IN THE TAX APPEAL TRIBUNAL
SOUTH-SOUTH ZONE
HOLDEN AT BENIN
APPEAL No.: TAT/SSZ/021/2023
BETWEEN:
FEDERAL INLAND REVENUE SERVICE APPELLANT
AND
PRESBOTON NIGERIA VENTURES LIMITED RESPONDENT
BEFORE:
PROF. OBEHI A. ODIASE-ALEGIMENLEN CHAIRMAN
DR DAVID ALA-PETERS COMMISSIONER
MRS HILDA OFURE OZOH COMMISSIONER
MR VITALIS FRIDAY AJOKU COMMISSIONER
PROF. OLATUNDE JULIUS OTUSANYA COMMISSIONER
THURSDAY 14TH DECEMBER 2023
JUDGEMENT
This Appeal is brought before the Tax Appeal Tribunal (South-South Zone Sitting in Benin), dated and filed on 17th April 2023 in Suit No. TAT/SSZ/021/2023.
BRIEF FACTS
The Appellant is a Statutory body charged with the responsibility among others to assess, collect and remit taxes to the government of Nigeria while the Respondent is a Company registered under Part 11 (Private company limited by share) for the purpose of supply of goods, services/general contracts. It is a registered taxpayer with Tax Identification Number 10594384-0001.
The Appellant being dissatisfied with the action of the Respondent who has failed, neglected and or refused to deliver its Company Income Tax (CIT), Education Tax (EDT) and Value Added Tax (VAT) in the way and manner prescribed by law for the period of 2016 to 2020 Years of Assessment (YOA) appealed to the Tax Appeal Tribunal, South South Zone upon the grounds set out below:
That the Respondent has failed neglected and refused to remit outstanding Company Income Tax, Education Tax and Value Added Tax amounting to ₦34,874,898.24 (Thirty Four Million, Eight Hundred and Seven Four Thousand, Eight Hundred and Ninety Eight Naira, Twenty Four Kobo only) for the period the period 2016 to 2020 (inclusive of interest and penalties). The particulars of the ground of appeal are:
1. The Appellant is a statutory body charged with the responsibilities among others to assess, collect and remit taxes to the government of the Federation in accordance to FIRS Act 2007.
2. The Respondent is a company registered under part 11 (Private company limited by shares) for the purposes of supply of goods and services/general contracts
3. The Respondent is a going concern, a registered taxpayer with tax identification number 10594384-0001.
4. By virtue of the nature of its activities, the Respondent is a taxpayer liable to render to the
Appellant a true and accurate returns of its Company Income Tax, Education Tax and Value Added Tax.
5. For the period of 2016-2020, the Respondent failed, neglected and refused to remit its Company Income Tax, Education Tax, Value Added Tax Returns to the Appellant in a way and manner prescribed by law.
6. The Respondent has failed to ensure transparent and effective management and internal control in financial Reporting, thereby depriving the Federal Government of Nigeria its legitimate income.
7. The Respondent filed financial statement for 2017 and 2018 on 19th June, 2019 on the Appellant.
8. Consequently, the Appellant served a letter dated 17th August, 2020 on the Respondent on Review of Tax Returns for 2016-2020 based on the Respondent’s Bank statement cum file records with the Appellant.
9. The findings of the above review were duly communicated with the outstanding liability stated via the Appellant’s letter to the Respondent dated 17th August 2020.
10. The Respondent was asked to provide evidence of payment of the above liabilities or an objection not later than 21 days from the date of the latter.
11. That the Respondent replied on the 10th December, 2020 without providing evidence of payment but rather alleged that the monies in the bank statement were loans secured from family and friends.
12. The Appellant served a reminder for RE: Review of Tax Returns (2016-2019 Accounts) on the Respondent via a letter dated 15th December 2020 requesting the Respondent to furnish the Appellant with Loan Agreement not later than 7 days from the date of receipt.
13. The Appellant served a second reminder for Re: Review of Tax returns (2016-2019 Accounts) on the Respondent via a letter dated 18th July, 2022 communicating the Respondent’s tax liabilities.
14. That in tandem with the review findings dully communicated to the Respondent severally, a follow up to the demand stated in the preceding paragraph dated 12th September, 2022 was dully issued and served on the Respondent.
