important  to  remember  in every case  that the purpose  of  the remedy  of Judicial  Review  is to ensure  that the  individual  is given  fair treatment  by the authority  to which he   has  been subjected  and that it is no part of  that purpose  to substitute   the opinion of the judiciary or of  the individual  judges  for that  of the authority  consulted by law  to decide  the matter   in question.  Unless  that restriction on  the power of the court  is observed, the  court will, under  the guise  of preventing  abuse of  power, be  itself , guilty of usurpation of power.  See Halsbury’s Laws of England 4th Edition VOL 1(1) paragraph 60.

As was  further  held in Chief  Constable   of North  Wales  Police  V Evans  [1982] 1 WLR  115“ Judicial Review  is to ensure that the  individual  receives  fair treatment, and not  to ensure   that the authority, after  according  fair  treatment  reaches  on  a matter  which  it is  authorized  by law   to decide for itself   a conclusion  which is correct  in the   eyes of the court.”

31. Where there is an alternative  remedy, except  in exceptional  circumstances, the  Judicial Review  jurisdiction  would not  be exercised  and the court must  not exercise  it where  there  exist   alternative  remedy, or the  Judicial Review  is a last resort where  there is an alternative  remedy. (SeeRegina V Dud sheath exparte Meredith [1950] 2 ALL E.R. 741, at 743, Lord Goddard C.J)

32. In this case, the exparte  applicant  seeks  for Judicial  Review orders of certiorari  to bring   into  this court  for purposes  of quashing  the decision of the  1st respondent  to demand  payment  of Customs  Duty in the sum of shs 99,934,908 payable to the 2nd respondent.  That decision was   communicated   to the exparte applicant vide letter dated 31st March 2016.

33. The exparte  applicant further  seeks for  Judicial Review  order of  prohibition to prohibit  the 1st respondent  from  demanding  Customs Duty from the  exparte  applicant  in terms  of the demand   letter dated  31st  March  2016.

34. According  to the  exparte  applicant,  upon receiving  the demand for  Customs Duty, it  wrote to the  1st respondent  asking for   an explanation  for the demand  since there  had been  no such  demand  before and more  so, that no such amount  of money  could be  due  and owing  by it  to the respondents  since  the applicant had  paid  all the Customs  Duty  due as  shown  by banking   slips.

35. Further, that some of the goods  for  which  Customs  Duty   was  demanded  were not imported by the exparte  applicant; and that some of the clearing  agents who  cleared  the  goods  for  which duty was being demanded  are not the exparte   applicant’s  agents.

36. In the exparte applicant’s view, the demand for Customs Duty by the respondents is therefore illegal, irrational, and unreasonable and is made in bad faith.

37. In determining whether or not judicial review orders sought herein are available to the exparte applicant, it is important to appreciate the scope of judicial review remedies. The scope of Judicial  Review remedies  of certiorari, mandamus and  prohibition as  was well captured  by the Court of Appeal  in Kenya National Examinations Council Vs  Republic Exparte Geoffrey  Gathenji  Njoroge  & Others CA  266/1996 where the Court  of Appeal  held inter alia:

“Prohibition looks to the future so that if a tribunal were to announce in advance that it would consider itself not bound by the rules of natural justice the High Court would be obliged to prohibit it from acting contrary to the rules of natural justice. However, where a decision has been made, whether in excess or lack of jurisdiction or whether in violation of the rules of natural justice, an order of prohibition would not be efficacious against the decision so made. Prohibition cannot quash a decision which has already been made; it can only prevent the making of a contemplated decision…Prohibition is an order from the High Court directed to an inferior tribunal or body which forbids that tribunal or body to continue proceedings therein in excess of its jurisdiction or in contravention of the laws of the land. It lies, not only for excess of jurisdiction or absence of it but also for a departure from the rules of natural justice. It does not, however, lie to correct the course, practice or procedure of an inferior tribunal, or a wrong decision on the merits of the proceedings…The order of mandamus is of a most extensive remedial nature, and is, in form, a command issuing from the High Court of Justice, directed to any person, corporation or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. Its purpose is to remedy the defects of justice and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right or no specific legal remedy for enforcing that right; and it may issue in cases where, although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual. The order must command no more than the party against whom the application is legally bound to perform. Where a general duty is imposed, a mandamus cannot require it to be done at once. Where a statute, which imposes a duty, leaves discretion as to the mode of performing the duty in the hands of the party on whom the obligation is laid, a mandamus cannot command the duty in question to be carried out in a specific way… These principles mean that an order of mandamus compels the performance of a public duty which is imposed on a person or body of persons by a statute and where that person or body of persons has failed to perform the duty to the detriment of a party who has a legal right to expect the duty to be performed. An order of mandamus compels the performance of a duty imposed by statute where the person or body on whom the duty is imposed fails or refuses to perform the same but if the complaint is that the duty has been wrongfully performed i.e. that the duty has not been performed according to the law, then mandamus is wrong remedy to apply for because, like an order of prohibition, an order of mandamus cannot quash what has already been done…Only an order of certiorari can quash a decision already made and an order of certiorari will issue if the decision is without jurisdiction or in excess of jurisdiction, or where the rules of natural justice are not complied with or for such like reasons. In the present appeal the respondents did not apply for an order of certiorari and that is all the court wants to say on that aspect of the matter.”

