Lessons from Ngure t/a Dasken Enterprises v Total Kenya Limited & Another (Commercial Case E475 of 2020) [2026] KEHC 12256 (KLR)
Introduction
Total Kenya’s licence with its dealer at a Road Service Station ended in law on 31st December 2019 yet customers were still being invoiced and withholding tax certificates still being issued under the KRA PIN of a dealer who no longer ran the station, right up to 18th August 2020. Additionally, he was also left out of his own iTax portal and was unable to file a return or obtain a tax compliance certificate. The High Court found that Total had unlawfully continued trading on the dealer’s business name and PIN, held that the resulting VAT, PAYE and income tax liabilities were Total’s to account for and settle and awarded him Kshs. 20,700,000.00 for the unauthorised use. KRA escaped liability for its own conduct but was still directed to clean up the dealer’s PIN once Total settled the liability.
What happened
A dealer, t/a Dasken Enterprises managed the station under a Marketing License Agreement, operating it under his own business name and KRA PIN. Once the Agreement ended, Total simply carried on trading under his name, PIN, email and telephone number without consent. Total on the other hand asserted that the station was properly handed over after termination for cause and that the tax obligations remained his regardless. KRA said it was a stranger to the agreement and that liabilities properly follow the registered PIN.
What the Court Decided and Why
A Licence that has ended cannot be kept alive on the Dealer’s PIN
The dealer produced invoices and withholding certificates showing his PIN still in active use as late as 18th August 2020, corroborated by an independent witness, while Total’s own witness could not explain the continued invoicing after handover and was contradicted by proof that Total itself kept paying the station’s staff. The Court found that Total had unlawfully continued to use the dealer’s business name and KRA PIN.
A Tax Clause binding the Dealer during the Agreement does not survive it
Total relied on a clause placing tax obligations on the dealer but the Court confined it strictly to the life of the agreement. Once it ended, the dealer had no authority, no portal access and no benefit from the transactions still run through his PIN, while Total held every document needed to settle them and its own witness confirmed that changing a password would not cure invoices already issued. Total, having created the liabilities through its own post-termination conduct was held liable to account for and settle them in full.
KRA was within its mandate and a damages clause turned back on its author
KRA had not acted outside its mandate since tax follows the registered PIN holder and it cannot unilaterally reapportion liabilities, though it was still directed to clear the register once Total settles. The Court also found the dealer’s rights to privacy and property under Articles 31 and 40 of the Constitution were violated, and Total’s continued use of his personal data after consent was withdrawn a breach of section 30 of the Data Protection Act.
The Orders and the Award
Total was ordered within 30 days, to account for the VAT and income tax returns filed on the dealer’s PIN for 2017 to 2020, and within 90 days to file and settle the associated VAT, PAYE, income tax and NSSF obligations. The centrepiece was the award of Kshs. 20,700,000.00, calculated at Kshs. 90,000.00 per day for 230 days from 1st January to 18th August 2020 with interest at court rates until full payment. KRA was directed to delete or apportion the liabilities to Total’s own PIN within 30 days of settlement.
Key Take-Homes for Stakeholders
Dealers, franchisees and licensees
Your PIN stays exposed after the contract ends. On exit, change your iTax credentials, email and telephone number, notify KRA in writing that third-party authority has ended and demand in writing that the principal stops invoicing under your PIN.
To businesses operating through agents, distributors or franchise arrangements generally.
This case is not confined to fuel retailing, the same exposure arises wherever a business trades, invoices or files statutory returns under an agent’s or distributor’s name, licence or registration rather than its own. A tax clause binding the dealer during the agreement will not cover post-termination trading. Once any agreement ends, trade and invoice under your own registration and strip the dealer’s PIN or otherwise you will expect an order to account, settle and compensate for tax liabilities.
Advocates and tax agents & tax compliance teams
Liabilities follow the registered PIN holder as far as KRA is concerned, so pursue the party that generated them and join KRA for the consequential deletion or apportionment order.
Disclaimer: This post is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in this article should be assumed without seeking specific legal advice on the subject matter. If you have any query regarding the same, please do not hesitate to contact our Tax Law and Consulting Department; TaxLaw@wamaeallen.com .
About the author
Caxstone specializes in civil, employment and labour disputes, constitutional law, family law and succession, and environment and land matters. He has amassed a wealth of knowledge and experience in litigation which is evident in the successes obtained for clients. He is an active member of the Employment and Labour Relations Court Bar-Bench committee.
