The Appellant imports and refines/processes edible oils for both the local and export
markets.

During the period 2012 - 2013 the Appellant applied for and was granted
remission for Value Added Tax (VAT) in respect of crude palm oil products
imported for manufacture of Oil products for export, namely but not limited to vegetable oils/fat, laundry bar soap and glycerin.

2. The Respondent gave the remission on condition that the Appellant executes security bonds for the due performance under the remission scheme and further that the raw materials imported by the Appellant were for the manufacture of goods for export
purposes. The purpose of the security bonds is to enable the Respondent recover any taxes found due.

3. The Respondent executed the said security bonds and proceeded to import the raw materials i.e. crude oil and palm oil and manufactured products for exports to
various destinations.
The Tribunal will address the issues of both the Appellant and the Respondent simultaneously as hereunder.

4. While agreeing with the Appellant that the word 'return' does not
appear In Section 11(1) of VAT Act Cap 476 Laws of Kenya, it is clear that the said Section should be construed in reference to other related
provisions of the Act and not in isolation.

5. The Tribunal notes that the only way one can claim deduction of
input VAT is by filing the VAT Returns. Hence, the Tribunal finds that it does not agree with the argument of Appellant that there can be
any other way to claim input VAT by way of declaring the same in the VAT Returns

The Appellant argued that the Respondent has threatened to institute recovery
measures for the demanded taxes amounting to Ksh: 134,883,572 as at 20th
November 2014, which sum they allege, is colossal if paid to the Respondent will
adversely and severely affect its operations and cause irreparable loss and damage to
the Appellant.
12. The appellant further alleged that it is apprehensive that the Respondent would not
be in a position to refund any monies if the intended Appeal is successful and its
appeal will be rendered nugatory.

In view of a foregoing the Tribunal orders the following)
The Appellant's application filed on 10th May, 2016 is hereby allowed with costs
to the Respondent.
b) The Respondent's costs are hereby assessed at Ksh: 50,000/= payable within
seven (7) days from the date hereof.
c) The Appeal be set down for hearing