Keroche Breweries has been ordered to pay Kenya Revenue Authority Sh100 million to stop the taxman from attaching its assets in a Sh9.1 billion dispute.
Court of Appeal Judges William Ouko, Daniel Musinga and Patrick Kiage said the Naivasha-based brewer had only 45 days to make the payment, failure to which KRA would be free to raid its accounts.
Keroche moved to the appellate court after it was unable to pay KRA Sh500 million set by High Court judge David Majanja.
The firm said Majanja failed to consider its inability to raise the amount.
It argued that its appeal would be rendered useless if the notices issued by KRA to its bankers were not lifted.
The notices, according to Keroche, would ground the operations of the company.
Making the ruling on Thursday, the appellate judges lifted the agency notices issued on Equity Bank and Absa Bank of Kenya pending determination of the intended appeal by Keroche.
The judges said they took into consideration the challenging economic circumstances in which Covid-19 has put the country and the entire world.
“It is evident that KRA has issued agency notices to Keroche’s bankers. Unless the orders sought are granted, the agency notices shall be effected and Keroche's operations will be grounded, thus rendering the appeal nugatory,” the judges said.
KRA was opposed to Keroche's application, saying the earlier condition of Sh500 million set by justice Majanja was lenient.
It urged the court to dismiss the application, adding that it had previously extended an olive branch to Keroche over the payment of taxes, including entering into alternative dispute resolution agreements for part payment of its tax dues but Keroche had reneged on the same.
But Keroche maintained that it would be unable to repay a loan it took from Absa Bank whose monthly repayment is Sh57 million, in which event the bank would call up the loan and liquidate its assets, which would lead to automatic collapse of the company.
Edited by Henry Makori