Court Nullifies Tax Laws Demanding 50% Payment of Disputed Assessment Before Appeal 

Alex Enumah in Abuja 

Justice James Omotosho of a Federal High Court, Abuja, on Thursday declared as unconstitutional, null and of no consequences, some sections of 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 Omotosho, in a judgment declared the said sections unconstitutional on the grounds that they constrained the constitutionally provided right of appeal.

A Senior Advocate of Nigeria and former President of the Nigerian Bar Association (NBA), Joseph Daudu, SAN, had dragged the federal government to court to challenge the law which had required him to pay 50% of the N1.2 billion tax he was billed, before he could appeal his assessment. 

Daudu in the suit marked: FHC/ABJ/CS/12/2022, claimed among others, that the provisions were unfair, unlawful and a violation of the right to appeal.

He then prayed the court to declare the said provisions as unconstitutional, null and void and of no consequences.

In his judgment on Thursday, Justice Omotosho pointed out that although the 1st respondent (the Minister) had power to make rules for the conduct of appeal, he was not expected to construct an embargo to the enjoyment of the right to appeal of any appellant. 

According to him, “the right to appeal is a constitutional right and the 1st respondent cannot take away such right through the making of a subsidiary legislation”.

He added: 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.

“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.

“This court will 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 subsequently went ahead to declare the provisions of Order III Rule (6) (a) of the Tax Appeal Tribunal (Procedure) Rules, 2021 as “unconstitutional, null and void and contrary to the provisions of 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.” 

He also declared that the provisions of Order V Rule 3 of the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions, 2021 “is unconstitutional, null and void and of no consequence having regard to the provisions of Sections 251(1), 6(6) (a) & (b), 36(1) & (2) of the 1999 Constitution (as amended), Paragraph 17(1) and 21 of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act, 2007 and is contrary to the principles of separation of powers and the Rule of Law.”