Blow to Chinese road firm after court declines to refund cess fee
Justice Matheka ruled that the squatters had failed to prove that they possessed the land in an open, visible, continuous and uninterrupted period of 12 years.
A Chinese construction firm has suffered a blow after the High Court in Mombasa declined to refund Sh110,600 in cess it paid to Kwale County.
Resident Judge John Mativo said H Young & Co (E.A.) Ltd failed to prove that the county acted illegally or in excess of its powers when it imposed cess on minerals it was excavating in the county.
“The petitioner, having failed to establish the illegality of the cess paid, the plea for a refund of Sh110,000 is totally unmerited and far-fetched and unavailable,” said the judge.
The company was hired to upgrade the Mwache Junction-Tsunza Mteza road in the county, among other projects. It was to use murram excavated from a leased quarry.
The county imposed Sh110,600 in cess for the murram. It paid but went to court to challenge it, lamenting that it was being taxed twice.
In court documents, the company lamented that the 2014 Kwale Finance Act did not specify the service that the county provides in exchange for the fee or charge demanded in cess for ballast.
“The demand for payment of cess contravenes the law,” the company said. It lamented that its protest was not addressed by the county and its trucks ferrying the murram were clamped, forcing it to pay the cess.
It sought orders prohibiting the county from levying the cess for murram and refund the money it used to free its trucks after they were clamped over non-payment of the fee.
The firm argued that the demand for cess was a ploy to intimidate it and force it to pay an illegal fee not known to the law.
“The county government’s act to demand cess payment over murram without proper legal foundation or basis is an affront to the constitution and the Mining Act 2016,” the firm said.
The company also argued that it did not use the murram for commercial purposes but to construct a public road in the county.
“Royalties (if any) are levied on minerals which are governed by the Mining Act, a function regulated by the national government,” the firm said.
It also argued that the owner of the property where the murram was excavated was liable to pay taxes to the county and imposing cess for the product amounted to double taxation.
It claimed that the 2014 Kwale County Finance Act created double unconstitutional taxation, and that the levy had no legal foundation.
Opposing the petition, the county’s representative, Alex Onduko, said the cess is collected legally under legislation passed by the assembly in 2014.
He said the payment conforms with the 2014 Kwale County Finance Act and the 2016 Kwale County Quarrying Act.
“The imposition and collection of cess is founded on the county legislation as required by the law. The constitutionality of the said [legislation] has not been challenged,” he said.
He clarified that the cess charged under the county legislation is on transporters ferrying minerals specified in by-laws.
“Cess is a service charge on services provided by the county to the firm and it is lawful. Cess is imposed for using the roads but not on the mining activities,” Mr Onduko said.
Judge Mativo agreed with the county and said the petitioner should have challenged the legality of the legislation before seeking to declare the cess illegal.
The court noted that the power to impose the cess flows from the cited legislation whose legality or constitutionality has not been challenged.
“Ironically, the firm now urges the court to find that the cess is unlawful. One wonders how a court of law properly directing its mind to the law can declare the cess illegal while the law creating it is unchallenged,” the judge said.
Justice Mativo dismissed the case, noting that the work the firm was undertaking was for private gain and that nothing was provided to suggest that the refund will go to the public.
