Tax authority powers are constitutionally limited : The Case of Robert K. Ayisi v Kenya Revenue Authority & another [2018] KEHC 6948 (KLR)

1. Case Overview

• Parties:
• Petitioner: Dr. Robert K. Ayisi, then-acting County Secretary and Head of Public Service, Nairobi City County.
• Respondent: Kenya Revenue Authority (KRA).
• Interested Party: Nairobi City County Government.
• Outcome:
• Petition granted in favor of the petitioner.

2. Factual Background

• Initial Request:
  KRA, by a letter dated 14 March 2016, demanded transaction details (fee notes, dates, gross amounts, VAT, nature of payments) related to legal services rendered by Prof. Tom Ojienda to Nairobi County (2009–2016), under the Income Tax Act and VAT Act.
• Response:
  Dr. Ayisi replied on 24 March 2016, stating that relevant documents had been forwarded to the Ethics and Anti-Corruption Commission (EACC) in January 2015 and were unavailable.
• Further Demands:
  On 1 April 2016, KRA issued a notice under section 59(1) of the Tax Procedures Act (TPA), demanding a payment schedule. Dr. Ayisi complied by 28 April 2016, though fee notes were still unavailable.
• Additional Documentation:
  A letter on 26 September 2016 sought contract terms, invoices, withholding tax/VAT certificates, and even witness statements; KRA warned of sanctions under sections 99 and 100 TPA.
• Arrest and Detention:
  On 4 October 2016, KRA’s Criminal Investigations Department officers forcibly entered Dr. Ayisi’s office, arrested and frog‑marched him to Times Tower. He was detained for about three hours, humiliated, then released on condition he submits the documents within ten days.

 

3. Legal Issues

Dr. Ayisi’s petition raised several legal questions:

1.        Did KRA’s actions—particularly the arrest—violate constitutional rights to human dignity, freedom, privacy, fair administrative action, and rights of arrested persons?

2.        Were the following provisions of the TPA unconstitutional because they allowed arbitrary search, seizure, or demands without judicial oversight?

o    Sections 44(1) & (2) (seizure of goods);

o    Sections 60(1) & (3) (search powers over premises/documents);

o    Section 59(4) (overriding confidentiality and privilege).

3.        Was Dr. Ayisi entitled to declarations, damages, and protective orders?

4. High Court Findings and Decision

Justice Odunga held:

• Violation of Rights:
  KRA’s conduct—particularly the coercive arrest and treatment of Dr. Ayisi—violated his rights under Articles 29 (freedom and security), 31 (privacy), 47 (fair administrative action), and 49 (rights of arrested persons).
• Unconstitutional TPA Provisions:
• Sections 44(1) & (2) and Sections 60(1) & (3) were declared unconstitutional for enabling seizure and searches without court oversight, infringing Article 31(b).
• Section 59(4) was also struck down for overriding confidentiality/professional privilege.
• Remedies:
  The court granted declarations that KRA’s actions and the TPA provisions were unconstitutional, awarded KSh 2 million in compensation to Dr. Ayisi, and granted costs in his favor.

5. Significance

This case stands as a landmark affirmation that:

• Tax authority powers are constitutionally limited—executive enforcement must respect privacy, due process, and judicial oversight.
• Arbitrary or coercive state power, even by statutory bodies, cannot override constitutional safeguards.
• Compensation is warranted when constitutional violations occur, reinforcing accountability.

6. Appellate Resolution

• Court of Appeal Ruling (May 2023):
  In Civil Appeal (Application) 287 of 2018, KRA’s appeal was dismissed in part. The appellate court upheld Dr. Ayisi’s ban on arrest but restored KRA’s powers to attach property and seize documents under the challenged TPA provisions.

Summary Table

Issue	High Court (2018)	Court of Appeal (2023)
Search & seizure under TPA	Unconstitutional (Sections 44, 59, 60 struck down)	Powers restored
Right to privacy & fair treatment	Violated by coercive arrest and demands	Arrest prohibition upheld (Dr. Ayisi cannot be arrested)
Financial remedies	Compensation awarded (KSh 2 million)	No reported alteration of compensation

 Full Case Robert K. Ayisi v Kenya Revenue Authority & another [2018] KEHC 6948 (KLR)

Fraud vitiates title, and third parties—especially banks—must take extra precautions when dealing with land transactions - The Case of Musa v Musa & 6 Others [2025]

Facts

Eric Musa challenged a series of land transfers involving family land, alleging fraud and forgery in the registration process. He claimed that the 1st respondent, a family member, unlawfully transferred land into her name and then to third parties, including a bank.

Legal Issues

1. Whether the title transfers were tainted by fraud.
2. Whether the High Court erred in dismissing claims despite irregularities.
3. Whether third-party rights (like the bank's) were protected despite the fraud.

Holding

The Court of Appeal allowed the appeal, holding that:

• The transactions were fraudulent.
• The titles were improperly obtained and therefore void.
• The Land Registrar and other parties acted outside lawful procedures.

Legal Principles

• Fraud nullifies title under Kenyan land law.
• Registered title is not indefeasible where fraud is proven.
• Banks and third parties cannot rely on defective titles without genuine due diligence.

Significance

This case strengthens safeguards against fraudulent land dealings, even where third parties like banks are involved. It reaffirms that courts will prioritize lawful ownership over procedural finality.

🔗 Read the full judgment