By Michael Okuwobi
INTRODUCTION
Jurisdiction is an issue of identity crisis, it is a concept often demarcating law’s territorial scope and thus the boundaries of various courts. There is perhaps no word used in legal language, precise meaning of which is less authoritatively determined than jurisdiction. It is elementary law that jurisdiction is the life wire, the bedrock and foundation of all judicial and even quasi-judicial proceedings. This paper is set to critically examine the jurisdiction of tax cases in Nigeria, from a historical standpoint, tracing the so many controversies it birthed and the establishment of the Tax Appeal Tribunal.
Overtime, the issue of jurisdiction with respect to tax cases have generated numerous controversies. The reason is not far-fetched. Section 251 (2) of the 1999 Constitution of the Federal Republic of Nigeria (hereinafter referred to as CFRN) confers exclusive jurisdiction on matters relating to the adjudication of tax disputes on the Federal High Court “Notwithstanding any thing to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an act of the national assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters relating to the revenue of the government, issues connected with or pertaining to taxation of companies and other bodies established or carrying on business in Nigeria and all other persons subject to federal taxation.[1] The Federal High Court which was formerly known as the Federal Revenue Court but renamed the former pursuant to the provisions of Section 228(1) and Section 230(2) of the 1979 Constitution was vested with the exclusive jurisdiction to adjudicate exclusively on tax matters. Consequently, the 1999 constitution retained the exclusive jurisdiction conferred upon the FHC by the preceding constitution. In spite of the FHC’s exclusive jurisdiction over tax disputes, several tax statutes earlier provided for administrative tribunals to deal with tax disputes. For instance, the Companies Income Tax Act (CITA) and the Personal Income Tax Act in 1961 established the Federal Board of Inland Revenue (FBIR), as well as the Body of Commissioners.[2] Subsequently, the Federal Military Government passed the Value Added Tax Decree which established the Value Added Tax Tribunal set up under Section 20 of the VAT Tribunal Act and paragraph 24(1), 2nd Schedule to the VAT Act of 1993.[3] These legislations respectively provided that a taxable person who is aggrieved by an assessment by the Federal Board of Inland Revenue could appeal to the Body of Appeal Commissioners or the Value Added Tax Tribunal.[4] The VAT Act further provided that an appeal from the VAT Tribunal should be made to the Federal Court of Appeal. Conspicuously, The VAT Tribunal was equated with the Federal High Court, since an appeal leapfrogs to the Court of Appeal instead of first to the Federal High Court, before the Court of Appeal. This was an affront to the jurisdiction of the FHC and foreseeably birthed controversies.
The Question of Inconsistency
Consequent upon the establishment of the VAT Tribunal, disputes relating to the jurisdiction of the VAT Tribunal and the Body of Commissioner came to the fore where it was contended that the jurisdiction vested in the VAT Tribunal is in conflict with the exclusive jurisdiction of the Federal High Court over Tax matters. Plethora of cases began to arise that questioned the jurisdiction of the VAT tribunal as against the exclusive jurisdiction of the Federal High Court on issues arising from tax disputes. Notably, in the case of Stabilini Vision v. FBIR[5], the respondent instituted an action against the appellant at the Value Added Tax Tribunal claiming that the appellant failed to render appropriate VAT returns. The appellant entered appearance and challenged the Jurisdiction of the VAT Tribunal in view of Section 251 of the constitution which vests exclusive jurisdiction over Tax matters on the Federal High Court. The Court of Appeal in its judgment held that Section 20 of the VAT Act is inconsistent with the constitution and therefore cannot stand as the VAT Tribunal has no jurisdiction to entertain the action. Also, the Court of Appeal which heard an appeal directly from the VAT Tribunal in the case of Cadbury Nig Plc v. FBIR[6] affirmed the position in the case of Stabilini Vision v. FBIR[7] on jurisdiction of the VAT Tribunal vis-à-vis that of the Federal High Court, holding that Section 20 of the VAT Act is a nullity in view of its inconsistency with the provision of Section 251 of the constitution of the federal republic of Nigeria 1999. The court arrived as this judgments interpreting stricto-sensu the provisions of Section 1(3) of CFRN 1999 (the rule of inconsistency), which provides that “if any other law is inconsistent with the provisions of this constitution, this constitution shall prevail, and that other law shall to the extent of the inconsistency be void.”[8]
Arguing the case out, the respondent’s lawyer advanced that the VAT Tribunal was an administrative tribunal merely set up to settle tax disputes. However, the Judge in his dictum noted that the VAT Tribunal cannot be tagged an administrative tribunal since appeals from it did not lie to the FHC but to the Court of Appeal, thereby usurping the jurisdiction of the FHC.
