Mastermind Tobacco (K) Limited has lost a Sh517 million suit against Kenya Revenue Authority after the High Court denied the cigarette manufacturer a chance to admit new evidence in court to support its case.
The case arose after the Tax Appeals Tribunal was called upon to determine whether cigarette consignments in issue were exported and hence zero-rated. Mastermind presented certificates of exports before the tribunal.
However, the tribunal ruled that the company had not proven that the consignment of goods had been imported and that it required the firm to produce further documents.
This prompted Mastermind to file the suit in court against the Commissioner of Investigations and Enforcement seeking that the court admits the inspection and verification reports to help the court make a decision.
The tobacco company also wanted the court to allow it to produce the Electronic Cargo Tracking System reports that could show that the goods in question had reached the border for inspection and verification.
“The court cannot aid a party on how to do its case. The appellant has to live with the consequences of having withheld that portion of the evidence from the Tribunal,” Justice Alfred Mabeya said in his judgment.
“This is not a case that falls within the parameters where additional evidence can be permitted on appeal.”
The taxman told the court that it had issued notices to Mastermind requesting them to provide documents and information regarding its export consignments to prove exportation.
However, the tobacco company failed to produce the same. Justice Mabeya stated that the power to allow additional evidence was at the discretion of the court, noting that the tobacco company had failed to use the additional documents before the Tribunal as it did not know that it was crucial in proving its case.
The court said Mastermind only saw the need to bring in the additional documents after the tax tribunal made the judgment in favour of KRA.