38. Therefore, with regard   to the prayer for  certiorari,  it will   issue  if the  decision  is without  jurisdiction  or in  excess  of jurisdiction  or unreasonable, illegal, or irrational  or made  with procedural  impropriety.  In such  a case, certiorari, can  quash a  decision already made.  Certiorari  will also  issue   where the rules  of natural  justice  and the right to a fair hearing are violated. Section 4 of the Fair Administrative Action Act No4 of 2015 spells out the scope of judicial review remedies as stipulated in Article 47 of the Constitution.

39. In the instant  case, and  as submitted  by the exparte  applicant’s counsel, upon receipt of the demand notice for   the payment of Customs Duty, the exparte applicant made  efforts, to get  an  explanation from the 1st respondent  the basis for the demand for the Customs  Duty  but  that the   1st respondent  kept demanding  for  payment  and  threatening  to enforce  payment and that later, the 1st respondent availed to the applicant details of the basis for the said Customs Duty which the applicant disputed , giving reasons but that the 1st respondent kept silent and instead demanded for payment.

40. Whereas this court does appreciate the need to collect taxes to lubricate the economy. In carrying out statutory mandates, the tax authorities must of necessity adhere to the law. As was held in Keroche Industries Ltd V. Kenya Revenue  Authority  & 5  Others:

“ It is  no good  answer  for the   tax   man to  proclaim that shs 1 billion ( approx)  is intended to swell  the public  treasury because due to the application of the  above principles  that money  is not lawfully  due.  Applying the same  reasoning, to the  matter  before  this court, it does not  matter  that the  respondents  say and  think   they are   owed over  a billion  Kenya  shillings.  What   matter is   whether the amount is lawfully due and whether the law allows its recovery?  It is not a question of impression or perception of what   is owed, instead, it is what is anything is owed under the relevant law and whether its assessment and recovery is permitted by the applicable law. If rightly due, the huge amount notwithstanding  the court must uphold the right of recovery regardless of its  consequences  to the  applicant and if not due  under the law   it must  not  hesitate  to  disallow  it and  must  disallow it to  among  other things, to uphold  both the law  and the integrity  of   the Rule of Law.”

41. From the above decision, it is noted that the tax collector is under a duty not only to collect taxes due but to give an explanation laying the basis upon which tax is demanded, and not just throwing figures at the tax payers.

42. However,  the exparte  applicant  in this case does not stop at  stating  that  the 1st respondent  did not  explain the   basis of  the tax Customs   Duty.  It goes further to state  that when  the  1st respondent  finally provided the  details of the Customs Duty as  demanded, some of the imported  goods   were  not the  type  of goods  that the  exparte  applicant  dealt  in such as motor vehicles, since   the  exparte   applicant  only dealt  in  plant  and  machinery  and its  spares. Secondly, that the exparte applicant provided a list of clearing agents, some of whom were not agents of the exparte applicant and thirdly, that the exparte applicant had already paid Customs Duty for the imported goods.

