Commissioner of Custom Services v Kenya Petroleum Refineries Limited
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether a legitimate expectation arose from the Commissioner's 1965 instructions and 45-year practice of not collecting duty
Yes. The instructions copied to the Refinery, particularly paragraph 15(a) permitting duty-free use of oil in the refinery, combined with the Commissioner's subsequent practice of not collecting duty for over 45 years, created a legitimate expectation in the Refinery.
The court applied the Supreme Court's principles in Communications Commission of Kenya and Kenya Revenue Authority v Export Trading Company: an expectation founded on a promise or practice by a public authority, which it was competent for the authority to make, is legitimate. The 1965 instructions were express, copied to the Refinery, and the non-collection of duty continued for over 45 years, confirming the expectation and rendering the unilateral backdated demand arbitrary, unfair and unreasonable.
Whether the High Court could consider legitimate expectation after declining to interpret the statutory phrase 'delivered from the Refinery for home consumption'
Yes. The Judge properly declined to determine taxability, which was a matter for the Tax Appeals Tribunal or the High Court on appeal, and properly confined himself to the decision-making process, including the legitimate expectation question.
The application was brought under Order 53 without constitutional claims, so the court was limited to procedural propriety, not the merits of the tax decision. Whether the taxes were payable or the amount due was for the Appeals Tribunal or the High Court on appeal. The Judge properly appreciated his jurisdiction in declining to make a finding on taxability while still assessing the fairness of the decision-making process.
Whether Article 210 of the Constitution or a change in legislation defeated the legitimate expectation
No. Article 210 does not outlaw waiver or variation of taxes but allows them in accordance with legislation, and the Commissioner failed to demonstrate any change in law rendering the waiver illegal.
The court acknowledged that a change in law making duty payment mandatory could affect the legitimacy of the expectation. However, although the Commissioner claimed the law had changed, no such change was demonstrated to the learned Judge. As the party asserting the change, the Commissioner bore the burden of proving it and failed.
Legal principles established
#- Where a public authority has, by express representation or by conduct and long-standing practice, induced a person to believe it would continue enjoying a benefit or advantage, and the authority had power to make the representation, the person has a legitimate expectation that cannot be withdrawn unilaterally without consultation or a hearing
- A judicial review application brought under Order 53 of the Civil Procedure Rules without alleging violation of constitutional rights confines the court to the procedural propriety of the decision, not a merit review
- The party asserting that a change in law has rendered a prior waiver or practice illegal bears the burden of proving that change
Court orders
#- 1.Appeal dismissed
- 2.Reasons given by the learned Judge on costs upheld; each party to bear their own costs in this appeal
- On appeal from
- High Court of Kenya at Nairobi
- Misc. Civil Application No. 46 of 2012
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction; judicial review application below brought under Order 53 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Commissioner of Custom Services v Kenya Petroleum Refineries Limited", Case Analysis (2024). Civil Appeal 201 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1937/eng@2024-12-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.