LONGE MEDICAL CENTRE & ANOR v. AG, OGUN STATE & ANOR (2020)

LONGE MEDICAL CENTRE & ANOR v. AG, OGUN STATE & ANOR

(2020)LCN/14171(CA)

In The Court Of Appeal

(IBADAN JUDICIAL DIVISION)

On Friday, May 15, 2020

CA/IB/21/2013

Before Our Lordships:

Jimi Olukayode Bada Justice of the Court of Appeal

Haruna Simon Tsammani Justice of the Court of Appeal

Folasade Ayodeji Ojo Justice of the Court of Appeal

Between

1. LONGE MEDICAL CENTRE 2. DR. SAMUEL OLANREWAJU BADANKI APPELANT(S)

And

1. ATTORNEY GENERAL, OGUN STATE 2. INTERNAL REVENUE SERVICE, OGUN STATE RESPONDENT(S)

RATIO

FUNDAMENTAL HUMAN RIGHT

Fundamental Right is defined by the Black’s Law Dictionary, tenth edition as a right derived from natural law or fundamental law. It is a primary condition to a civilized existence. The fundamental rights of Nigerian citizens are preserved under Chapter IV of the Constitution of the Federal Republic of Nigeria (as amended) as well as the African Charter on Human and People’s Rights (Ratification and Enforcement) Act Cap. 10, Laws of the Federation 1990. They are rights binding on both the government and the governed. See RANSOME KUTI & ORS VS. ATTORNEY GENERAL OF THE FEDERATION & ORS (1985) 2 NWLR (PT. 6) 211; FEDERAL REPUBLIC OF NIGERIA & ANOR. VS. IFEGWU (2003) 15 NWLR (PT. 842) 113 AND AGBAI & ORS VS. OKOGBU (1991) 7 NWLR (PT. 204) 391.
All citizens of Nigeria have the right to acquire and own property in any part of Nigeria. See Sections 43 and 44 of the Constitution of the Federal Republic of Nigeria 1999 (as amended). The right to privacy and freedom of movement of every Nigerian citizen is also guaranteed under Sections 37 and 41 of the 1999 Constitution (supra). The complaint of the Appellants is that their rights above were breached by the 2nd Respondent. It should however be noted that fundamental rights are not absolute. See Section 44(2)(a) of 1999 Constitution (supra) which provides as follows:
“(2) Nothing in subsection (1) of this Section shall be construed as affecting any general law:-
(a) For the imposition or enforcement of any tax, rate or duty”.
Furthermore, the right to freedom of movement is subject to the procedure permitted by law for the purpose of bringing a person before a Court of law or in execution of a Court order. See Section 35 of the 1999 Constitution (supra) and the cases of KALU VS. FEDERAL REPUBLIC OF NIGERIA (2016) 9 NWLR (PT. 1516) 1; HASSAN VS. ECONOMIC AND FINANCIAL CRIMES COMMISSION (2014) 1 NWLR (PT. 1389) 607; DANGABAR VS. FEDERAL REPUBLIC OF NIGERIA 2014) 12 NWLR (PT. 1422) 575. PER OJO, J.C.A.

WHICH LAW IS RELEVANT AND APPLICABLE IN THE DETERMINATION OF A MATTER

Even though the Personal Income Tax Act has undergone several amendments since the cause of action in the instant appeal arose, the law is settled that the law relevant and applicable in the determination of a matter is the law in force at the time the cause of action arose. See OKONKWO & ORS VS. OKONKWO & ORS. (2010) 14 NWLR (PT. 1213) 228; ADAH VS. NYSC (2004) 13 NWLR (PT. 891) 639; OBIUWEUBI VS. CENTRAL BANK OF NIGERIA (2011) 7 NWLR (PT. 1247) 465; SHELL PETROLEUM DEVELOPMENT CORPORATION VS. ANARO & ORS. (2015) 12 NWLR (PT. 1472) 122. The applicable law is the Personal Income Tax Act 1993. PER OJO, J.C.A.

WHETHER OR NOT THE ISSUE OF RESIDENCE IS IMPORTANT FOR THE PURPOSE OF PAYING THE PERSONAL INCOME TAX

There is no gain saying that the issue of residence is very important for the purpose of payment of Personal Income Tax. Individual employees have an obligation to pay such tax in their respective states of residence. The tax authority of the state where an individual is resident is the relevant tax authority for the purpose of assessment and remittance of Personal Income Tax. In the case of ECODRILL (NIG.) LTD. VS. AKWA IBOM BOARD OF INTERNAL REVENUE (2015) 11 NWLR (PT. 1470) 303 AT 336, PARAS C-F; Nweze JCA (as he then was) held thus:
“In Nigeria’s tax jurisprudence, the basis for the imposition and or collection of Personal Income Tax are two-fold; “residence” and “source”. This is concerned only with the former, that is residence.
Under our tax law regime, one of the basis of tax liability on the part of a tax payer and the power of an appropriate tax authority to collect personal income tax is “residence”.
Simply put, the principle of residence relates primarily to the existence of sufficient connection between a relevant tax authority and a taxable person. It is shown that a tax payer resides in any state in Nigeria, that States Board of Internal Revenue is the appropriate authority conferred with the power to collect Personal Income Tax from such tax payers, i. e. resident tax payers, are expected to give account of their worldwide earnings to the State Tax Authority. PER OJO, J.C.A.