43. In my humble  view, for the court to determine  that the Customs  Duty demanded was not owed  because it related to  goods  which  the exparte  applicant  never  dealt  with, or for  this court to determine  that the named clearing  agents  were not  the agents for the  exparte  applicant,  or that the exparte applicant had paid all the Customs Duty for the goods that it imported during that period claimed by the respondents, the court will be  delving  into the  merits or demerits of the demanded  Customs  Duty and not in the  process  by which that  tax  as demanded   was arrived at.  It is not within  the province of this court to determine how much Customs Duty  was due, and or whether  or not the  exparte  applicant had paid all  the Customs  Duty due for the goods imported during the period and that   therefore the  1st respondent had no basis  upon which it was  demanding for the nearly shs  100,000,000 as being the Customs  Duty due  on the listed  items.

44. For this  court to determine that   the exparte  applicant   was not the importer of the  items   listed  in the list provided  by the  1st  respondent,  the court  has to call for evidence  to be adduced, showing what the   exparte  applicant  is licensed  to import.  It must also   call for evidence    on who are the clearing agents   for the applicant and eliminate all others who are  strangers  to the applicant.  The court must also listen to the evidence of what items were imported by the applicant during the period in question and demand for proof of whether the Customs Duty assessed on those items was settled by the exparte applicant. In other words, the court will be hearing the merits  and demerits  of whether or not  any Customs  Duty is  due to the  2nd respondent  as demanded   by the 1st  respondent. And for this court to find that the demand for Customs Duty from the applicant by the respondents is illegal, it must be shown what specific provision (s) of the law was breached or violated by the respondents and or that the applicant was in the first place not and importer of any goods or at all and therefore no Customs Duty could be demanded of it under any circumstances.

45. In view of the above, I find that in this case, the court is being called upon to resolve a dispute   on conflicting issues of fact. Such a dispute  is not a suitable  case for  Judicial Review remedies since Judicial Review  jurisdiction is a special  jurisdiction  which is neither  civil not criminal. It is  governed by  Section 8 and  9  of the Law  Reform  Act, Cap  26  Laws of  Kenya, the Fair  Administrative  Action Act  No. 4  of   2015   and Order   53   of the Civil Procedure  Rules.

46. Under section 4 of the Fair Administrative Action Act, 2015, the Act sets out situations that would warrant judicial review orders to issue. None of those situations outlined under the Act have been established to exist in the circumstances of this case.

47. In the instant case, for this court to determine the many questions in the dispute, the court will have to make certain declarations in the matter such as a declaration that no Customs Duty as claimed was due and owing by the applicant to the respondents, yet the exparte applicant has not sought any declaration orders as a Judicial Review remedy, as contemplated in Section 11 of the Fair Administrative Action Act No.  4 of 2015.

48. In addition, the exparte applicant has not sought for any directory orders for this court to compel the 1st respondent to provide the applicant with any other explanatory reasons for demanding the Customs Duty.  It  was not shown  to the satisfaction of the court that  the  1st respondent had no basis for demanding  for Customs  Duty since as conceded by the applicant, it had previously paid the  Customs Duty  that had been due.  The fact  that the 1st respondent had  not,  in its previous  demands  for VAT and  Withholding Taxes not included   Customs Duty does not on its own and prima facie preclude  the  1st respondent   from  demanding  for Customs  Duty which may be due.

49. The exparte  applicant   failed to  demonstrate  to this  court that  it   was not in any way liable  to  pay any Customs Duty  or at all, and  that therefore  the demand   thereof by the  1st respondent  was illegal, irrational, unreasonable  or with  procedural  impropriety or motivated by an ulterior motive.  It  was not  shown what  factors  the  1st respondent ought to have taken into account  but which it never took  into account  in demanding for the Customs Duty Tax and therefore  calling  for the intervention of the court by way of Judicial Review  orders.  Neither did the exparte applicant demonstrate to the court that the respondents in demanding  for the Customs Duty   were in breach of   a specific statutory duty imposed  upon them under the  law.

50. The purpose of Judicial Review, as was earlier stated in Chief Constable of North Wales Police V Evans (supra) is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment reaches on a matter   which it is   authorized   by law   to decide of itself   a conclusion which is correct in the eyes of the court.

