The Tax Appeal Tribunal is a creation of Statute by virtue of the provisions of paragraph 1(1) of the Fifth Schedule to the Federal Inland Revenue Service (FIRS) (Establishment) Act, 2007 which stipulates:
“Pursuant to Section 59(1) of this Act, there shall be
established a Tax Appeal Tribunal (hereinafter referred to as “the Tribunal”)
to exercise the jurisdiction, powers and authority conferred on it by or under
this schedule.
The jurisdiction of the Tribunal to adjudicate on disputes
and controversies arising from the provisions of the Companies Income Tax Act,
Personal Income Tax Act, Petroleum Profit Tax Act, Value Added Tax Act, Capital
Gains Tax Act and any other laws administer by the FIRS or other laws made or
to be made from time to time by the National Assembly[2] is
delineated under paragraph 11(1) of the Fifth Schedule to the FIRS Act.
Pursuant to the powers of the Minister of Finance,
Budget and National Planning to make rules prescribing the procedure to be
followed in the conduct of appeals before the tribunal[3],
the Tax Appeal Tribunal (TAT) (Procedure) Rules, 2021 was made. This Rule has a
commencement date of 10 June, 2021 and has by its provisions revoked the erstwhile
2010 Tax Appeal Tribunal Rules.[4]
My focus amongst the mouth-watering and commendable innovations
contained in the provisions of the 2021 TAT Rules, is on Order 3 Rule 6(a) which
states:
“For an Appeal against the Service or relevant tax
authority under Rules 1 and 2 of this Order, the aggrieved person shall-
(a) pay 50% of disputed amount into designated account
by the Tribunal before hearing as security for prosecuting the appeal.”
(Underlining for emphasis)
Further to the above provisions, it is pertinent to
state that the right of an aggrieved person to approach the Tax Appeal Tribunal
is copiously provided for under paragraph 13 (1) and (2) of the Fifth Schedule
to the FIRS Act, 2007 thus:
(1) A person aggrieved by an assessment or demand notice
made upon him by the Service or aggrieved by any action or decision of the
Service under the provisions of the tax laws referred to in paragraph 11, may
appeal against such decision or assessment or demand notice within the period
stipulated under this Schedule by the tribunal.
(2) An appeal under this Schedule shall be filed within a period
of 30days from the date on which a copy of the order or decision which is
being appealed against is made, or deemed to have been made by the Service and
it shall be in such form and be accompanied by such fees as may be prescribed
provided that the Tribunal may entertain an appeal after the expiry of the said
30days if it is satisfied that there was sufficient cause for the delay.
(Underlining for emphasis)
In addition to the above provisions, paragraph 15(7)(c)
of the Fifth Schedule to the FIRS Act, 2007 states:
At the hearing of an appeal, if the
representative of the Service proves to the satisfaction of the Tribunal
hearing the appeal in the first instance that-
(c) it is expedient to require the appellant to pay an
amount as security for prosecuting the appeal, the tribunal may adjourn the
hearing of the appeal to any subsequent day or order the appellant to deposit
with the service, before the day of the adjourned hearing, an amount, on
account of the tax charged by the assessment under appeal, equal to the tax
charged upon the appellant for the preceding year of assessment or one half of
the tax charged by the assessment under appeal, which ever is lesser plus a sum
equal to ten percent of the said deposit, and if the appellant fails to
comply with the order, the assessment against which he has appealed shall be
confirmed and the appellant shall have no right to appeal with respect to that
assessment.
(Underlining for emphasis)
A community reading of the provision of paragraphs 13(1)
and (2); 15(7)(c) of the Fifth Schedule to the FIRS Act, 2007 and Order 3 Rule
6(a) of the 2021 TAT rules have limited an aggrieved person’s right to Appeal
As Of Right to 30 days from the date of the occurrence of the decision
appealed against and Payment of 50% of the disputed sum as security or payment
of
50% of the tax paid the previous year plus 10
percent mark-up as security before such appeal can be entertained by the Tribunal.
While Paragraph 15(7)(c) of the FIRS Act requires the
tax authority to first prove to the satisfaction of the tribunal that it is
expedient for the appellant to pay the security, Order 3 Rules 6(a) of the TAT
Rules, 2021 does not make provisions for such.
It is clear that as it is, the Tribunal is now at
liberty to pick and choose whether to order a blanket payment of 50% of the
disputed sums as security contained in the 2021 TAT Rules or to order payment
of
50% of the tax paid the previous year plus 10
percent mark-up as security contained in the
FIRS Act.
This concerns played out in the recent cases of Multi
Choice Nigeria V FIRS[5]
where
the Nigerian subsidiary filed an appeal
against an alleged tax liability of N1.8 trillion issued to it by the FIRS, and on 24
August 2021, the Tribunal relying on Paragraph 15 (7) Fifth Schedule
of the FIRS Establishment Act, directed Multi Choice
Nigeria to pay a security deposit for its appeal to be heard. The FIRS
interpreted the ruling to mean that MultiChoice Nigeria should pay N900 billion
(50% of the
disputed assessment) before the
appeal will be heard. The FIRS was relying on the provisions of the 2021 TAT
Rules.
At the
hearing on 23 September 2021, Multi Choice Nigeria argued that it had complied
with the tribunal’s ruling and the provisions of
paragraph
15 (7) of the FIRS Act via the payment of N8 billion in two tranches. The FIRS, however, urged the Tribunal to discontinue the hearing of the appeal
and rule against the appellant having not
complied
with the directive to pay N900 billion i.e 50% of the N1.8 trillion tax assessment
for the years under review.