WHETHER OR NOT GROUNDS OF APPEAL MUST ARISE FROM THE DECISION AGAINST WHICH THE APPEAL LIES

The law is trite that a ground of appeal must arise from the decision against which the appeal lies. It should also constitute a challenge to the validity of the ratio of the decision. See K.R.K. HOLDINGS (NIG.) LTD. VS. FIRST BANK OF NIGERIA & ANOR. (2017) 3 NWLR (PT. 1552) 326; OMISORE & ANOR. VS. AREGBESOLA & ORS. (2015) 15 NWLR (PT. 1482) 205; WAGBATSOMA VS. FEDERAL REPUBLIC OF NIGERIA (2018) 8 NWLR (PT. 1621) 199 AND KLM.
Ratio decidendi is the principle of law upon which a particular case is decided. See ADESOKAN & ORS VS. ADETUNJI & ORS (1994) 5 NWLR (PT. 346) 540; SAVANNAH BANK (NIG) LTD. VS. P.A.S.T.A (1987) 1 SC 198 AND N.A.B. LTD. VS. B. ENG. (NIG.) LTD. (1995) 8 NWLR (PT. 413) 257.
In A.I.C. LTD. VS. NNPC (2005) 11 NWLR (PT. 937) 563, Edozie JSC held thus:
“The ratio decidendi of a case represents the reasoning or principle or ground upon which a case is decided. Obiter simply means in passing, incidental, cursory. Obiter reflect inter alia, the opinion of the judge which do not embody the resolution of the Court. The expression of a judge in a judgment must be taken with reference to the facts of the case which he is deciding, the issues calling for decision and answers to those issues. These are what should be looked for in any judgment. The manner in which the judge chooses to argue the case is not all important things. Rather it is the principle he is deciding. See U.T.C. NIG. LTD. VS PAMOTEI (1989) 2 NWLR (PT. 103) 244”.
The learned trial judge in his judgment at page 97 held thus:
“Turning to the merit of the case, I must state from the onset that the facts of this case are not in themselves complicated. By virtue of the provisions of Section 46 of the 1999 Constitution any person who alleges that any of his fundamental rights provided for in Chapter IV of the 1999 Constitution has been, is being or likely to be contravened in any state may apply to a High Court in that State for a redress. PER OJO, J.C.A.

WHETHER OR NOT DAMAGES IS A PECUNIARY COMPENSATION

Damages is the pecuniary compensation which the law awards to a person for the injury he has sustained by reason of the act or default of another be it a breach of contract or tort. They are the recompenses given by process of law to a person for wrong suffered for the act of another. Damages are awarded to place the claimant in a position as if the matter complained about had not occurred. See UMUDJE VS. SHELL PETROLEUM DEVELOPMENT COMPANY NIGERIA LTD. (1975) 9 – 11 SC (Reprint) 95; ADIM VS. NIGERIAN BOTTLING COMPANY LTD. (2010) 9 NWLR (PT. 1200) 543; NEKA B.B.B. MANUFACTURING CO. LTD. VS. ACB LTD. (2004) 2 NWLR (PT. 858) 521 AND GABRIEL ATIVIE VS. KABEL METAL (NIG.) LTD. (2008) 10 NWLR (PT. 1095) 399.
In B.B. APUGO & SONS LTD. VS. OHMB (2016) 13 NWLR (PT. 1529) 206, the Supreme Court per Kekere-Ekun JSC held thus:
“The object of an award of damages is to compensate a person for the injury he has sustained by reason of the act or default of another, whether the act or default is a breach of contract or tort. The measure of damages on the other hand is an amount that would reflect what would put the injured party in the same position as he would have been had the injury not occurred.”
Damages are generally not punitive in nature. A claim for exemplary damages however project the award of damages geared towards punishing a defendant for his actions. They are awarded to punish the defendant. They are awarded in action rooted in tort and are generally not recoverable in cases of breach of contract except in cases of breach of promise to marry.
The three categories of actions in tort in which exemplary damages may be awarded are:
1) Oppressive, arbitrary or unconstitutional action by the servants of the Government. See ROOKES VS. BARNARD (1964) AC 1129 AT 1223 AND 1224.
2) Where the defendant’s conduct has been calculated by him to make a profit of himself which may well exceed the compensation payable to the plaintiff.
3) Where exemplary damages are expressly authorised by Statute.
In MEKWUNYE VS. EMIRATES AIRLINES (2019) 9 NWLR (PT. 1677) 191 AT 225 PARAS C-E, Peter-Odilli JSC held thus:
“On what amounts to punitive or exemplary damages, this was dealt with by the Court in the case of ODIBA VS. AZEGE (1998) LPELR – 2215 (SC) AT PAGE 25, (1988) 9 NWLR (PT. 566) 370 thus:
“Exemplary damages in particular, also known as punitive or vindictive damages can apply only where the conduct of the defendant merits punishment, and this may be considered to be so where such conduct is wanton, as where it discloses fraud, malice, cruelty, insolence or the like, or where he acts in contumelious disregard of the Plaintiff’s rights. But exemplary damages to some extent are distinct from aggravated damages whereby the motives and conduct of the defendant aggravating the injury to the plaintiff would be taken into consideration in the assessment of compensatory damages” Per Iguh, JSC.” PER OJO, J.C.A.