51. In Republic vs.  Ministry of Planning   & Another, Exparte Professor Mwangi HCC Miscellaneous Application 1769/2003.  The court quashed a  decision  of a statutory   body for  failing  to comply with  the legislative  purpose and stated:

“ so  where a body  uses  its powers  in a manifestly  unreasonable  manner, acts in bad faith, refuses to take  relevant  factors  into account  in reaching its decision   or based on  irrelevant  factors, the court  would  intervene  on that ground that the body has in each  case abused  its powers.  The reason why the court  has to intervene is because  there is  a presumption that where  Parliament  gave   a body statutory  power  to act, it would  be implied  that Parliament  intended  it to  act in a particular  way.”

52. In the instant case, it has not been shown that the respondents failed to act in a particular way stipulated by statute or that the respondents abused their powers in a manifestly unreasonable way or acted in bad faith. In my humble  view, anomalies relating  to the entries  concerning  importation of goods, the types of goods  imported and  the names of clearing agents are not  matters  which  relate  to procedure  but call for evidence  to be  adduced to determine the  merits of  the decision of the respondent to demand for  Customs Duty.

53. Furthermore, where the Customs Duty is demanded  in error, the exparte applicant  has  a remedy.  It can  object  to such  demand  as  stipulated  in Sections  229 and  230 of  East  African  Community  Customs  Management  Act (EACCMA) or to  appeal  to the Tax  Appeals  Tribunal  stipulated in the TAT Act of   2013  to challenge  the  correctness  of the demanded tax since determination of taxes due involves calculations and verification of what was imported, and their value as declared by the importer.

54. This court  does  not buy the argument  by the exparte  applicant  that the objection or appeal  would  only  lie if reasons  had been  given to  enable  the applicant apply for review under sections 229 and 230 of the EACCMA or  on appeal  before the Tax  Appeals  Tribunal and that  it has  invoked  Article 47(2)  of the Constitution.  In my humble view, the applicant  can  still challenge the demanded  taxes  through the statutory available  channels by  stating  that  it  was not given  reasons for  the demand, or that the applicant did not import the goods for which Customs Duty was being demanded or that some of the clearing agents named were not contracted by the applicant and provide evidence to that effect.

55. Nonetheless, on the issue of whether or not reasons for the demand were provided  by the 1st respondent, as  I have stated  above, the applicant  clearly  states  that when  the 1st respondent  persisted in its  demand for  Customs  Duty and the applicant  kept asking  for reasons, there   were meetings   held and  as  shown by  annexture  JMN9, the applicant sets out a raft  of issues referring to  the 1st respondent’s letter  dated  22nd  October  2015  which had  attachments of Samba System entry numbers in respect of which the  1st respondent  claimed that taxes  had not been paid  as shown by  annextures  JMN 10, JMN 11 and  JMN-12.

56. In addition, although the  exparte applicant   invoked  Article  47(2)  of the Constitution  on fair administrative  action which is in order,  the said  Article  is implemented   through the Fair Administrative  Action  Act No. 4  of  2015.  Section 9(2) of the Fair Administrative  Action  Act makes  provision that:

“The High Court   or a subordinate  court   under Subsection   Shall not review  an administrative  action or  decision under this Act unless the mechanisms including internal mechanisms for  appeal  or review and all  remedies  available  under any other written  law are  first  exhausted.

The  High Court -- -- shall  if not  satisfied  that the remedies  referred  to in   Subsection (2)  have been  exhausted, direct  that the applicant shall first  exhaust  such remedy  before  instituting  proceedings under Sub Section (1)

Notwithstanding Subsection(3)the High Court…..may, in exceptional circumstances and on application by the  applicant, exempt  such person  from the obligation to  exhaust  any remedy  if the  court  considers such  exemption  to be in the interest  of justice.”

57. From the above provisions it is clear that the existence  of alternative  or  internal  mechanisms  for appeal or  review  and all other remedies  available  under any  other written law ousts the jurisdiction of the court from  entertaining  Judicial Review  proceedings in the first instance, and the court is  empowered  to refuse to make Judicial Review orders or  to direct  that such  mechanisms  be exhausted  first  or on application, and upon being  satisfied  that there  are exceptional circumstances, exempt  the applicant  from obligation to  exhaust   any remedy, if the  court  considers such exemption to be  in the interest  of  justice.

