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N50bn tax case gets messy as RIRS initiates contempt proceedings with jail risk against NDDC top 4

Lagos State consumption tax to hit smaller hoteliers, restaurants hardest

The N50bn tax case between the Rivers State Internal Revenue Service (RIRS) and the Niger Delta Development Commission (NDDC) seems to have got messy as contempt proceedings have begun in Port Harcourt to commit top members of the interventionist agency to jail for contempt of court.

The NDDC was accused of unsealing its premises without court order whereas the sealing was done with court order over N50bn tax demand. The initiation of contempt proceedings confirmed to BusinessDay by the RIRS executive chairman, Adoage Norteh, is part of Suit No. OHC23//2019: RSBIR vs NDDC, Prof. Nelson Brambaita, acting managing director, Chris Amadi (acting executive director finance and administration), Adjogbe Samuel (acting executive director project), and Kaltungo Moljengo, director of legal services.

Contempt breaches do not carry fine but jail sentences. This may become an issue in a case between a PDP state and the APC-controlled federal agency. There is already feisty relationship between the Rivers State government and the NDDC, but the executive chairman has always appealed to observers to divorce the tax matter from politics.

Details available to BusinessDay indicated that following an application by the Rivers State Board of Internal Revenue (RSBIR), the High Court of Rivers State has granted the service of Form 49, order of committal on Brambaifa, the Ag MD; Chris Amadi (acting executive  director, finance and administration); Adjogbe Samuel (acting executive director, project); and Kaltungo Moljengo (director, legal service), all of NDDC by substituted service over alleged disobedience of the order of the court.

According to the affidavit filed by RSBIR earlier, Form 48, notice of consequence of disobedience of order of the court had been served on the Acting MD and the other three officials of NDDC and the events that gave rise to the contempt proceeding are as follows.

According to findings, on the 17th of April, 2019, the court ordered that NDDC is indebted to RSBIS to the tune of N50bn being outstanding tax liability owed the Government of Rivers State by NDDC with respect to PAYE, Withholding Tax and other taxes allegedly unpaid for the period, 2012 to 2017.

The court also ordered the issuance of a warrant authorising RSBIR to seal any land and or any other property belonging to NDDC in order to recover the said sum of N50bn owed by NDDC, it was gathered. It further ordered NDDC to pay the sum of N20m as cost incidental to the recovery of the amount owed.

On the 23rd of April, 2019, RSBIR executed the order and sealed three property in Port Harcourt belonging to NDDC. On the 24th of same month, NDDC was said to have had a meeting with RSBIR and after the meeting wrote a letter to RSBIR requesting that their property should be unsealed by RSBIR.

Sources said after the said letter meetings were held by NDDC and RSBIR in the course of which NDDC allegedly agreed to make payment on account as a condition for unsealing their premises and through their tax consultant and acting MD allegedly offered an amount that was accepted by RSBIR, after which they offered to make payment shortly.

Te source added that rather than “make payment on account as agreed, NDDC filed a ‘Notice of Appeal’ at the Court of Appeal on the 26th of April 2019 challenging the decision that it is indebted to RSBIR and on the 30th of April 2019 also filed at the Court of Appeal a motion to stay the execution of the said Order that has been executed since the 23rd of April 2019 and to restrain RSBIR from attempting to seal or sealing the premises of NDDC pending the determination of the Appeal.

“On the 6th of May 2019, without an order of court, NDDC unsealed all three premises which were sealed by RSBIR, repossessed them and put lots of armed mobile policemen in front of their premises.”

As a result of the unsealing of the premises without an order of court, it was gathered, Form 48 (Notice of consequence of disobedience to order of court) was served on the Acting MD and the other three officials of NDDC.

Presently, it was further gathered, there are three motions filed by the NDDC that are pending at the Court of Appeal and one pending at the High Court with respect to the contempt proceeding. Interestingly, in all these applications NDDC is said to have said nothing about the fact that the order had actually been executed by RSBIR and that it re-opened the premises without a court order.

Sources in NDDC did not respond to inquiries at the time of filing this report.