15. That the Respondent never provided any further document to rebut the tax assessments.
16. That in computing the Respondent tax liabilities, its VAT deducted at source was taken into consideration.
17. That as the Respondent failure to remit the taxes due to the Appellant continued unabated, its tax file was transferred to the legal unit of the Appellant for the recovery of the tax liabilities.
18. The Appellant’s legal unit issued and served a demand letter dated 28th November 2022 on the Respondent wherein one (1) month ultimatum was given to the Respondent to pay the tax due or face the legal consequences.
19. The Respondent has failed to remit the taxes due and there has been no indication of any efforts at remittance.
20. The Appellant shall at the hearing of this suit rely on all written correspondences exchanged between the Appellant and the Respondent at the hearing of the Appeal.
Consequently, the Appellant sought the following reliefs from this Honorable Tribunal.
1. The sum of ₦34,874,898.24 (Thirty Four Million, Eight Hundred and Seven Four Thousand, Eight Hundred and Ninety Eight Naira, Twenty Four Kobo only) being unremitted Company Income Tax, Education Tax and Value Added Tax for the period of 2016-2020 Year of Assessment.
2. Interest at the rate of 23% and penalty at the rate of 10% from the commencement of this
Appeal until Judgement and until judgment debt is liquidated in accordance with the extant law.
3. An award of ₦10,000,000 (Ten Thousand Million Naira only) in favour of the Appellant as cost of prosecuting this appeal.
TRIAL
The matter first came up for Mention on WEDNESDAY 24th May 2023 after Hearing Notice had been served on the Respondent. Respondent was not in the Tribunal, so the matter was adjourned to FRIDAY 23rd June 2023 for Hearing. On that day, the Respondent was still not in the Tribunal after another Hearing Notice was issued to them. The Appeal was again adjourned to FRIDAY 21st July 2023 for definite Hearing. Again, due to the absence of the Respondent, the Tribunal adjourned the matter to FRIDAY 25th August 2023 in the interest of justice and fair hearing. Consequently, Trial in this matter commenced on the said FRIDAY 25TH August 2023, where the Appellant Witness in Chief, Mrs. Blessing O. Irabor (Assistant Manager Tax to the Appellant) testified and tendered 5 Exhibits (Exhibit FIRS 1 to Exhibit FIRS 5). The matter was adjourn to Wednesday 20th September, 2023 for Cross Examination of AW1. On the said date, the Respondent was not still in the Tribunal, so the matter was adjourned again to THURSDAY 19th OCTOBER 2023 for Defence. The Respondent was then foreclosed from Defence since they were not still in the Tribunal. On FRIDAY 17th November, 2023, the Appellant adopted its Final Written Address.
ISSUE FOR DETERMINATION
The Appellant’s Counsel, J. N. Nwokolobia in his final written address dated 10th November, 2023 and filed on the same day, formulated one issue for determination which is:
Whether the Assessment raised and served on the Respondent has become final and conclusive.
After a careful review of the facts before the Tribunal and the arguments made by the Appellant in this case, the Tribunal is of the view that only one issue calls for determination which is:
Whether the Appellant in this matter has made out a case to be entitled to the judgment of this Tribunal.
Judgment is not given in favour of a Claimant just for the asking, A Court or Tribunal must be convinced that a Claimant in this case the Appellant has made out a case to be entitled to its judgment. The Tribunal will not close its eyes to a matter that does not have merit merely because the Defendant in this context, the Respondent, was absent or did not put up a defence at all.