FOLASADE AYODEJI OJO, J.C.A. (Delivering the Leading Judgment): This appeal is against the Ruling/Final decision of the Ogun State High Court sitting in Abeokuta in Suit NO.M/175/2011 delivered on 5th March 2012.

The Appellants approached the lower Court vide an Originating Motion filed on 27th of October 2011 in which they sought the following reliefs:
1. “A Declaration that the invasion of the Applicants’ Hospital premises located at 126, Olusegun Osoba Road, Agbado, Lagos on the 28th September, 2011 by servants, agents, men and officers of the 2nd Respondent without any Court order or injunction is wholly illegal, unlawful and a violation of the Applicants’ Fundamental Human Rights to privacy, personal liberty, freedom of movement and right to property as protected and guaranteed by the provisions of the Constitution of the Federal Republic of Nigeria, 1999 and of the African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act, Cap. 10 Laws of Federation of Nigeria 1990.
2. A declaration that the subsequent hijacking, locking and/or closure of the Applicants’ Hospital premises located at

126, Olusegun Osoba Road, Agbado, Lagos since the 28th of September, 2011 till date by servants, agents, men and officers of the 2nd Respondent without any Court order or injunction is wholly illegal, unlawful and a violation of the Applicants’ Fundamental Human Rights to privacy, personal liberty, freedom of movement, dignity of human person and right to property as protected and guaranteed by the provisions of the Constitution of the Federal Republic of Nigeria, 1999 and the African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act, Cap. 10 Laws of Federation of Nigeria 1990.
3. A declaration that the invasion, hijacking, locking and/or closure of the Applicants’ Hospital premises located at 126, Olusegun Osoba Road, Agbado, Lagos since the 28th of September, 2011 till date by servants, agents, men and officers of the 2nd Respondent without any Court order or injunction is a clear contravention of the Rule of Law wholly violative of the Applicants’ Constitutional right to peaceful co-existence and of their right to property and therefore illegal and void.
4. An Order of injunction compelling the

Respondents either by themselves, their servants, agents, assigns, privies and/or successors to re-open forthwith the Applicants’ Hospital premises located at 126, Olusegun Osoba Road, Agbado, Lagos which was locked up by men and officers of the Respondents herein.
5. An Order of injunction mandating the Respondents either by themselves, their servants, agents, assigns, privies and/or successors to withdraw forthwith armed personnel stationed in the Applicants’ Hospital premises located at 126, Olusegun Osoba Road, Agbado, Lagos by the Respondents herein.
6. An Order of Perpetual Injunction restraining the Respondents either by themselves, their servants, agents, assigns, privies and/or successors from entering into the Applicants’ Hospital premises located at 126, Olusegun Osoba Road, Agbado, Lagos or from further attempting to lock up or close or seal by whatever means the Applicants properties or disturb the quiet and peaceful enjoyment of the Applicants business premises located at 126, Olusegun Osoba Road, Agbado, Lagos
7. An Order mandating the Respondents herein to write and furnish the Applicants with a letter of

Apology.
8. Aggravated & Exemplary damages in the sum of N50 Million Naira (Fifty Million Naira) for the unlawful invasion and wanton closure of the Applicants’ businesses premises (hospital) by the Respondents being a clear breach of unconstitutional and a flagrant abuse of the Applicants Fundamental Human Rights as protected and guaranteed by the provisions of the Constitution of the Federal Republic of Nigeria, 1999 and of the African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act, Cap. 10 Laws of Federation of Nigeria 1990.
AND any other or further Orders as this Honourable Court may deem fit to make in the circumstance.”

The Originating Motion was supported by a 25 paragraphed affidavit and several exhibits. The 2nd Respondent filed a 20 paragraphed counter affidavit with several documents attached thereto. The Appellants filed a further and better affidavit accompanied with some documents to which the 2nd Respondent responded by filing a further counter affidavit with some documents attached thereto.

After the hearing of arguments of both Counsel to the Appellants and that of the 2nd

Respondent, the learned trial judge dismissed the application and awarded costs in favour of the 2nd Respondent. He held as follows at page 102 of the record as follows:
“It is my view that the Applicants have not established their case as required by law. Accordingly, the issue raised for determination is resolved against the Applicants. I hold that they are not entitled to any of the reliefs sought.
In the result, this action fails for lacking in merit and it is hereby dismissed in its entirety with cost of N5,000.0 awarded in favour of the 2nd Respondent.”

Aggrieved by the decision of the learned trial judge, the Appellants filed a Notice of Appeal on 5th of April 2012. See pages 103 – 105 of the Record. The Record of Appeal transmitted on 21/1/13 was deemed as properly transmitted on 7/2/17. The Appellants Brief of Argument was filed on 22nd March 2017. The 2nd Respondent Brief of Argument filed on 8th of November 2018 was deemed as properly filed on 8th May 2019. The Appellants filed a reply Brief on the 8th of May 2019. The 1st Respondent did not file a counter affidavit before the lower Court and did not file any brief

of argument in this Court.

At the hearing of this appeal on 27th of February 2020, learned counsel for the Appellants adopted both the Appellants Brief of Argument and the reply Brief as his oral arguments and urged us to allow the appeal. Learned Counsel to the 2nd Respondent adopted the 2nd Respondent’s Brief of Argument as his argument in opposition and urged us to dismiss the appeal.

