IN THE TAX APPEAL TRIBUNAL
SOUTH-SOUTH ZONE
HOLDEN AT BENIN
APPEAL No.: TAT/SSZ/019/2023
BETWEEN:
FEDERAL INLAND REVENUE SERVICE APPELLANT
AND
PATRICK IGBINOMWANHIA 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
WEDNESDAY 13TH 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/019/2023.
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 Nigerian Company engaged in the Business of Contract of Services among others and incorporated on 1st of February, 2012 under the Company and Allied Matters Act.
The Appellant being dissatisfied with the action of the Respondent who has failed, neglected and or refused to deliver its Value Added Tax (VAT) in the way and manner prescribed by law for the period of 2014 to 2020 Years of Assessment (YOA) as per desk examination finding appealed to the Tax Appeal Tribunal, South-South Zone on the grounds below:
That the Respondent failed, neglected and refused to remit outstanding Value Added Tax of
N19,369,541.44 (Nineteen Million, Three Hundred and Sixty-Nine Thousand, Five Hundred and Forty-One Naira, Forty Four Kobo only) as per desk examination conducted on the Company for the period 2014 to 2020. The particulars of the ground of are:
1. The Respondent is a going concern and a registered tax payer with tax identification number 12608409-0001. Its registered office situates at No. 1 and 2 Upper Siluko Road Benin City.
2. By virtue of the nature of its business, the Respondent is a tax payer liable to render to the
Appellant a true and accurate returns of its Value Added Tax as and when due.
3. For the period of 2014-2020, the Respondent failed, neglected and refused to remit its Value Added Tax returns in a way and manner prescribed by law.
4. The law empowers the Appellant to either conduct desk examination or trigger a full tax audit on any Company it has reasonable belief that it has not been remitting taxes or has benn under-remitting taxes to the Appellant.
5. That having analysed the Company’s turnover and the various audited account (2014-2020) filed by the Respondent, it was discovered that the necessary accrued tax liabilities has not been defrayed.
6. That consequent upon such neglect by the Respondent, the Appellant conducted a desk
examination of the Respondent’s tax returns to ascertain the level of its compliance with
regards to the various provisions of the laws and to confirm the authenticity of the
Respondent’s tax returns to the Appellant.
7. The Appellant having analysed the Company’s turnover and VAT returns for the years under review, discovered that the Company was not remitting the appropriate Value Added Tax and that the stipulated time frame for payment is long overdue and interest and penalties are already accruing on the amount of tax yet paid.
8. The Appellant computed the Value Added Tax for tax due against the Respondent from 2014-2020 years of Assessment through a letter dated 6th July, 2020.
9. The Respondent did not object to the Tax Computation dully served on it.
10. That having failed to pay the established tax liability, the first reminder letter with updated tax liabilities dated 17th March, 2022 was issued and served on the Respondent with a view to recover the tax due, yet the Respondent did not respond to the letter.
11. That in consideration of paragraph (12) above the assessment has become final and conclusive.
12. In order to recover the tax due, the Respondent wrote a second reminder letter dated 4th July, 2022.
13. The Respondent’s current VAT Re-Assessment from 2014-2020 is N19,369,541.44 (Nineteen Million, Three Hundred and Sixty-Nine Thousand, Five Hundred and Forty-One Naira, Forty Four Kobo only) including penalties and interest.
14. That a third reminder letter dated 29th August, 2022 was also dully issued and served on the Respondent and it still failed to respond.
15. When the Respondent’s file was referred to the Appellant’s Legal Unit, a letter of demand dated 28th November, 2022 was issued and same was served on the Respondent.
16. That the Respondent being unwilling to remit the tax due did not respond to any of the letters stated above.
17. The Appellant shall at the hearing of this Appeal, rely on all written correspondences exchanged between the Appellant and the Respondent.
Consequently, the Appellant sought the following reliefs from this Honorable Tribunal.
1. The sum of N19,369,541.44 (Nineteen Million, Three Hundred and Sixty-Nine Thousand, Five Hundred and Forty One Naira, Forty Four Kobo only) being unpaid additional Value Added Tax as per desk examination for the period of 2014-2020 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 N10,000,000 in favour of the Appellant as cost of prosecuting this appeal.
TRIAL
The matter first came up for Mention on THURSDAY 22ND JUNE, 2023 after Hearing Notice served on the Respondent. Respondent was not in the Tribunal, so the matter was adjourned to FRIDAY 21ST JULY, 2023 for Hearing. On that day, the Respondents were still not in the Tribunal after another Hearing Notice being issued to them. The Appeal was again adjourned to FRIDAY 25TH AUGUST, 2023 for definite Hearing. Consequently, Trial in this matter commenced on the said FRIDAY 25TH AUGUST 2023, where the Appellant Witness in Chief, Mrs. Blessing O. Irabor (Asst Manager Tax to the Appellant.) testified and tendered 5 Exhibits (Exhibit FIRS 1 to Exhibit FIRS 5). The matter was adjourn to Wednesday 20th day of 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 Respondents were then foreclosed from Defence since they were not still in the Tribunal. On Friday 17th day of 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 VAT 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 58(1) of PITA 2011(as amended) states that any assessment that has not been dully objected to within the stipulated 30 days period has become final and conclusive. Exhibit FIRS 1 to Exhibit FIRS 4 are all notifications and reminders on the REVIEW OF TAX RETURNS (2014-2020 ACCOUNTS) dated 6th July 2020, 17th March 2022, 4th July 2022, and 29th August 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 is more than two (2) years 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.
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 N19,369,541,44k being unpaid additional Value Added Tax as per desk examination for the period of 2014-2020 Year of Assessment pe paid to the Appellant by the Respondent
(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 __ 13th _____ 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