The TAT
on 20 October 2021 dismissed the FIRS’ objection to the appeal thus;
“It
is obvious that the appellant has not only complied with the orders of this
court but has also provided sufficient evidence before this tribunal that they
are credible and ready to pursue this matter with all sense of responsibility
and seriousness. It is only fair and just that they be given the privilege to
do so,” ruled the tribunal.
The Tribunal herein rightly disagreed with the FIRS position that Multi Choice Nigeria was required to pay half of the assessment for all the years under review, and ruled that the FIRS Act explicitly says the “preceding year of assessment”, not “years.”
However, the same Tribunal twisted in its ruling
delivered in Abuja on 26 October 2021, where it dismissed the appeal of MultiChoice
Africa Holdings V. FIRS against
an alleged $342million Value Added Tax bill given to it by the FIRS[6]. The Tribunal upheld the objection of the FIRS to the appeal of
Multi Choice Africa Holdings, that the company
had neglected to comply with Order 3 Rule 6 of the TAT (Procedure) Rules, 2021 i.e. payment of 50% of $342million. This to my mind
is nothing short of closing the doors of justice against aggrieved parties. The
application of the onerous blanket condition to provide 50% of the disputed sum
before an aggrieved party can approach the Tribunal is questionable as it will
continue to prevent easy access to justice.
What comes to mind is whether the Minister of Finance,
Budget and National Planning in exercise of her powers under paragraph 21 of
the Fifth Schedule to the FIRS Act 2007, can by a secondary legislation i.e. the
TAT Rules (2021), alter the provisions contained in an Act made by the National
Assembly[7].
See AFRIBANK (NIG) PLC V. AKWARA (2006) LPELR-199 (SC); Per Ikechi
Francis Ogbuagu, JSC (Pp 41 Paras A-C).
"Rules of Court, are not as sacrosanct as statutory provisions of law. A rule of court, cannot confer jurisdiction. It only regulates the practice of the Court in the exercise of a power derived aliunde (from another source or from elsewhere) and does not confer power. See Ogunremi v. Dada (1962) 2 SCNLR 417; (1962) 1 ANLR 663 and Cropper v. Smith (1883) 24 Ch. D. 305- per Brett, M.R Rules of Court, cannot override, Statutory provisions of the law. See Alhaji Edun v. Odun Community, Ado Family etc. (1980) 8-11 SC 103 at 124 - 127. Therefore, neither Practice Directions nor Rules of Court, can override Statutory Provisions."
Also, it is trite law that the court will always frown at any provision that tends to restrain/ abridge or inhibit a party’s rights to freely access the court to seek redress and all rules of court ought to aid in the cause of justice and not otherwise. See ASIEGBU V. ACCESS BANK & ORS 2016(LPELR-41056) CA:
"The rules of Court are made as aids to the Courts to help the course of justice and not masters of the Court. For the Courts to read the rules in the absolute without recourse to the justice of the cause will be making the Courts slavish to the rules and this clearly is not the reason for the enactment of the rules of Court. See Oduyemi v. Agbede (supra); UTC Ltd v. Pamotei (supra). "Per HELEN MORONKEJI OGUNWUMIJU, JCA (Pp 9 -10 Paras F- B)"
The
dissenting opinion of Aderemi, J.S.C. in OJUKWU V. YAR’ADUA (2009) 12 NWLR
(PT. 1154) 50 AT 192D-G further buttress my
position on access to court. His Lordship held:
“Faced
with the materials before us, I regret to say that to dismiss this appeal is to forever block the appellant from accessing
justice. An inhibited accessibility by a citizen to [a] court of law to
ventilate [his/her] real or imagined grievance is a hallmark of determining the
degree of civilization of a country. Let is be said that the quest for
justice is insatiable when it is realised that the great phenomenon called
JUSTICE is not a one way traffic; not even a two way traffic; I beg to say that
a court of law which is also a court of justice must always ensure that JUSTICE
flowing from its sanctuary which, of course, must be in accordance with laws of
the land, is not only for the plaintiff (the complainant) not even only for the
defendant (the person complained against) but also for the larger society whose
psyche is always affected, one way or the other, by any judicial pronouncement[8].”
(Underlining for emphasis.)
The Supreme Court reiterated In SPDC v.
Agbara (2015) LPELR-25987(SC), the Supreme Court thus:
“It
is settled law that a court of law will not allow the provisions of an
enactment to be read in such a way to deny access to courts by citizens. Thus,
it is not the intention of the law to deny any litigant access to justice.”
(Underlining for emphasis.)
Flowing from the above, the mandatory provisions of
Order 3(6)(a) through the use of the word ‘Shall’ will not only restrict
the right of an aggrieved party to access the court, but also has the tendency
of stifling the businesses of going concerns who are required to cough out as
security, 50% of the sums sought to be challenged before their case can be
heard.
There is need for the immediate amendment of the
provisions of Order 3(6)(a) of the TAT Rules, 2021 in order to guarantee the
rights of aggrieved parties to access the court without let or hindrance.
The TAT must also in a bid to manifestly dispense justice,
stop the charade of the biblical unbeliever who is tossed around by every wind
of doctrine.
[1] Olusegun
MABAWONKU
[2] By
implication, tax disputes arising from the provisions/application of the
Finance Acts.
[3] Paragraph
21 of the Fifth Schedule to the Federal Inland Revenue Service (Establishment)
Act, 2007
[4] Order 1
Rule 2 of the Tax Appeal Tribunal (Procedure) Rules, 2021.
[7] paragraph 15(7)(c) of the Fifth Schedule to the Federal
Inland Revenue Service (Establishment Act) 2007