Learned Counsel to the Appellant in the Appellants Brief of Argument formulated the following issues for determination:
1. Whether having regards to the circumstances of this case, the learned trial judge was right in holding that the 2nd Respondent acted within the confines of the law as the 2nd Applicant is located at the boundary of Lagos and Ogun State having held earlier that it is not in dispute that the Appellants Hospital is located in Lagos State.
2. Whether having regard to the circumstances of this case, the learned trial judge was right in holding that the deposition contained in the Appellants affidavit that they have always been remitting their tax liability to the Lagos State Government Internal Revenue Services is supported by any

documentary evidence.
3. Whether the reliance on Exhibits J and J1 by the learned trial judge to hold that the business premise of Appellants was not closed to business transaction is justified despite the fact that the said exhibits were produced during the pendency of the fundamental right application by the 2nd Respondent.

Learned Counsel to the 2nd Respondent in the 2nd Respondent’s Brief of Argument formulated a sole issue for determination which he submitted covers grounds 1, 2, 3 and 5 of the Grounds of Appeal and a sufficient response to the Appellants Issues 1 and 2.
The Issue is:
“Whether the Respondents acts, claiming to be an enforcement of law against the Appellants amounted to an infringement or breach of the Appellants fundamental rights as alleged.”

Upon a careful perusal of the record and the issues formulated by parties it is clear that the complaint of the Appellants in the main is on the power of the 2nd Respondent to levy distress on their premises for failure to pay tax. I agree with learned counsel to the 2nd Respondent that the sole issue formulated by him cover issues 1 and 2 formulated on

behalf of the Appellants.

I shall therefore resolve this appeal based on the following two issues:
1) Whether act of the Respondents claiming it to be an enforcement of law against the Appellants amounted to an infringement or breach of the Appellants fundamental rights as alleged.
2) Whether the reliance on Exhibits J and J1 by the learned trial judge to hold that the business premises of the Appellants was not closed for business is justified despite the fact that the said exhibits were produced during the pendency of the fundamental right application by the 2nd Respondent.

ISSUE 1
Arguing this issue under his issues One and Two, learned counsel to the Appellants submitted that parties are on common ground that the 1st Appellant is located in Lagos. He further stated that there is evidence before the lower Court that the 1st Appellant remitted its tax as at when due to the Lagos State Internal Revenue. He then submitted that the Appellants not been resident in Ogun State are not subject to the tax regime of the 2nd Respondent. He argued further that there was no evidence before the lower Court that the employees of the 1st Respondent

were resident in Ogun State. He pointed out the Appellants deposed in their further and better affidavit that their employees were resident in Lagos State which fact he said was not controverted by the 2nd Respondent. He contended that the duties of the 2nd Respondent is restricted to individuals resident in Ogun State and they had no powers to enforce payment of tax on the 1st Appellant and its employees. He submitted further that the act of the 2nd Respondent in invading and closing down the hospital facility of the Appellants was a violation of their rights.

Learned Counsel to the Appellant further argued that the lower Court failed to consider all evidence placed before it as required by law before arriving at its decision. He submitted the lower Court failed to consider Exhibits B1 – B7 which are evidence of Appellants remittance of tax to Lagos State Internal Revenue Service. He relied on the cases of ANYANWU VS. UZOWUAKA (2009) 13 NWLR (PT. 1159) 445 AT 468 PARAS A – D; C.D.C. (NIG.) LTD. VS. SCOA (NIG.) LTD. (2007) 6 NWLR (PT. 1030) 300 AT 366 PARAS G – H; S.C.C. VS. ANYA (2012) 9 NWLR (PT. 1305) 213 AT 232; BASSIL VS. FAJEBE

(2001) 11 NWLR (PT. 725) and MOGAJI VS. ODOFIN (1978) 4 SC 91 and urged us to hold that the decision of the lower Court was perverse.

He further urged us to hold that the lower Court erred in law when it held that the 2nd Respondent acted within the confines of the law when it locked up the premises of the Appellants. He urged us to allow the appeal and grant the reliefs sought by the Appellants.

Arguing per contra, learned counsel to the 2nd Respondent submitted that the 2nd Respondent acted within its powers under the Personal Income Tax Act 1993 when it locked up the premises of the Appellants. He submitted that the employees of the Appellants were subject to the authority of the 2nd Respondent being residents of Ogun State. He argued that the Personal Income Tax of the 2nd Appellant and other employees of the 1st Appellant should be paid to the 2nd Respondent in accordance with Section 2(2) of the Personal Income Tax Act. He referred us to Exhibit A attached to the 2nd Respondent’s Counter Affidavit and urged us to hold the affected employees were resident in Ogun State and within the territorial jurisdiction of the 2nd Respondent. He

submitted further that the 2nd Respondent took all the steps required of it under the Personal Income Tax Law before it exercised its powers under the law to lock up the premises of the Appellants. He urged us to so hold and dismiss this appeal.

