In a significant ruling, a Federal High Court in Abuja has nullified certain provisions that previously denied tax debtors the right to appeal. 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 landmark judgement, emphasized that these provisions were unconstitutional as they impeded the constitutionally granted right of appeal.
The first provision struck down by the court was Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules (2021). It mandated that an aggrieved person challenging the tax charged by the Federal Inland Revenue Service (FIRS) or any relevant tax authority must pay 50% of the disputed amount before their 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), which required individuals intending to challenge an assessment to pay half of the assessed amount into an interest-yielding account of the Federal High Court.
The third provision, Order V Rule 1 of the Federal High Court of Nigeria (Tax Appeals) Rules (2022), stipulated that when appealing against the decision of the Tax Appeal Tribunal, the appellant must deposit the sum contained in the decision in an interest-yielding account maintained by the Chief Registrar of the Federal High Court.
The suit challenging these provisions was filed by former President of the Nigerian Bar Association (NBA), Joseph Daudu, SAN, against the Minister of Finance, Budget, and National Planning as the first respondent regarding the Tax Appeal Tribunal (Procedure) Rules (2021). Daudu argued that the provisions were unfair, unlawful, and contravened the right to appeal.
Delivering the judgment, Justice Omotosho firmly stated that while the minister is empowered to make rules for the conduct of appeal, he cannot construct an embargo to the enjoyment of the right to appeal of any appellant. He emphasized that the right to appeal is a constitutional right, and no one should take it away through the making of subsidiary legislation.
Justice Omotosho further explained that the impugned provisions were tailored to favour the Federal Inland Revenue Service without any regard for the interest of a tax debtor. He highlighted that these provisions automatically deprived a tax debtor of the right of appeal if they were unable to afford to deposit the entire assessed sum of money.
He stressed that the court, empowered by the Constitution, would ensure that justice is served to all parties, irrespective of their status. The judge asserted that the court would not allow an unjust provision to undermine the constitutional rights of the applicant.
In conclusion, Justice Omotosho declared the provisions of Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules, 2021, as “unconstitutional, null, and void.”
