BREAKING: Tax Debtors Jubilate As Federal High Court Deletes Laws Denying Right Of Appeal (DETAILS)

BREAKING: Tax Debtors Jubilate As Federal High Court Deletes Laws Denying Right Of Appeal (DETAILS)

On Thursday, a Federal High Court in Abuja invalidated certain provisions that curtailed the right of appeal for tax debtors.

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).

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In the judgment delivered by Justice James Omotosho, it was declared that these provisions were unconstitutional as they restricted the constitutionally provided right of appeal.

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The first provision annulled by the court was Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules (2021). This rule mandated an aggrieved person challenging the tax charged by the Federal Inland Revenue Service (FIRS) or any relevant tax authority to pay 50% of the disputed amount before the appeal could be heard.

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The second provision affected was Order V Rule 3 of the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions (2021). It required that a person intending to challenge an assessment must pay half of the assessed amount into an interest-yielding account of the Federal High Court.

The third provision was Order V Rule 1 of the Federal High Court of Nigeria (Tax Appeals) Rules (2022). It mandated that when an appellant is appealing against the decision of the Tax Appeal Tribunal, the sum contained in the decision must be deposited in an interest-yielding account maintained by the Chief Registrar of the Federal High Court.

The legal challenge was filed by a former President of the Nigerian Bar Association (NBA), Joseph Daudu, SAN, against the Minister of Finance, Budget and National Planning, the Chief Judge of the Federal High Court, and the Attorney General of the Federation (AGF). Daudu argued that these provisions were unfair, unlawful, and violated the right to appeal.

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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.

Consequently, the judge declared the provisions of Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules, 2021 as “unconstitutional, null, and void.” He affirmed that these provisions are contrary to 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.

Furthermore, the judge declared that the provisions of Order V Rule 3 of the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions, 2021 are “unconstitutional, null, and void.” He issued an order to strike down (delete) the provisions of Paragraph V Rule 3 of the Federal High Court (Federal Inland Revenue Service) Practice Directions 2021, deeming them unconstitutional and exceeding the powers of the 2nd respondent (the Chief Judge of the Federal High Court) to issue practice directions.

Additionally, the judge ordered the striking down (deleting) of the provisions of Order V Rule 1 of the Federal High Court of Nigeria (Tax Appeals) Rules 2022, considering them unconstitutional and beyond the powers of the 2nd respondent to issue practice directions and Rules of court.

Concluding, the judge directed 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 exceeding the powers of the 1st respondent (the Minister of Finance) to make Rules prescribing the procedure and conduct of appeals before the tribunal.