It is pertinent at this stage to state albeit briefly the background facts of this case. On the 28th of September 2011, the 2nd Respondent invaded and locked up the premises of the 1st Appellant a health institution registered with the Lagos State Private Hospital Registration Authority and managed by the 2nd Appellant. Prior to the invasion and locking up, the 2nd Respondent had persistently demanded that the Appellants pay their tax liability to the 2nd Respondent. The Appellants in response consistently maintained its liability was to the Lagos State Internal Revenue Service. It is the failure of the Appellants to accede to the demand of the 2nd Respondent that led to the incident of 28th September 2011 upon which the Appellants filed the Originating Motion for enforcement of Fundamental Rights the subject of the instant appeal. The complaint of the Appellant is well captured at pages 92 – 93 of the

Record where the learned trial judge stated as follows:
“On 28th September, 2011, the Appellants stated that is in a marauding manner, the men and officers of the Ogun State Internal Revenue Task Force being a Unit of the 2nd Respondent led by one Mr Okere invaded their hospital premises with a lorry load of policemen and armed personnel took possession of the hospital premises and shut down the hospital facility. They claimed that their officials were chased out and the gate leading to their premises locked, thereby disrupting their business. They stated that they have not been able to carry on their business as they used to as they are unable to have access to their facility, patients, ambulance and the ward in the premises. It was deposed that the illegal closure of their premises has not only affected their daily income and revenue but has maligned and rubbished their image and goodwill.”

The crux of the complaint of the Appellant is the alleged breach of their constitutionally preserved right to privacy, personal liberty, freedom of movement and right to property. They claim that the 2nd Respondent breached their fundamental rights.

rights above were breached by the 2nd Respondent. It should however be noted that fundamental rights are not absolute. See Section 44(2)(a) of 1999 Constitution (supra) which provides as follows:
“(2) Nothing in subsection (1) of this Section shall be construed as affecting any general law:-
(a) For the imposition or enforcement of any tax, rate or duty”.
Furthermore, the right to freedom of movement is subject to the procedure permitted by law for the purpose of bringing a person before a Court of law or in execution of a Court order. See Section 35 of the 1999 Constitution (supra) and the cases of KALU VS. FEDERAL REPUBLIC OF NIGERIA (2016) 9 NWLR (PT. 1516) 1; HASSAN VS. ECONOMIC AND FINANCIAL CRIMES COMMISSION (2014) 1 NWLR (PT. 1389) 607; DANGABAR VS. FEDERAL REPUBLIC OF NIGERIA 2014) 12 NWLR (PT. 1422) 575.
It follows therefore that in the determination of whether the 2nd Respondent violated the fundamental Rights of the Appellants, a consideration of whether or not it acted within the ambits of the law becomes imperative. The position of the 2nd Respondent is that it followed due process of law prior to levying distress

against the Appellants.

For the purpose of determining whether the 2nd Respondent followed due process of law, the Personal Income Tax Act 1993 (PITA 1993) will be applicable. Even though the Personal Income Tax Act has undergone several amendments since the cause of action in the instant appeal arose, the law is settled that the law relevant and applicable in the determination of a matter is the law in force at the time the cause of action arose. See OKONKWO & ORS VS. OKONKWO & ORS. (2010) 14 NWLR (PT. 1213) 228; ADAH VS. NYSC (2004) 13 NWLR (PT. 891) 639; OBIUWEUBI VS. CENTRAL BANK OF NIGERIA (2011) 7 NWLR (PT. 1247) 465; SHELL PETROLEUM DEVELOPMENT CORPORATION VS. ANARO & ORS. (2015) 12 NWLR (PT. 1472) 122. The applicable law is the Personal Income Tax Act 1993.

Under the Personal Income Tax Act 1993, an employer is answerable for the purpose of deducting tax payable from the emoluments of his employee. See Section 82 of the Act which provides as follows:

“An employer required under a provision of this Act to make deductions from emoluments or amounts on account of emoluments paid by him to an employee shall account to the

relevant tax authority in such manner as the relevant tax authority may prescribe for the deductions so made, and in the event of failure by the employer to make the deduction, or properly to account therefore the amount thereof together with a penalty of 10 percent per annum of the amount plus interest at the prevailing commercial rate shall be recoverable as a debt due by the employer to the relevant tax authority”.
Where a taxable person who has been properly served with an assessment which has become final and conclusive as well as a demand note fails to make payment within the time specified, the relevant tax authority may distrain the tax payer by his goods, other chattels, bond or other security. See Section 104(1)(a) and (b) of the PITA 1993. This is the fulcrum of the defence of the 2nd Respondent. The 2nd Respondent claim that having served the Appellants with the final and conclusive assessment and demand notice it is entitled to distrain the 1st Appellant’s premises. The Appellants on the other hand argue that the 2nd Respondent went beyond its bound and stepped outside its territorial jurisdiction of enforcement of tax payment

since the Appellants are resident in Lagos State and not Ogun State.
There is no gain saying that the issue of residence is very important for the purpose of payment of Personal Income Tax. Individual employees have an obligation to pay such tax in their respective states of residence. The tax authority of the state where an individual is resident is the relevant tax authority for the purpose of assessment and remittance of Personal Income Tax. In the case of ECODRILL (NIG.) LTD. VS. AKWA IBOM BOARD OF INTERNAL REVENUE (2015) 11 NWLR (PT. 1470) 303 AT 336, PARAS C-F; Nweze JCA (as he then was) held thus:
“In Nigeria’s tax jurisprudence, the basis for the imposition and or collection of Personal Income Tax are two-fold; “residence” and “source”. This is concerned only with the former, that is residence.
Under our tax law regime, one of the basis of tax liability on the part of a tax payer and the power of an appropriate tax authority to collect personal income tax is “residence”.
Simply put, the principle of residence relates primarily to the existence of sufficient connection between a