58. In the instant, case, however, it is not the availability of alternative mechanisms for challenging the 1st respondent's decision to demand for Customs Duty alone that has characterized my findings.  And  even so, there  was no application by the applicant  for consideration  as to  whether or not  there are exceptional  circumstances warranting exemption from obligations to exhaust  the objection  to the demand  for Customs  Duty  under the provisions  of Sections  229 and  230 of the(EACCMA) and or the  Appeal  process under  Section  2 of the  Tax Appeals Tribunal Act, 2013.

59. From the reading of Section 9 (2) of the Fair Administrative  Action  Act, 2015, there is no  discretion for the applicant  to chose whether  to exhaust  or not to exhaust   internal mechanisms  or appeal process  and it is  only  the court that  can grant  an  exemption to exhaustion of other processes.  In this case, the applicant never applied for grant of any orders of exemption as contemplated in Section 9(4) of the Fair Administrative Action Act No. 4 of 2015.

60. From the reading  of the above Act, it is clear  that Judicial Review  remedies  being discretionary  it follows  that they are of the last resort as the court  is not bound  to grant  them as a matter of course. The applicant must satisfy the court that the provisions of Article 47 of the Constitution have been violated and/or that the conditions under section 4 of the Fair Administrative Action Act have not been complied with by the respondent to the letter in decision making processes.  In Republic Vs  Judicial Service Commission  exparte  Pareno [2004] 1KLR 203- it  was held:

“ The court  may thus  refuse  to issue Judicial  Review orders even where the requisite grounds  exist, since  the court  has to  weigh  one thing  against another and see  whether   or  not the  remedy  is the most  efficacious in the circumstances  obtaining and since  the discretion of the  court is  a judicial one, it must be  exercised  on the evidence  of  sound legal  principles.  The court   would not issue orders in vain even where it  has  jurisdiction  to issue  the prayed  orders.  And since the court   exercises  a discretionary  jurisdiction in granting  Judicial Review  orders, it can withhold  the gravity   of the order  where, among other reasons, the remedy  is not  necessary, not  efficacious or where  the path  of the remedy is strewn  with blockage  or where it would  cause administrative  chaos  and public  inconvenience  or where  the object  for which the application  is made  has already been realized.”

61. By the Fair Administrative Action Act prohibiting the High Court from hearing and granting Judicial Review orders where there are other mechanisms for review or appeal, no doubt, the  applicant was expected to exhaust those other available mechanisms or show that those other mechanisms are not efficient and or that following those other procedures would impede on its right to a fair trial., which, in this case, was not shown.

62. In Samson Chembe Vuko V Nelson Kilumo & 2 Others [2016] e KLR, the Court of Appeal citing several  other decisions with approval among them:

i.Speaker  of the National Assembly vs Karume [2008] 1 KLR  425 where the  Court of Appeal  held inter alia:

“……..where  there is  a clear procedure  for the redress  of any particular  grievances s  prescribe  by the Constitution  or the Act  of Parliament, that  procedure  should be strictly  followed….”

ii.And inMutanga Tea & Coffee Company Ltd Vs Shikara  Limited  & Another [2015] e KLR  the Court of Appeal reiterated the  foregoing as follows:

“…….This court has in the past emphasized  the need for aggrieved  parties  to strictly  follow  any procedures that are specifically   prescribed  for resolution of  particular  disputes (Speaker of the National Assembly V Karume)(supra), was  a 5(2)  (b)  applicant  for  stay of execution of an order of the  High Court  issued in Judicial  Review  proceedings rather than  in a petition  as required by the Constitution.  In granting the order, the court made the often –quoted statement that:

“[W] here there is a clear procedure for the redress of any particular grievances prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed.  ( see  also Kones  v Republic  & Another  exparte  Kimani  Wa Nyoike  & 4  Others  [2008] e KLR (ER) 296)

“It is readily apparent that in those cases the Court was speaking to issues of the correct procedure rather than of the correct forum for resolution of a dispute. However, we entertain no doubt in our minds that the reasoning of the Court must apply with equal force to require an aggrieved party, where a specific dispute resolution mechanism is prescribed by the Constitution or a statute, to resort to that mechanism first before purporting to invoke the inherent jurisdiction of the High Court.

