AN APPRAISAL OF THE JURISDICTION OF THE TAX APPEAL TRIBUNAL IN NIGERIA

ABSTRACT
Tax disputes are inevitable. That being the case, the only reasonable option is to find a way of resolving the disputes effectively and expediently. This is the major reason why this research brought to lime light the jurisdiction of the Tax Appeal Tribunal (TAT) in the settlement of Tax disputes in Nigeria. This research explored the historical development of the tax Appeal system in Nigeria, the establishment of the TAT under the Federal Inland Revenue Service (Establishment) Act, 2007 which sought to provide a good frame work for cheaper and timely resolution of tax disputes. This research explored the composition and membership of TAT, Parties before the TAT, modes of application at the TAT and legal capacity to sue and be sued at the TAT. Also discussed in this research are the Body of Appeal Commissioners (BAC), Appeals to the Federal High Court, Value Added Tax-Tribunal (VAT-T) and their similarities and differences between the TAT. Furthermore, this research examined the comparative analysis of Tax Appeal Tribunal Procedures between Nigeria and similar jurisdictions. Readers of this work will be exposed to good number of lacuna which have been identified here. Chiefly among them is the very enormous power of the Minister of Finance to solely appoint all the personnel of the TAT without supervision from any organ of Government, problem of Appeals against the decision of the TAT to the Federal High Court and conflicts in respect of who to make rules of practice and procedure of the TAT under the FIRS(Establishment) Act 2007. The methodology used in this research is doctrinal method of research and the approach was narrative and descriptive. The researcher obtained his data from primary data sources such as statutes and case laws and secondary sources such as journals, books , newspapers, articles and seminar papers. In arriving at conclusion, bearing in mind the problems which affect the easy operations of the TAT, the researcher has made some practical recommendations to review these problems. Chiefly among them are, that the enormous powers vested in the Minister of Finance to solely appoint Tax Appeal Commissioners and their staff should be amended by the National Assembly, amendment of the FIRS(Establishment) Act 2007 in paragraph 17 of Fifth Schedule to allow Appeals on both point of law and of facts to the Federal High Court. Also the researcher recommended that the FIRSEA 2007 should be amended to allow the Tribunal makes its rules of practice and procedures. The views expressed here would be useful to Tax administrators and practitioners
TABLE OF CONTENTS
Title ………………………………………………………………………………….i
Approval…. …………………………………………………………………………ii
certification………………………………………………………………………….iii
Dedication…………………………………………………………………………...iv
Acknowledgements………………………………………………………………….v
Abstract……………………………………………………………………………...vi
Table of cases xi
Tables statutes xii
List of abbreviations xiii

CHAPTER ONE: INTRODUCTION
1.1Background of the study ......................................................................................1
1.2 statement of problems …………………………………………………………..3
1.3 purpose of the study……………………………………………………………..4
1.4 scope of the study ……………………………………………………………….5
1.5 significance of the study…………………………………………………………5
1.6 Research methodology …………………………………………………………..6
1.7 Organisational layout…………………………………………………………….6
1.8 Definition of Terms………………………………………………………………7
1.9 Literature Review………………………………………………………………...7

CHAPTER TWO: THE ESTABLISHMENT, COMPOSITION, PARTIES AND THE LEGAL TO SUE AND BE SUED THE TAX APPEAL TRIBUNAL
2.1 Establishment of the Tax Appeal Tribunal……………………………………..10
2.1.1 Composition of the Tax Appeal Tribunal……………………………………..11
2.1.2 The qualification for appointment as a Tax Appeal Commissioners…………12
2.1.3 Terms of Office………………………………………………………………..12
2.1.4 Resignation and Removal of a Tax Appeal Commissioners………………….13
2.2 Parties before Tax Appeal Tribunal……………………………………………..14
2.2.1 Proper Parties………………………………………………………………….15
2.2.2 Desirable Parties……………………………………………………………….15
2.2.3 Necessary Parties………………………………………………………………15
2.2.4 Nominal Parties………………………………………………………………..16
2.3 The legal capacity to sue and be at the TAT…………………………………….17
2.3.1 Individual………………………………………………………………………17
2.3.2 Corporate Bodies………………………………………………………………17
2.3.3 Partnership / Firms…………………………………………………………….19
2.3.4 Estate of Decease persons…………………………………………………….20
2.3.5 Infants / Persons of Unsound mind……………………………………………20