relevant tax authority and a taxable person. It is shown that a tax payer resides in any state in Nigeria, that States Board of Internal Revenue is the appropriate authority conferred with the power to collect Personal Income Tax from such tax payers, i. e. resident tax payers, are expected to give account of their worldwide earnings to the State Tax Authority”.
It follows therefore that a resolution of the residency of the employees of the Appellants is germane in the determination of whether the 2nd Respondent is the relevant tax authority to collect their Personal Income Tax.
The First Schedule to PITA (supra) defines “place of residence” to mean a place available for his domestic use in Nigeria on a relevant day and does not include any hotel, rest house, or other place at which he is temporarily lodging unless no permanent place is available for his use on that day.
The Appellants in Paragraph 5 of their further and better affidavit deposed as follows:
“5. That I am informed by the medical Director of the Applicant by name Dr. Samuel Olanrewaju Bandanki (2nd Applicant) and that I verily believe him that none of

the Applicants workers including the Medical Director resides in Ogun State rather they (staffs) all reside in Lagos State.
The 2nd Respondent filed a counter affidavit and further counter affidavit. I have carefully perused both affidavits. There is nothing therein to contradict the above and also prove that the Appellants’ employees for which the 2nd Respondent sought to enforce payment of tax reside in Ogun State for the years of assessment in question.
Section 2(2) PITA (supra) provides as follows:
“In the case of an individual other than an itinerant worker and persons covered under paragraph (b) or subsection (1) of this Section, tax for any year of assessment may be imposed only by the State in which the individual is deemed to be resident for that year under the provisions of the First Schedule to this Act and in the case of persons referred to in subsection (1)(b) or this Section, tax shall be imposed by the Federal Board of internal Revenue”.
The above provision is very clear. It is that tax may be imposed by the State Government of the State in which an individual is resident for the year of assessment. The

question now is whether there is any evidence on record that the employees of the Appellants reside in Ogun State? There is none. It follows therefore that the 2nd Respondent is not the relevant tax authority to which the Appellants may remit tax deduction from emoluments of their employees and I so hold.
There is uncontroverted evidence that the 1st Appellant is situate in Lagos State. Parties are ad idem on this point. The lower Court also made that finding. Furthermore, a corporation sole like the 1st Appellant is deemed resident for a year of assessment in the territory in which its principal office in Nigeria is situated. See Item 9 of the First Schedule to PITA (supra).
The 2nd Respondent is the Internal Revenue Service, Ogun State. Does its territorial jurisdiction extend to Lagos State? I do not think so. It does not.
There is also evidence before the lower Court that the Appellants have always remitted their tax to the Lagos State Internal Revenue Service. See Exhibits B1 – B7 attached to the affidavit in support of the Appellants’ Originating Summons.
It is clear beyond any peradventure that the Appellants had no

obligation to remit their tax to the 2nd respondent. Their obligation was to Lagos State. The 2nd Respondent acted ultra vires its powers when it disdained the property of the 1st Appellant situate in Lagos outside its jurisdiction. That it followed the laid down procedure under its laws is of no moment. The point is that the Appellants were not under its jurisdiction. It follows therefore that the 2nd Respondent did not act within the confines of the law when it violated the constitutionally preserved right of the Appellants when it levied distress against the 1st Appellant’s premises situate in Lagos State and I so hold.
ISSUE NO. 1 is thus resolved in favour of the Appellants.

ISSUE 2
Whether the reliance on Exhibits J and J1 by the learned trial judge to hold that the business premises of the Appellants was not closed for business is justified despite the fact that the said exhibits were produced during the pendency of the fundamental right application by the 2nd Respondent.
This issue was argued as Issue 3 by the Appellants. It was adopted by the 2nd Respondent who responded to it as Issue 2.

Learned Counsel to the Appellants argued that the lower Court was wrong when it relied on Exhibit J and J1 to hold that the business premises was not closed for business by the 2nd Respondent.

For his part, learned Counsel to the 2nd Respondent argued that Exhibit J and J1 were tendered only to show that the hospital of the Appellants was not completely shut down and as such not a ratio decidendi of the learned trial judge and was not therefore a principle or rule of law on which the judgment of the lower Court was based.
The law is trite that a ground of appeal must arise from the decision against which the appeal lies. It should also constitute a challenge to the validity of the ratio of the decision. See K.R.K. HOLDINGS (NIG.) LTD. VS. FIRST BANK OF NIGERIA & ANOR. (2017) 3 NWLR (PT. 1552) 326; OMISORE & ANOR. VS. AREGBESOLA & ORS. (2015) 15 NWLR (PT. 1482) 205; WAGBATSOMA VS. FEDERAL REPUBLIC OF NIGERIA (2018) 8 NWLR (PT. 1621) 199 AND KLM.
Ratio decidendi is the principle of law upon which a particular case is decided. See ADESOKAN & ORS VS. ADETUNJI & ORS (1994) 5 NWLR (PT. 346) 540; SAVANNAH BANK (NIG) LTD. VS. P.A.S.T.A (1987) 1 SC 198 AND