The basis for that view is first that Article 159 (2) (c) of the Constitution has expressly recognized alternative forms of dispute resolution, including reconciliation, mediation, arbitration and traditional dispute resolution mechanisms. The use of the word “including” leaves no doubt that Article (159(2)(c) is not a closed catalogue. To the extent that the Constitution requires these forms of dispute resolution mechanisms to be promoted, usurpation of their jurisdiction by the High Court would not be promoting, but rather, undermining a clear constitutional objective. A holistic and purposive reading of the Constitution would therefore entail construing the unlimited original jurisdiction conferred on the High Court by Article 165(3)(a) of the Constitution in a way that will accommodate the alternative dispute resolution mechanisms.

Secondly, such alternative dispute resolution mechanisms normally have the advantage of ensuring that the issues in dispute are heard and determined by experts in the area; and that the dispute is resolved much more expeditiously and in a more cost effective manner.…

…..We are therefore satisfied that the learned judge did not err by striking out the appellant’s suit and application which sought to invoke the original jurisdiction of the High Court in circumstances whereas the relevant statutes prescribed alternative dispute resolution mechanisms and afforded the appellant the right to access the High Court by way of appeal, which mechanisms he had refused to invoke. To hold otherwise would, in the circumstances of this appeal, be to defeat the constitutional objective behind Article 159(2) (c) and the very raison d’etre of the mechanisms provided under the two Acts……”

63. In International Centre for Policy and Conflict & 5 others v. The Attorney General & 4 others it was held:-

“An important tenet of the concept of the rule of law is that this court before exercising its jurisdiction under Article 165 of the Constitution in general, must exercise restraint. It must first give an opportunity to the relevant bodies or state organs to deal with the dispute under the relevant provision of the relevant    statute...."

64. It is now settled law and judicial opinion that where the Constitution or any law provides a procedure for settlement of disputes, that procedure shall be followed before resort to the High Court or any other procedure provided by law.  That is the effect of Articles 50(1) and 159(2) of the Constitution which stipulate that :

“50(1)       Every person has the right to have any dispute that can be resolved by the application of law decided in a fair and public hearing before a court or, if appropriate, another independent or impartial tribunal or body.”

65. In Article 159(2) of the Constitution stipulates that –

“159(1)     …….....

(2)    In exercising judicial authority, the courts and tribunals shall be guided by the following principles –

(a)     Justice shall be done to all, irrespective of status;

(b)     Justice shall not be delayed;

(c)    alternative forms of dispute resolution including reconciliation, mediation, arbitration and traditional dispute resolution mechanisms shall be promoted, subject to clause (3);

(d)   Justice shall be administered without undue regard to procedural technicalities; and

(e)    The purpose and principles of this Constitution shall be protected and promoted.”

66. From  the above   decisions  and  provisions of the statute and the Constitution, it is clear  that as  recent  as 27th day of May  2016  when the Court of Appeal rendered  the decision in Samson  Chembe   Vuko V Nelson  Kilumo (supra), parties  ought not to invoke  the jurisdiction  of the High Court in Judicial Review  matters  where there is an alternative  dispute  resolution mechanism  established by an Act of Parliament and which is efficacious. In this case, it was not shown that the application of sections 229 and 230 of the EACCMA and the appeal process under The Tax Appeals Tribunal Act are not efficacious in the circumstances of this case.

67. Albeit the authorities, relied on by counsel for the applicant are relevant, they are however, not in pari materia  with this case, which  raises serious unresolved conflicting issues of fact  and which issues are likely to be a source of  serious future conflicts since as earlier stated, Judicial Review  applications  do not   deal with the merits  of the cases  but only with the process of decision making.

68. In other  words, in Judicial  Review  applications, the court has  jurisdiction  to determine whether  the decision  makers  had the  jurisdiction,  whether the  persons  affected by the  decision   were heard  or given  an  opportunity  to be heard  before the decision was made  and whether  in making the decision  the decision maker  took into  account relevant  matters or did not take  into account  relevant  matters.

69. This court  notes that the  letter dated  31st March  2016  demanding for customs duty did refer  to earlier communication, and  meetings   between the 1st respondent  and the applicant’s  directors  and it specifically  mentioned that the  Customs  Duty as claimed was due  and payable as  a result of the imports claimed by  the applicant  that do not  exist  in the Simba System  and others  declared with  lower CIF  values  between  2010  and   2013  years.