CHAPTER THREE: REVIEW OF THE HISTORICAL DEVELOPMENT OF THE TAX APPEAL TRIBUNAL SYSTEM IM NIGERIA
3. Historical development of Tax Appeal Tribunal…………………………………21
3.1 Modes of applications at the Tax Appeal Tribunal……………………………..21
3.2 Types of Motion…………………………………………………………………22
3.2.1 Motion Ex parte ……………………………………………………………….23
3.2.2 Life span of motion ex parte…………………………………………………..24
3.2.3 Motion on Notice………………………………………………………………24
3.3 .Establishment of the Defunct Body of Appeal Commissioners ……………….25
3.3.1 Composition of the Body of Appeal Commissioners…………………………25
3.3.2 Jurisdiction of the Body of Appeal Commissioners…………………………..26
3.3.3 Limitation to the jurisdiction of the Body of Appeal Commissioners………..26
3.3.4 Judgements of the Body of Appeal Commissioners………………………….27
3.3.5 Comparative analysis between the Body of Appeal Commissioners and the
Tax Appeal Tribunal ……………………………………………………….27
3.4 Establishment of the Value Added Tax Tribunal ……………………………….29
3.4.1 Composition of the Value Added Tax Tribunal……………………………….29
3.4.2 The Powers of the Value Added Tax Tribunal………………………………..30
3.4.3 Limitations to the power of the Value Added Tax Tribunal…………………..30
3.4.4 Comparative analysis between the Value Added Tax Tribunal and
the Tax Appeal Tribunal…………………………………………………….30


CHAPTER FOUR: AN APPRAISAL OF THE JURISDICTION OF THE TAX APPEAL TRIBUNAL IN NIGERIA
4. Introduction ……………………………………………………………………….33
4.1 The jurisdiction of the Tax Appeal Tribunal……………………………………34
4.1.1 Civil Jurisdiction………………………………………………………………36
4.1.2 Criminal Prosecution………………………………………………………….38
4.2 Issues or Problems arising from the Jurisdiction of the Tax Appeal
Tribunal……………………………………………………………………..39
4.2.1 The issue or problem of restriction of Appeals from point of law……………39
4.2.2 The issue or problem of the Minister of Finance to solely appoint both
the Chairman of the TAT and all the support Staff of the Tribunal………...41
4. 3 The limitations to the Jurisdiction of the Tax Appeal Tribunal………………..43
4.4 The Federal High Court as a Superior of Court of Records…………………….46
4.5 Comparative Analysis of Tax Appeal Tribunal procedure between
Nigeria and similar jurisdictions……………………………………………48
4.5.1 Tax Practise and Procedure in Nigeria………………………………………..48
4.5.2 Tax Practise and Procedure in United States …………………………………49
4.5.3 Tax Practise and Procedure in United Kingdom……………………………...50

CHAPTER FIVE: SUMMARY AND CONCLUSION
5.1 Conclusion ………………………………………………………………………53
5.2 Recommendation………………………………………………………………..56
Bibliography
TABLE OF CASES