N.A.B. LTD. VS. B. ENG. (NIG.) LTD. (1995) 8 NWLR (PT. 413) 257.
In A.I.C. LTD. VS. NNPC (2005) 11 NWLR (PT. 937) 563, Edozie JSC held thus:
“The ratio decidendi of a case represents the reasoning or principle or ground upon which a case is decided. Obiter simply means in passing, incidental, cursory. Obiter reflect inter alia, the opinion of the judge which do not embody the resolution of the Court. The expression of a judge in a judgment must be taken with reference to the facts of the case which he is deciding, the issues calling for decision and answers to those issues. These are what should be looked for in any judgment. The manner in which the judge chooses to argue the case is not all important things. Rather it is the principle he is deciding. See U.T.C. NIG. LTD. VS PAMOTEI (1989) 2 NWLR (PT. 103) 244”.
The learned trial judge in his judgment at page 97 held thus:
“Turning to the merit of the case, I must state from the onset that the facts of this case are not in themselves complicated. By virtue of the provisions of Section 46 of the 1999 Constitution any person who alleges that any of his fundamental rights

provided for in Chapter IV of the 1999 Constitution has been, is being or likely to be contravened in any state may apply to a High Court in that State for a redress. The complaint of the Applicants in this case is that the Respondents infringed on their fundamental rights when men and officers of 2nd Respondent accompanied by armed personal allegedly invaded their premises on 28th September 2011 and closed down their premises thereby disturbing their premises.”
The learned trial judge while resolving the issue held at page 98 of the record as follows:
“However, contrary to the allegation made by the Applicants that the hospital facilities were completely shut down thereby paralyzing the business activities of the Applicants, the respondent has established to the satisfaction of the Court that the hospital was not completely shut down. A patient sent to the hospital on 19th of January 2012 was attended to and issued with a referral to Jule Diagnostic centre. See Exhibits J and J1 (Hospital Card and Referral paper) attached to the further counter affidavit of the 2nd respondent. The exhibits belie the deposition of the Applicants that

members of their staff were chased out of the hospital premises in a Gestapo manner. The photographs attached as Exhibits D and G to the Applicants’ affidavits also support the claim of the 2nd Respondent that the entire premises was not put under lock and key and that the pedestrian gate was left open for egress and ingress into the hospital by both the staff and patients.”
It is clear from all of the above that the fact of the level of access to the hospital after it was locked by the 2nd Respondent was part of the issues considered by the trial judge in arriving at his conclusion. Exhibit J and J1 were placed before the Court by the 2nd Respondent to prove that access to the hospital was not completely blocked. Parties joined issues on this point. I am of the firm view that Ground 5 and this Issue distilled therefrom constitute a challenge to the ratio decidendi of the decision of the lower Court and I so hold.

Section 83(3) of the Evidence Act 2011 provides as follows:
“Nothing in this Section shall render admissible as evidence any statement made by a person interested at a time when proceedings were pending or anticipated

involved a dispute as to any fact which the statement might tend to establish.”
For the above provision to be applicable in the instant appeal, Exhibit J and J1 must have been made by a party to the litigation or by a person interested in the outcome of the proceedings. A person performing an act in his official capacity will not be deemed to be a person interested within the meaning of Section 83(3) of the Evidence Act. An interested person is a person who has pecuniary or other material interest in the result of the proceedings and whose interest is affected by the result of the proceedings. See NIGERIA SOCIAL INSURANCE TRUST VS. KLIFCO NIGERIA LTD. (2010 13 NWLR (PT. 1211) 307; B.B.APUGO & SONS LTD. VS. O.H.M.B. (2016) 13 NWLR (PT. 1529) 206.
In HIGHGRADE MARITIME SERVICES LIMITED VS. FIRST BANK OF NIGERIA LTD. (1991) 1 NWLR (PT. 167) 290, Karibi-Whyte, JSC held thus:
“The nature of the disqualifying interest will depend upon the nature of duty undertaken by the servant. Where from the nature of the duty he can be relied upon to speak the truth and that he will not be adversely affected thereby the document has always been

admitted in evidence. This is because the rational of the provision is that he must be a “person who has no temptation to depart from the truth on one side or the other – a person not swayed by personal interest, but completely detached judicial impartial, independent.”
Exhibits J and J1 in my view does not fall within the purview of Section 83(3) of the Evidence Act and I so hold.
This Issue is resolved against the Appellant.

Even though one of the issues is resolved against the Appellant, there is merit in this appeal and it is allowed. The subject of this appeal in the main is whether the 2nd Respondent breached the Fundamental Rights of the Appellants protected and guaranteed by the Constitution of the Federal Republic of Nigeria, 1999 and the African Charter on Human Peoples’ Rights (Ratification and Enforcement) Act. The distrain of Appellants’ hospital facility between 28th of September, 2011 and 12th of December 2011 constitute an unlawful invasion of the said premises and a violation of the fundamental rights of the Appellants and I so hold.

The Appellants in the Originating Motion filed at the lower Court

for the enforcement of their fundamental rights and for aggravated and exemplary damages of 50 Million Naira.