THE BIRTH OF A RECOGNIZED ADMINISTRATIVE TRIBUNAL
Following the very contumacious and controversial issue of the VAT Tribunal’s jurisdiction to settle tax disputes, the National Assembly in 2007 enacted the Federal Inland Revenue Service (Establishment) Act (FIRSEA). Section 59(1) of the Act established the TAX APPEAL TRIBUNAL (TAT).[9] The TAT formally took off pursuant to the Tax Appeal Tribunals Establishment Order 2009 issued by the Minister of Finance, Federal Republic of Nigeria as published in the National Gazette No 296, Vol. 96 of 2nd December, 2009. By this enactment, TAT replaces the former Body of Appeal Commissioners (BAC) and Value Added Tax Tribunal which indubitably sought to usurp the jurisdiction of the FHC. A more expansive and purposive power to settle disputes arising from the operations of the Act and other legislations administered by the Federal Inland Revenue Service was set out in the First Schedule to the Act. The disputes within the powers of the Tax Appeal Tribunal includes; companies income tax, petroleum profits tax, personal income tax, capital gains tax, value added tax, stamp duties and other taxes and levies provided in the Taxes and Levies (Approved List for Collection) Act, as well as proclamations, regulations by the government.
Pursuant to the Tax Appeal Tribunals Establishment Order 2009[10], TAT is established in 8 states to cover the six geo-political zones. The states are: Abuja, Lagos, Ibadan, Benin, Enugu, Kaduna, Jos and Bauchi and a coordinating secretariat located in Abuja.
Upon the creation of the Tax Appeal Tribunal, Tax practitioners began to become apprehensive as to whether TAT would suffer the same fate as the extinct Value Added Tax Tribunal. Funnily enough, their apprehension began to come to fore as the issue of jurisdiction resurfaced quite speedily. In spite of the provisions of the fifth schedule to the FIRS Act, particularly Sections 17 and 20 thereof, the arguments on the issue of jurisdiction continued as there were conflicting decisions from the Federal High Court as to the whether or not the TAT has jurisdiction over tax disputes. The issue was however laid to rest in a plethora of cases affirming the jurisdiction of TAT.
In the case of SNEPCO v. FIRS[11] stated the procedure for an aggrieved taxpayer to appeal assessments issued by the FIRS under the FIRS Act. It observed that “the procedure for resolving claims and objections such as in the instant matter are spelt out. When an assessment is made and the party is not satisfied, it can serve a Notice of Objection with the FIRS. It can also file a Notice of Refusal to amend the assessment as desired where it disagrees with the FIRS. The party may also then appeal against the assessment to the Tax Appeal Tribunal. If the party is dissatisfied with the decision of the Tax Appeal Tribunal, then it can approach the Federal High Court, The Court of Appeal and the Supreme Court.” The court then further stated that the Tax Appeal Tribunal is just an administrative channel for the resolution of Tax disputes before resolution to Litigation and does not in any way conflict with the exclusive jurisdiction of the FHC.
It is instructive to note that The Court of Appeal in 2017 in a similar case relating to federal taxes FIRS v. TSKJ Construcoes internatcional Sociadade Unipersoal[12] held that the TAT is a condition precedent to the jurisdiction of the Federal High Court to entertain matters relating to taxation. Relying on the Supreme Court case of Eguamwense v. Amaghizemwen[13], the Court held that where a statute prescribes a legal line of action for the determination of an issue, the aggrieved party must exhaust all the remedies in that law before going to court. It flows therefore that TAT is empowered as a court of first instance to hear disputes arising from the tax assessment. Justice Buba in the case above noted that TAT was validly created and that its jurisdiction does not in any way conflict with the jurisdiction of the FHC. He further noted that unlike the extinct VAT Tribunal, the Tax Appeal Tribunal Establishment Order 2009 does not propose to supplant, usurp or sidestep the Section 251 of the 1999 Constitution. TAT is just a mere precursor to initiating an action at the FHC.
Conclusively, in laying the case to rest, the learned justice noted that the legislature was right to have added an appellate jurisdiction to the FHC in accordance with Section 28 of the Federal High Court Act which stated thus: “The Court shall have appellate jurisdiction to hear and determine appeals from – (a) the decisions of Appeal Commissioners established under the Companies Income Tax Act and the Personal Income Tax Act in so far as applicable as Federal Law”.[14] Hence, the Federal High Court may exercise appellate jurisdiction over tax cases arising from the Tax Appeal Tribunal.
Michael Okuwobi is a student of the Faculty of Law, Lagos State University.
[1] 1999 Constitution of The Federal Republic of Nigeria, 2011 As Amended.
[2] The Company Income Tax Act (CITA) 1961
[3] Section 20 of the VAT Tribunal Act.
[4] 2nd Schedule to the Value Added Tax Act of 1993
[5] (2009) 13 NWLR (pt. 1157) 200
[6] (2010) 2 NWLR (Pt. 1179) 561
[7] Ibid.
[8] Section 1(3) of the 1999 Constitution of the Federal Republic of Nigeria, 2011 as Amended.
[9] Section 59(1) of The Federal Inland Revenue Service Establishment Act (FIRSEA).
[10] Tax Appeal Tribunal (Establishment) Order, 2009.
[11] Unreported appeal No. CA/A/208/2012; judgment delivered on 31st of August, 2016.
[12] (2017) JELR 34288 (CA)
[13] (1993) JELR 43245 (SC)
[14] Federal High Court Act, Cap F12, LFN 2004.
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