Your cat can see in colour, however not to the degree that you can, unless you are colour blind in which case you two might not be too far off each other!
In the retina are two types of cell which pick up light, namely rods and cones. It was always taught in schools that dogs and cats are colour blind as they don't have so many cone cells. I was told they had none. In actual fact they do have some, however nowhere near as many as humans. So yes, they can see colour, just not that well.
Dogs are bichromatic, only seeing in blue and yellow. Poor colour vision is actually the case for most of the mammals, with the exception of us and our bro's the primates who are pretty good at colour reception too, as are many non mammals such as fish, birds and reptiles.