70. Although  the applicant  claimed  that it  was not responsible  for the Simba  System, it  never raised  any issue  regarding  the lower CIF values, which in my humble  view, are serious   matters which  can only be determined either  through  internal  appeal mechanisms  or through  the ordinary claims under the Civil Procedure  Act or through  claims of a declaratory  nature, not by way  of certiorari or prohibition, which the applicant herein has sought by its Notice of motion. The applicant had the option of filing a Constitutional petition to challenge the 1st respondent's decision and seeking for declarations since in a court faced with a constitutional petition would consider the evidence and merits of a decision.

71. I find that unlike in the decision by Majanja J in PZ Cussons V Kenya Revenue Authority Petition 309 of 2012, this is not a Constitutional Petition. There is a difference between a Constitutional Petition and a Judicial Review proceeding.  In Constitutional  Petitions, the court  is bound to examine   the merits  of the decision of the public body  and make a  final  determination on the merits thereof, unlike in the Judicial Review  proceedings  where  the court's  jurisdiction as earlier  stated  is confined to the legality, rationality, reasonableness and  propriety of the  process  by which the decision  maker  arrived  at its  decision and as stipulated in section 4 of the Fair Administrative Action Act No. 4 of 2015.

72. Therefore, albeit Majanja J in the PZ Cussons (supra)  case did, in determining  the Constitutional  Petition  refer to Article  47(2) of  the Constitution and held that there  was  the duty  to give  reasons on how Kenya Revenue Authority  had arrived at  the   amount  it  claimed  as tax and that the  failure  to give  reasons   was  unreasonable, in the instant case, the letter  dated  31st March  2016 gives reasons  for the demand  and the details  are contained  in annextures 10,11 and 12  to exparte applicant’s  sworn verifying  affidavit sworn, and however  inadequate  the reasons may have  been, it  was  upon  the applicant  to formally  engage the  1st   respondent  further  through the  established statutory  mechanisms to challenge  the decision to demand  for the Customs   Duty as  claimed  and not just  through letters since, in my   humble view, an internal  review  mechanism or appeal  mechanism  would be  presided   over by  more than one individual unlike in the case of correspondence letters shown which  involved  communication between a Mr O. Kwalia for  Commissioner for  Investigations and Enforcement, and  the applicant herein  or its  tax advisors.

73. The court further notes that the decision in JR  1768/2004  Republic Vs  Kenya Revenue Authority   exparte  Intel  Limitedwas a Judicial Review  proceeding challenging  a letter “ rejecting   the applicant’s  objection to assessment  of withholding  tax……”  and seeking  that  that order be  quashed. In that case, therefore, unlike in the instant case, the exparte applicant   sought to quash an order or decision that rejected the objection to assessment of Withholding Tax claimed.  In the instant case, however, the exparte  applicant has made it clear that the 1st respondent  did  misapprehend  the applicant’s letters seeking further information and mistook those letters for objection to assessment of Customs Duty and  that the 1st respondent instead wrote on  6th July  2015 reiterating its earlier  demand for  the Customs  Duty.  According  to the  applicant, its  letters  to the 1st respondent through the applicant’s tax advisors  were not  objections but merely  seeking  particulars with  regard to the claim  as  well as  time  within which to confer and consider the demand.

74. It is  from the foregoing analyses  that I find that although this matter  was not defended   as such, but that the burden of proving the entitlement   to the Judicial  Review  remedies  sought in the Notice of Motion herein lay on the exparte  applicant and not on the respondents. That burden was not discharged to the standard required, on a balance of probabilities. Accordingly, I find that the prayers sought in the Notice of Motion dated 22nd April 2016 are not merited and I proceed to dismiss it.

75. On the issue of costs, as the court has not been engaged  in the determination  of the merits  of the impugned  decision of the  1st respondent  and as the  respondents  did not  put up any useful  fight to  challenge  these proceedings, I order that each party shall bear  their own costs of these Judicial  Review proceedings.

Dated, signed and delivered in open court at Nairobi this 16th day of November, 2016.

R.E. ABURILI

JUDGE

In the presence of:

Miss Malik for the Exparte applicant

N/A for the Respondents

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