The position of the law is that civil matters are proved on preponderance of evidence and balance of probabilities. See the cases of SEOGBEKUN V ADELAKUN (2013) All FWLR (PART 664)168 at 188 D-F and MR. OLUMIDE HENRY v. DEMMY GLOBAL RESOURCES LIMITED. LPELR-49972(CA). Section 76 of CITA, LFN 2004, as amended and Section 34(1) of FIRS (Establishment) Act 2007 as amended, state that any assessment that has not been dully objected to within the stipulated 30 days period has become final and conclusive. Section 76 of CITA, LFN 2004 is reproduced below:
‘Where no valid objection or appeal has been lodged within the time limited by section 69, 72 or 75 of this Act as the case may be, against an assessment as regards the amount of the total profits assessed thereby, or where the amount of the total profits has been agreed to under section 69 (5) of this Act, or where the amount of such total profits has been determined on objection, revision under the proviso to section 69 (5) of this Act, or on appeal, the assessment as made, agreed to, revised or determined on appeal, as the case may be, shall be final and conclusive for all purposes of the Act as regards the amount of such total profits’
Exhibit FIRS 1 to Exhibit FIRS 4 are all notifications and reminders on the REVIEW OF TAX RETURNS (2016-2019 ACCOUNTS) dated 17th August 2020, 15th December 2020, 18th July 2022, and 12th September 2022. Exhibit FIRS 5 is a Demand Notice dated 28th November 2022. From the date Exhibit FIRS 1 was issued to the date when this Appeal was filed on the 17th April 2023, more than two (2) years has elapsed wherein the Respondent did not take any step to object or refute the assessment. This implies an admission, and the Tribunal is of the view that the assessment has become final and conclusive. See FIRS V Oba International Services Ltd, All Nigerian Tax Cases, Vol. 11, page 400; FIRS V Nigeria Services and Supply Ltd, All Nigerian Tax Cases, Vol. 11, page 390; FBIR V Manila Industrial Security Services Ltd, All Nigerian Tax Cases, Vol. 2, Page 62. In addition, Paragraph 13(3) of First Schedule to FIRS (Establishment) Act 2007 further states that:
‘Where a notice of appeal is not given by the appellant as required under subparagraph (I) of, this paragraph within the period specified, the assessment or demand notices shall become final and conclusive and the Service may charge interests and penalties in addition to recovering the outstanding tax liabilities which remain unpaid from any person through proceedings at the Tribunal’.
It is also the position of the law that where a Claimant gives evidence in line with his/her/its claim and that piece of evidence was not challenged and/or contradicted by the defendant, the Court should enter a judgment in favour of the Claimant. See the case of UNIVERSITY OF CALABAR VS. EPHRAIM (1993)1 NWLR (PT. 271) PAGE 551 RATIO 6 AT 556.
It is also trite law that where a matter is undefended, as in this case, what is required is minimal proof for claimant to be entitled to judgment in favour of the Claimant. See the case of CITY EXPRESS BANK LTD V FORTURN INTERNATIONAL BANK PLC & ORS. (2002) FWLR) PT.126) 922@925 where the court held that an uncontroverted fact in affidavit or pleadings are bound to be accepted by Court and can also be deemed to have been admitted as true. See also the case of BAMIGBOYE & ORS V. CHIEF AWOYINKA & ANOR. (2002) FWLR (PT.113) 396 @ 405.
The endorsement in the Tribunal’s file shows that the Respondent in this matter was duly served severally and is aware of the pendency of same but chose not to enter appearance or defend the said suit.
Consequently, the lone issue in this matter is therefore resolved in favour of the Appellant as the Tribunal agrees that the Appellant has made out a case to be entitled to the judgment of this Tribunal. The Tribunal therefore grants the Appellant prayers and order as follows:
(1) The sum of ₦34,874,898.24 (Thirty Four Million, Eight Hundred and Seven Four Thousand, Eight Hundred and Ninety Eight Naira, Twenty Four Kobo only) being unremitted Company Income Tax, Education Tax and Value Added Tax for the period of 2016-2020 Year of Assessment.
(2) Interest at the rate of 23% and penalty at the rate of 10% from the commencement of this Appeal be added to the judgement debt until Judgement and until judgment debt is liquidated in accordance with the extant law.
(3) Prayer three (3) for Cost of the Appeal is refused as no evidence was led on this
This is the unanimous Judgement of the Tribunal
Dated this __ 14th _____ day of __ December___ 2023.
Signed:
Hon. (Prof.) Obehi Adetokunbo Odiase-Alegimenlen Chairman
Hon. (Dr.) Ala-Peters David Hon. (Mrs.) Hilda Ofure Ozoh
Member Member
Hon. (Barr) Ajoku Vitalis Friday Hon. (Prof.) Olatunde Julius Otusanya Member Member
REPRESENTATION:
J. N. Nwokolobia Appellant