The 2nd and 3rd Respondents filed tax appeals before the 1st respondent, seeking orders directing the 4th respondent to re-assess their 2008 Petroleum Profits Tax (“PPT”) liability. The applicant was joined as a party and challenged the jurisdiction of the 1st Respondent to determine the tax appeals. Alternatively, the Applicant sought an order striking it out as a party to the tax appeals.
The 1st Respondent dismissed the objection and granted the alternative prayer. The Applicant applied to the Federal High Court for an order of certiorari to quash the decision of the 1st Respondent and an order of prohibition to prevent the Respondents from continuing the proceedings.
One of the issues as formulated by the Respondents for the determination of the Federal High Court and was:
“Whether the 1st respondent has jurisdiction to determine the tax appeal instituted by the 2nd and 3rd respondent against the 4th respondent’s refusal to amend their 2008 to 2010 Petroleum Profits Tax (PPT) and 2007 to 2010 Education Tax (EDT) Assessments?”
In arguing this issue, the Applicant’s counsel contended that by virtue of the provisions of section 251(1)(a), (b), (n) and (r) of the 1999 Constitution, matters or disputes relating to taxation are within the exclusive jurisdiction of the Federal High Court. He argued that any other body exercising adjudicatory powers lacked the jurisdictional competence to entertain any suit on such matters.
The Applicant’s counsel submitted that the provisions of Paragraph 11(1) and (2) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act (“FIRS Act”) which confers adjudicatory powers on the 1st Respondent over matters and disputes in respect of taxation violate the express provisions of section 251(1) of the 1999 Constitution and are therefore void. Counsel relied on the cases of Stabilini Visinoni Ltd. v. FBIR (2009) 2 CLRN 269 and Cadbury (Nig) Plc v. FBIR (2010) 1 CLRN 215.
Counsel to the 2nd and 3rd Respondents countered that the decisions in Stabilini Visinoni Ltd v. FBIR (supra) and Cadbury (Nig) Plc v. FBIR (supra) are distinguishable as they were based on the provisions of Paragraph 24(1), Second Schedule of the Value Added Tax (VAT) Act 1993 which had placed the VAT Tribunal and the Federal High Court on equal footing as courts of coordinate jurisdiction by allowing appeals from the VAT Tribunal to go directly to the Court of Appeal. He argued that this was a usurpation of the powers of the Federal High Court as granted in section 251(1) of the 1999 Constitution and was therefore void.
Counsel submitted that the FIRS Act is different as it established the 1st Respondent as an administrative body through which taxpayers could attempt to resolve their disputes with the 4th Respondent before appealing to the Federal High Court. She submitted that the establishment of the 1st Respondent and the subsequent powers conferred on it do not derogate from the jurisdiction of the Federal High Court but rather serves as a condition precedent to bringing an action before the Federal High Court.
The Federal High Court held that the 1st Respondent is not a court of law, but an administrative tribunal established by statute to resolve taxation disputes between taxpayers and the 4th Respondent. The court stated as follows:
“Even if the Tax Appeal Tribunal is manned by legal minds it does not enjoy the status of Court. It is like a retired justice of Supreme Court heading an arbitration. It does not elevate him to any status more than an arbitral tribunal.
Therefore, this Court is unable to agree with the applicant that the 1st respondent is acting in excess of jurisdiction and that only the Federal High Court has exclusive jurisdiction. Apart from the fact that Tax Appeal Tribunal is not a Court, it is subject to appeal to the Federal High Court and is indeed supervised by the Federal High Court through judicial review as in the instant case. It is not like the Value Added Tax Tribunal that had triple jumped its decision to the Court of Appeal.
Let me also say this Court prefers to follow the binding decision of Belgore JSC (as he then was) Eguamweiso v. Amaghizemwei (supra) and the equally persuasive decision of Auta C.J. in Ocean & Oil Ltd v. FBIR (supra). This Court so follow the line of decision.”
Editor’s Note: The above decision appears to contradict the earlier findings of the Federal High Court coram Ademola, J in TSKJII Const. Int. Soc. Uni. LDA v. FIRS (2014) 4 CLRN 220 where the court held that the 1st Respondent lacked constitutional vires to hear and determine tax matters which is the exclusive preserve of the Federal High Court. It will be interesting to see the direction that the Court of Appeal takes if either of both of these decisions are appealed. Until then…
Counsel:
Igonikon Whyte with Caleb Oghenetega for the 2nd and 3rd respondents
This summary is fully reported at (2014) 4 CLRN
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