Businessman Humphrey Kariuki (right) and his lawyers Kioko Kilukumi (left) and Cecil Miller (centre) in a past court appearance. /CFM-FILE.
NAIROBI, Kenya Oct 14 – The Directorate of Criminal Investigations (DCI) has been faulted for usurping the powers of the Kenya Revenue Authority (KRA) by probing tax evasion in respect of African Spirits Company and Wines of the World (WoW) Beverages Limited.
Businessman Humphrey Kariuki is facing charges over Sh41 billion tax evasion alongside other directors of the firm who are all out on bond.
Justice Luka Kimaru, said in his judgment Monday that the DCI lacks jurisdiction to investigate matters related to tax. The mandate, he said, is the preserve of KRA under the Constitution.
The judge held the submissions of the company lawyer Cecil Miller to the effect that they are bestowed upon the Asset Recovery Agency and not the office of the DCI.
He consequently dismissed the application filed by the DCI that is pending before the Chief Magistrate’s court in Kiambu.
The court further said the orders that purported to freeze bank accounts of the company were illegal and stands set set aside.
“The police or officers from the DCI office had no role to play in investigating the matter purely under the commissioner of income tax,” Miller told the court.
He told Justice Luka Kimaru, charges facing the eight directors of the two companies is a civil matter and not criminal, that ought to have been resolved by the Commissioner of income tax who is mandated under the law to collect tax on behalf of the government.
The DCI and DPP were faulted for abusing their offices by recommending the prosecution of the eight directors, whom KRA should have asked to pay tax due.
The taxman’s power cannot be transferred to the DCI when the authority has a department known as Protection Service Agency which has the mandate to investigate matters pertaining to payments of taxes.
In abuse of power, the DCI and DPP filed several applications in different courts seeking preservation of orders on bank accounts owned by the directors, which ought not to have been filed in the lower court.
Under the income tax, it is the commissioner who has the power to appoint officers to carry out searches after obtaining warrants and not the officers from the DCI, the court heard.
“The orders obtained by the DCI from Kiambu court on August 16 not only were illegal but irregular and could not be enforced,” the lawyer submitted.
The commissioner did not issue a notice for tax assessment to the two companies as required by law.
According to Miller, the authority ought to have summoned the directors for purposes of discussing taxes owed or the matter be taken to a tribunal, instead of instituting a criminal proceeding.
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