of damages on the other hand is an amount that would reflect what would put the injured party in the same position as he would have been had the injury not occurred.”
Damages are generally not punitive in nature. A claim for exemplary damages however project the award of damages geared towards punishing a defendant for his actions. They are awarded to punish the defendant. They are awarded in action rooted in tort and are generally not recoverable in cases of breach of contract except in cases of breach of promise to marry.
The three categories of actions in tort in which exemplary damages may be awarded are:
1) Oppressive, arbitrary or unconstitutional action by the servants of the Government. See ROOKES VS. BARNARD (1964) AC 1129 AT 1223 AND 1224.
2) Where the defendant’s conduct has been calculated by him to make a profit of himself which may well exceed the compensation payable to the plaintiff.
3) Where exemplary damages are expressly authorised by Statute.
In MEKWUNYE VS. EMIRATES AIRLINES (2019) 9 NWLR (PT. 1677) 191 AT 225 PARAS C-E, Peter-Odilli JSC held thus:
“On what amounts to punitive or

exemplary damages, this was dealt with by the Court in the case of ODIBA VS. AZEGE (1998) LPELR – 2215 (SC) AT PAGE 25, (1988) 9 NWLR (PT. 566) 370 thus:
“Exemplary damages in particular, also known as punitive or vindictive damages can apply only where the conduct of the defendant merits punishment, and this may be considered to be so where such conduct is wanton, as where it discloses fraud, malice, cruelty, insolence or the like, or where he acts in contumelious disregard of the Plaintiff’s rights. But exemplary damages to some extent are distinct from aggravated damages whereby the motives and conduct of the defendant aggravating the injury to the plaintiff would be taken into consideration in the assessment of compensatory damages” Per Iguh, JSC.”
Exemplary damages are awarded to punish the defendant for being high handed. General damages are losses which flow naturally from the defendants act.

Relief No.8 in the Appellants Motion for enforcement of his Fundamental Right is as follows:
“8. Aggravated & Exemplary damages in the sum of N50 Million Naira (Fifty Million Naira) for the unlawful

invasion and wanton closure of the Applicants’ businesses premises (hospital) by the Respondents being a clear breach of unconstitutional and a flagrant abuse of the Applicants Fundamental Human Rights as protected and guaranteed by the provisions of the Constitution of the Federal Republic of Nigeria, 1999 and the African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act, Cap. 10 Laws of Federation of Nigeria 1990.

I have gone through the affidavits in support of the Motion and the Counter Affidavit filed by the Respondents at the lower Court and I cannot find any act of the Respondent oppressive to justify the award of exemplary and aggravated damages against them. While the Appellants is entitled to damages for breach of his fundamental rights, he has not shown that he is entitled to aggravated and exemplary damages.

In conclusion, I find merit in this appeal. The decision of the Ogun State High Court in SUIT NOS.M/175/2011 delivered on 5th of March, 2012 is hereby set side. I order that the 2nd Respondent furnish a written letter of apology to the Appellant for the breach of his fundamental rights and award

damages in the sum of One Million Naira to be paid by the 2nd Respondent to the Appellant for the breach of his fundamental right.

JIMI OLUKAYODE BADA, J.C.A.: I had the advantage of reading in draft the lead Judgment of my Lord, FOLASADE AYODEJI OJO, J.C.A., just delivered.

My Lord has dealt with the issue in this appeal adequately and I agree entirely with the reasons given as well as the conclusion that there is merit in this appeal.

Having also read the record of appeal and the briefs of argument filed and exchanged by the parties in this appeal, I will like to emphasise the point that this country Nigeria is no more under Military Regime. We are operating Democratic System where actions of the Government, its agencies and individuals are expected to be flawless and civilized. The Courts are available to guard Fundamental Rights Provision very jealously and any action that is perpetrated against the Provisions of the Fundamental Rights of any individual which is against the spirit of the 1999 Constitution of the Federal Republic of Nigeria (as amended) would not be allowed to stand
Any breach of the Fundamental Rights Provisions

renders any act subsequent to that breach a nullity.
See – KWARA STATE JUDICIAL SERVICE COMMISSION (2009) LPELR – 8375 PAGE 1 AT 52-53.
In the circumstance, the action of the 2nd Respondent when it levied distress against the 1st Appellant’s premises situate in Lagos State is a violation of the Constitutionally preserved Rights of the Appellants.
Consequent upon the foregoing and in view of the detailed reasons contained in the lead Judgment, I also allow the appeal.
I abide be the consequential orders made in the said lead Judgment.

HARUNA SIMON TSAMMANI, J.C.A.: I read in advance, a draft of the judgment just delivered by my learned brother, Folasade Ayodeji Ojo, JCA. I agree with the reasoning and conclusion of my learned brother that this appeal should not be dismissed, it having merit.

It was determined by this Court, per Nweze, JCA (as he then was) in the case of Ecodrill Nig. Ltd v. Akwa Ibom Board of Internal Revenue(2015) 11 NWLR (pt.1470) 303, that, the basis for collection of personal income tax in Nigeria are two-fold; to Wit: “residence” and “source”. In the instant case, the 2nd Respondent purported to impose

personal income tax on the Appellant, presumably, on the basis of “residence”. However, the evidence as disclosed in the various affidavits of the parties, disclosed that, neither the 1st Appellant nor its employees are resident in Ogun State. The evidence proved that they are resident in Lagos State. The 2nd Respondent therefore erred grievously when it invaded and sealed-off the business premises of the Appellants on the erroneous belief that it was entitled to impose personal income tax on the Appellant.
I therefore agree with my learned brother that this appeal has merit.

It is accordingly allowed. I abide by the consequential order(s) made by my learned brother including the award of the sum of One Million Naira (N1m) as damages for the breach of the Appellants’ Fundamental Rights.

Appearances:

CHUKWUYEM ATEWE For Appellant(s)

A. OYEFULE for the 1ST RESPONDENT

T. O. SOKUNBI with B. A. GEORGE for the 2ND RESPONDENT For Respondent(s)