Adams v Umar (2009) 5 NWLR (Pt 1133) 41……………………………………………….38
Agbonmagbe Bank Ltd v G.M Ollivant Ltd (196 1) All NLR I6…………………………....17
Cadbury Nigeria Plc v FBIR (2010) 2 NWLR [Pt 1179] 561………………………........11,36
Col. Hassan Yakubu(Rtd) v Governor of Kogi State & Ors (1995) 9 SCNJ 122……………15
CNOOC Exploration & Production Nigeria Ltd & Ors v NNPC (Unreported)
CA/L/1144/2015 and CA/L/1145/2015…………………………………………………….37
FIRS v General Telecoms Plc (2011) 4 TLRN 13…………………………………………...47
F.L.K.S v Industrial General Compamies Ltd (Unreported) No.TAT/LAG/APP/10 (2011.....5
Green v Green (1987) 3 NWLR [Pt 61] 480……………………………………………14,15
Iyke Merchandise v Pfizer Inc & Anor (2001) 5 SCNJ 12…………………………………..18
Rellog Brown & Root v FIRS (unreported( suit no: TAT/LAG/APP/25(2012)…………….5
Kings v Justices of Devcon (1819) 1 Chit. Rep 37…………………………………………..34
Leedo Presidential Motel Ltd v Bank of the North (1998) 7 SCNJ 328…………………… .23
Loxroy Nig. Ltd v Triana Ltd (1989) 12 NWLR [Pt 577) 252…………………………….. .25
Madukolu & Ors v Nkemdilim (1962) 1 ALL NLR [Pt 4] 587………………………… 33, 43
Mathew v Chicory Marketting Board (1938) 60 CLR 263 At 276……………………………1
Olaniyan v University of Lagos & Anor (1985) 2 NWLR [Pt 9] 599………………………..14
Orji v D.T.M Nigeria Ltd (2009) 18 NWLR [Pt1173] 467…………………………………..47
Panalpina World Transport (Nig) Ltd v J.B Oladeen International & Ors (2011) ALL
FWLR [Pt564] 21…………………………………………………………………………….15
Seven-Up-Bottling Co Plc v Abiola & Sons Ltd (1995) 2 SCNJ 37……………………..…23
Shittu v Ligali (1934) 16 NLR 21……………………………………………………………17
Stabilini Visinoni Ltd v FBIR (2009) 13 NWLR [Pt 1157] 201…………….…….8, 11, 30, 36
Tenant v Smith (1892) AC 150………………………………………………………….…….1
Ugwu v Ararume (2007) 12 NWLR [Pt 10480] 365…………………………………………38
TABLE OF STATUTES

