High Court grants partial relief to float glass processors in excise duty dispute

The Judiciary /File

The High Court has granted partial interim relief to registered float glass processors in a dispute over non-issuance of a legally mandated excise duty exemption under the Finance Act, 2025.

The orders, issued by Justice Bahati Mwamuye, provide temporary protection to the processors pending the full hearing of the petition.

The petition, filed by Peter Imbayi Indasi, a registered float glass processor and member of the Kenya Association of Manufacturers (KAM), challenges the alleged failure of the Cabinet Secretary for Investment, Trade and Industry to communicate the statutory exemption to the Kenya Revenue Authority (KRA).

The exemption, enacted by Parliament under the Finance Act, 2025, was intended to support local value addition and industrialisation by registered processors.

The petitioner argues that the prolonged delay in issuing the exemption exposed local processors to “severe economic harm, including detention of consignments, demurrage, and disruption of operations”, which Parliament intended to prevent.

According to the petition, the ministry had verified 10 registered processors in August last year, including Aluglass Africa, Muffadal Glass Distributors, Impala Glass Industries, Empire Glass, Canon Aluminum, Titan Glass, Autoclave Glass, Hebatullah Brothers and Eurostar Industrial Limited.

The petitioner says the verification report recommended approval of the exemption, yet four months down the line, none of the companies has been formally exempted.

“Four months down the line, none of the companies has been formally exempted despite the ministry conducting due diligence and following the laid down procedure for verification of the status of the said companies,” court records show.

In the interim orders, Justice Mwamuye directed KRA to temporarily and conditionally release the concerned processors from the excise duty.

"Such release shall be on condition that the concerned persons or entities provide the second respondent (KRA) with bank security or insurance bond in the amount of the impugned excise duty applicable," the judge ordered.

The court directed the authority to maintain records of taxes and any statutory charges foregone arising from compliance with the orders, ensuring transparency and accountability in the event that the petition is not ultimately successful.

The court also ordered that the petitioner serve the respondents and the interested party with the petition and orders immediately, and to file affidavits of service to confirm compliance.

The petition argues that the continued imposition of excise duty on verified processors is irrational and contrary to reason, defeating the statutory purpose of supporting domestic value addition and industrialisation.”

Without the exemption, it says, some processors face charges for consignments on the high seas, while smaller entities risk potential closure and consequent job losses.