Nov. 9, 2023

A Federal High Court sitting in Abuja has struck down some “offending provisions” which takes away the right of appeal of a tax debtor.

Specifically, the affected provisions include the Tax Appeal Tribunal (Procedure) Rules ( 2021), the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions (2021) and the Federal High Court of Nigeria (Tax Appeals) Rules (2022).

Justice James Omotosho, in a judgment, held that the provisions were unconstitutional as they constrained the constitutionally provided right of appeal.

The first provision voided by the court was Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules (2021).

It prescribes that an aggrieved person, challenging the tax charged by the Federal Inland Revenue Service (FIRS) or any relevant tax authority, shall pay 50 per cent of the disputed amount into any account so designated by the Tax Appeals Tribunal before such appeal could be heard.

The second provision affected was Order V Rule 3 of the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions (2021).

It prescribes that where a person intends to challenge an assessment served on him or her, he or she shall pay half of the assessed amount into an interest yielding account of the Federal High Court, pending the determination of the application/ proceedings.

The third provision was Order V Rule 1 of the Federal High Court of Nigeria (Tax Appeals) Rules (2022).

It prescribes that where an appellant is appealing against the decision of the Tax Appeal Tribunal, the sum contained in the decision shall be deposited in an interest yielding account maintained by the Chief Registrar of the Federal High Court.

A former President, Nigerian Bar Association (NBA), Joseph Daudu, SAN, had filed the suit marked: FHC/ABJ/CS/12/2022.

Daudu, who argued, among others, that the provisions were unfair, unlawful and a violation of the right to appeal, sued the Minister of Finance, Budget and National Planning, who made the Tax Appeal Tribunal (Procedure) Rules (2021) as 1st respondent.

The applicant also joined the Chief Judge of the Federal High Court, who made the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions (2021) and the Federal High Court of Nigeria (Tax Appeals) Rules (2022), and the Attorney General of the Federation (AGF) as 2nd and 3rd respondents in the case.

Delivering the judgment, Justice Omotosho said: “Even though the 1st respondent (the minister) is empowered to make rules for the conduct of appeal, he is not expected to construct an embargo to the enjoyment of the right to appeal of any appellant.

“The right to appeal is a constitutional right and the 1st respondent cannot take away such right through the making of a subsidiary legislation.

“The law is trite that where any law or subsidiary legislation contravenes the provision of the Constitution, it shall be declared void to the extent of its inconsistency.

“The said provisions being challenged by the applicant were made to favour the Federal Inland Revenue Service without any attempt to balance the interest of a tax debtor.

“For a tax debtor, who is unable to afford to deposit the entire assessed sum of money, he is automatically deprived his right of appeal.”

According to him, this court, as a court of justice, will ensure that justice is done to all parties regardless of their status.

“This court by virtue of Section 6(6)(b) of the Constitution is empowered to determine issues between government and persons,” he said.

The judge said that the court would not allow an unjust provision to cripple the constitutional rights of the applicant.

“In final analysis, I therefore do not hesitate to strike down the offending provisions which in the opinion of this court substantially takes away the right of appeal of a tax debtor such as the applicant,” Justice Omotosho said.

The judge, therefore, proceeded to declare the provisions of Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules, 2021 as “unconstitutional, null and void.

He declared that the provisions is also contrary to the provisions of Section 36(1) and (2), Section 6(6) (a) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) and the doctrine of separation of powers.”

He also declared that the provisions of Order V Rule 3 of the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions, 2021 “is unconstitutional, null and void.

He issued an order striking down (deleting) the provisions of Paragraph V Rule 3 of the Federal High Court (Federal inland Revenue Service) Practice Directions 2021, or any other similar provision therein, for being unconstitutional and in excess of the powers of the 2nd respondent (the Chief Judge of the Federal High Court) to issue practice directions.

He also ordered the striking down (deleting) of the provisions of Order V Rule 1 of the Federal High Court of Nigeria (Tax Appeals) Rules 2022, for being unconstitutional and in excess of the powers of the 2nd respondent to issue practice directions and Rules of court.

The judge thereafter ordered the striking down (deleting) of the provisions of Order III Rule 6 (a) of the Tax Appeal Tribunal (Procedure) Rules, 2021 for being unconstitutional, null and void and in excess of the powers of the 1st respondent (the Minister of Finance) to make Rules prescribing the procedure and conduct of appeals before the tribunal.(NAN)