Capital Gain Tax Act Cap C1 Laws of the Federation of Nigeria 2004
Companies and Allied Matters Act, Cap 20, Laws of the Federation of Nigeria, 2004
Companies Income Tax Act Cap C21 Laws of the Federation of Nigeria
Constitution of the Federal Republic of Nigeria, 1999 (As amended)
Court of Appeal Rules, 2011
Federal High Court (Civil Procedure) Rules, 2009
Federal Inland Revenue Service (Establishment) Act, 2007
Halsbury’s Law of England, Vol. 10 4th ed.
High Court of the Federal Capital Territory, Abuja (Civil Procedure) Rules, 2004
Hugh Court of Lagos (Civil Procedure) Rules, 2012
Investment and Securities Act, 2007
Personal Income Tax Act, Cap P8, Laws of the Federation of Nigeria, 2004
Petroleum Profit Tax Act, Cap P13, Laws of the Federation of Nigeria, 2004
Stamp Duties Act, Cap 58, Laws of the Federation of Nigeria 2004
Tax Appeal Tribunal (Establishment) Order, 2009
Tax Appeal Tribunal (Procedure) Rules, 2010
Taxes and Levies (Approved List for Collection) Act, 1998
Value Added Tax Act, Cap V1, Laws of the Federation of Nigeria 2004
TABLE OF ABBREVIATIONS
A C Appeal Cases
ALL ER All Federation law Reports
ALL FWLR All Federation Weekly Law Reports
ALL NLR All Nigeria Law Reports
BAC Body of Appeal Commissioners
CA Court of Appeal
CAP Chapters
CFRN Constitution of the Federal Republic of Nigeria
Ch. D Chancery Division Law Reports
FBIR Federal Board of Inland Revenue
FHC Federal High Court
FIRS Federal Inland Revenue Service
FWLR Federation Weekly Law Reports
KB Kings Bench Reports
LFN Laws of the Federation of Nigeria
NLR Nigeria Law Reports
NORA Notice of Refusal to Amend
NWLR Nigeria Weekly Law Reports
SCNJ Supreme Court of Nigeria Judgement
TAT Tax Appeal Tribunal
TLRN Tax Law Reports of Nigeria
VAT-T Value Added Tax Tribunal
CHAPTER ONE
GENERAL INTRODUCTION
1.1 Background of the Study
Tax has always been employed to raised sufficient revenue to satisfy the needs of Government such as the provision of service like law and order, defence and health services and education. Revenue from taxation can also be spent on capital projects, creation of social and economic infrastructure which will improve the social life of the people and also enable the economy of the country to grow in future.
Tax is a compulsory exaction of income by a public authority for the purposes. Tax is also raising money for the purpose of government by means of contributions from individual person . It is one of the sources of income for government
Taxes are imposed by statute only .The issue of tax is consequently outside the ambit of common law. It is therefore submitted that for any person to be charged for tax there must be a clear link between the charging provisions and the intended tax payer. But the link must be direct not ferential.
After the Nigeria civil war, indigenous and foreign business began to struggle, conflict arises from taxation began to increase, which thereby made the Federal Government to establish the Federal Revenue Court as a specialized Court to address issues bothering on the Revenue of the Federation. Thereafter, the court was renamed Federal High Court by section 230(2) of the Constitution of the Federal Republic of Nigeria, 1979, which is now in section 251(2) of the 1999 Constitution..
The enlarged jurisdiction on this Court in section 251 to accommodate other matters within its exclusive jurisdiction in entertaining on both criminal and civil matters , and then continues to suffer congestion of cases which has slowed down the will of justice with respect to quick disposal of tax cases. As a result of all these challenges which made disputes inevitable. The Tax Appeal Tribunal was established under the Federal Inland Revenue Service ( Establishment ) Act, 2007 to achieve an efficient, cheap and speedy system of resolving tax disputes.
The Tax Appeal Tribunal was established to bridge the gap exposed by the inadequacies of the Federal High Court proceedings which has led to the loss of government revenue. The continuous delay in proceedings in court has made the government unable to recover accumulated tax arrears and prosecute defaulters. Official statistics have shown that lots of tax payers both in private and in public especially, Ministries, Departments and Agencies (MDGs) are owing billions of naira in government Revenue due to non- remittance. This in turn has affected Governments provision of basic social – amenities and infrastructure.
As a result of all these loss of Government Revenue, the Government now looked for a way out in order to eliminate these irregularities in the tax system, this led to the establishment of Tax Appeal Tribunal (TAT) under the Federal Inland Revenue Service ( Establishment ) Act, 2007, which to a large extent has been able to settle tax disputes amicably and recover tax arrears for the Government.
The researchers main essence of this work is to appraised the comprehensive jurisdiction of the Tax Appeal Tribunal ( TAT )
The researcher will also appraise the establishment, composition, qualification for the appointment as Tax Appeal commissioners and the legal capacity to sue and be sued at the (TAT)
The defunct body of Appeal commissioner (BAC) and the Value Added Tax Tribunal (VAT-T), their comparison with the Tax Appeal Tribunal and differences shall also be appraised in this work.
1.2 Statement of Problem
In critically appraising the jurisdiction of the Tax Appeal Tribunal (TAT) in the settlement of tax disputes in Nigeria. It is pertinent to note that over the years, the Federal Government has made consistent efforts at ensuring that tax disputes are resolved rather speedily without going through the whole hog of litigation in our regular courts which are bugged down by technicalities, unending adjournments, over – crowded case dockets, rigid and mechanical justice system in Tax disputes which relates to the Revenue of the Government. It is thus in the interest of both the tax authorities and the tax payers to have tax disputes resolved effectively and speedily. Also the challenges of the defunct Tax disputes resolution system were multifaceted . Even the present Tax Appeal Tribunal is not immuned from these challenges which are summarized below by the researcher;
1. Problem of the Minister of Finance to solely appoint the Chairman, the Tax Appeal Commissioner and all the support staff off the (TAT)
2. There is also a problem of jurisdictional conflict between the Federal High Court and Tax Appeal Tribunal over matters and revenue of the Federal Government.
3. There is conflict in respect of who to make rules of practice and procedures of the Tax Appeal Tribunal under the FIRS (Establishment ) Act, 2007
4. There seem to be apparent contradiction of paragraph 13(2) and 13(3) 5th schedule to the Federal Inland Revenue Service (Establishment) Act, 2007 while one vests jurisdiction on the Tax Appeal Tribunal to enlargement of time within which an aggrieved person may file appeal, the other appear to foreclose the Tribunal from exercising such discretionary powers.
5. There is also problem of restriction of appeal from point of law .
As a result of these problems listed above, there became a need to establish a specific system that will ensure the easy and smooth operation of the Tax Appeal Tribunal (TAT) in the settlement of Tax disputes in Nigeria Tax system.
1.3 Purpose of the Study
Having state the problems that posed as hindrance to an effectual and effective settlement of disputes by the Tax Appeal Tribunal arising from Taxation.
The following would be the aim of and objective of this work.
1. To examine establishment and the jurisdiction of Tax Appeal Tribunal.
2. To show the challenges associated with the system of Tax Appeal Tribunal and the enormous powers of the Minister of Finance over Tax Appeal Commissioner and their staff.
3. Another aim and objective of this work is to identify the jurisdictional conflict between the Federal High Court and the Tax Appeal Tribunal over matters and Revenue of the Federal Government.
4. To scrutinize the apparent contradiction between paragraph 13(2) and paragraph 13(3) of 5th schedule to the FIRSEA, 2007.
1.4 Scope of the Study
This work focuses on the appraisal of the jurisdiction of the Tax Appeal Tribunal which is fundamental in the settlement of Tax disputes in Nigeria Tax system under the FIRS ( Establishment ) Act, 2007.
It will also examine the regime of the defunct Tribunals- The Body of Appeal Commissioner and the Value Added Tax Tribunal which were in existence before the TAT.
Finally, an x-ray of legal frame such as laws providing for the settlement of tax disputes in Nigeria will be considered.
1.5 Significance of the Study
The jurisdiction of the Tax Appeal Tribunal is very important in the taxation system. If there is no jurisdiction as to Tax dispute, then the whole Tax administration system is hopeless and of no relevance. This study will expose its readers to the knowledge of the Tax Appeal Tribunal in the settlement of tax disputes has become a tool of tax compliance. This work will be important to lawyers, law student, tax advisers and consultant, law teachers ,researchers and general public.


1.6 Research Methodology
The researcher methodology used in this work is doctrinal method of research. This involves narrative, descriptive and comparative approaches. Also deployed is the analysis of key primary and secondary sources. The primary sources such as the Federal Inland Revenue Service (Establishment) Act 2007, the Tax Appeal Tribunal (Procedure) Act, 2010, Case Laws as well as Rules of Practice and Procedure of other Courts. The secondary sources includes; Articles, Textbooks, Journals, Internet materials, Seminar papers and Newspapers.
1.7 Organizational Layout
This work is divided into five chapters. Chapter one explores the background of the study, general introduction, statements of problems, the purpose of the study, the objective, the significance of the study ,and scope of study. Chapter two deals with the establishment, composition of the TAT, qualification for appointment as Appeal Commissioner, Term of office, Resignation and removal of the Appeal Commissioners, Parties before the TAT and the legal capacity to sue and be sued at the TAT. Chapter three examines the Historical Development of the Tax Appeal System in Nigeria and the establishment of the Defunct Body of Appeal Commissioners (BAC) and Value Added Tax Tribunal (VAT-T), their jurisdictions, powers, limitations and comparison with the TAT. Chapter four examines the jurisdiction of the TAT generally and the Federal High Court as the superior court of records. Chapter five deals with conclusion and recommendations.



1.8 Definition of Terms
APPEAL: According to Black’s Law Dictionary , an Appeal means to seek review from a lower Court’s decision by a higher Court
COURT: According to Black’s Law Dictionary , a Court is defined as a Governmental Body consisting of one or more Judges who sit to adjudicate disputes and administer justice.
JURISDICTON: Jurisdiction is a Court power to decide a case or issue a decree
TAX: According to Black Law Dictionary , tax is defined as a charge, usually monetary, imposed by the Government on persons, entities, transactions or property to yield public revenue.
TRIBUNAL: A Tribunal is defined as a Court or other adjudicatory Body . It is also the seat, Bench, or place where a Judge sit
1.9 Literature Review
Abdulrazaq wrote on this subject . He discussed the establishment, Composition and qualification for appointment of the tax Commissioners. He also dealt with the terms of office of the Commissioners, jurisdiction, criminal prosecutions, right to legal representative before the Tribunal and appeals amongst others. Notwithstanding his in depth discussion of the subject, there remains some outstanding areas which this study hopes to cover. Among these are parties before the Tax Tribunal, precisely.
Another writer is Amucheazi , who in his Seminar paper highlighted the jurisdictional issues in the Tax Appeal Tribunal Disputes, succinctly analysed the powers, composition and jurisdiction of the Tax Appeal Tribunal as legally defective and unconstitutional as usurping the powers of the Federal High Court which has exclusive jurisdiction over and above any other Court and Tribunal with regards issues relating to taxation. The author delved into salient issues of the composition of the Tribunal, unconstitutionality of the ouster clause as embedded in the Establishment provisions of the Tax Appeal Tribunal. Thus, this study however, will examine the Defunct Body of Appeal Commissioner (BAC) which was provided by the various tax statutes and the Value Added Tax Tribunal (VAT-T) by discussing the establishment, powers and jurisdiction of these Tribunals, limitation to the jurisdiction, Appeals and comparative study between the TAT on one hand the VAT-T on the other hand.
Ejemeyovwi has also argued that Tax Appeal Tribunal is unconstitutional in that it usurps the exclusive jurisdiction of the Federal High Court. He founded his argument on section 251 and the decision of the Court of Appeal in Stabilini Visinoni Ltd v FBIR . However, this study hold a different view from that of Ejemeyovwi. It does appear that the he did not take into consideration the peculiar circumstances of the case of Stabilini Visinoni . First, the respondent filed action before the VAT-Appeal Tribunal while the action at the Federal High Court on the same set of facts was still pending and subsisting. Furthermore, section 20(3) of VAT act and Article 24(1) of second Schedule to the VAT Act vest appellate jurisdiction to the Court of Appeal. In other words, appeal from the VAT Tribunal lie directly to the Court of Appeal, thus contesting the exclusive jurisdiction of the Federal High Court. It was against this backdrop that Ogunbiyi J.C.A, was quick to declare that “on the totality of the deductions arrived at, it goes without much saying that section 20 of VAT-Tribunal Act is very inconsistent with the Constitution and hence same cannot, therefore, stand and is hereby declared null and void. Thus , this work demonstrates that there is a world of difference in the present Tax Appeal Tribunal and the defunct VAT Appeal Tribunal in arriving at the conclusion that the Tax Appeal Tribunal is constitutional.
Finally, another legal luminary, N.I Ibegbu, in his paper , had a contrary view of the Establishment of the Tax Appeal Tribunal, stating that section 251 of the Constitution , though excludes other court from exercising and determining matters arising from taxation, it did not exclude Tribunals and hence, the Tax Appeal Tribunal is Constitutional.
This research therefore, has discussed the jurisdiction of the Tax Appeal Tribunal under the Federal Inland Revenue Service(Establishment) Act and thereby concurred with the learned Author that the Tax Appeal Tribunal jurisdiction is constitutional.

Tags: Law Project,

₦ 5,000

Selar Logo Selar Logo