MODIBBO ADAMA UNIVERSITY v. ADAMAWA STATE BOARD OF INTERNAL REVENUE & ANOR
(2019)LCN/12621(CA)
In The Court of Appeal of Nigeria
On Thursday, the 31st day of January, 2019
CA/YL/74/2018
RATIO
ACTION: PROCEDURE OF ORIGINATING SUMMONS
“A resort will be had to the procedure by Originating Summons to commence action in circumstances where issues or question involved in the case are simple and straight framed and devoid of any serious dispute as to facts hence this procedure is available to any person claiming interest under a deed, will or other written instrument. It is a procedure where the evidence in the main is by way of documents and there is no serious dispute as to their existence in the dealing of the parties to the suit see: Famfa Oil Ltd Vs Attorney General, Federation (2003) 18 NWLR (Pt. 852) …; Doherty Vs. Doherty (1969) NMLR 24; PDP Vs. Abubakar (2007) 3 NWLR (Pt. 1022) 515, 544.” PER SAIDU TANKO HUSSAINI, J.C.A.
JUSTICES
OYEBISI FOLAYEMI OMOLEYE Justice of The Court of Appeal of Nigeria
JAMES SHEHU ABIRIYI Justice of The Court of Appeal of Nigeria
SAIDU TANKO HUSSAINI Justice of The Court of Appeal of Nigeria
Between
MODIBBO ADAMA UNIVERSITY
(MAUTECH) Appellant(s)
AND
1. ADAMAWA STATE BOARD OF INTERNAL REVENUE
2. THE GOVERNOR OF ADAMAWA STATE Respondent(s)
SAIDU TANKO HUSSAINI, J.C.A. (Delivering the Leading Judgment):
This appeal is against the Judgment of the High Court of Justice of Adamawa State delivered on the 25th April, 2018 in Suit No. ADSY/101/2017. The 1st respondent was the plaintiff at the said High Curt. As a Statutory Body, it is vested with the powers to administer, assess and collect all taxes owed to the Government of Adamawa State hence the plaintiff sometime in January, 2014 initiated action by way of the Writ of Summons and the Statement of claim directed on the Appellant as defendant in Suit No. ADSY/2/2014 wherein the plaintiff claim against the defendant (appellant) the payment of:
(i) The sum of N460,060,823.18 being outstanding PAYE under deduction from the defendant’s employee for the period 2008-2010.
(ii) The sum of N46,006,082.39 being 10% statutory penalty per Annum in the above sum claim.
(iii) The sum of N96,612, 772.87 being statutory interest of 21% at the prevailing commercial bank lauding rate on the amount claimed in clause (i) above, and
(iv) The cost of this suit.
The Writ of Summons and the Statement of claim were also accompanied with the Motion for Summary Judgment against the appellant. Refer to pages 24-54 of the record of Appeal. The Originating Process referred to above were duly served on the appellant.
Sometimes in July 2014, precisely, on the 30th July, 2014, the 2nd respondent caused to be written a letter to the appellant of the approval of the waiver of arrears of 2008-2010 PAYE tax owed the Adamawa State Board for Internal Revenue that is, the 1st respondent.
Consequent upon this development, the 1st respondent as plaintiff by that action discontinued further action, hence the trial Court struck out Suit No. ADSY/2/2014 on the 20th September, 2014 at the sitting of the Court on the same date. See page 58 of the record.
It appeared that the 1st respondent was not done with the matter. They returned to Court, this time by way of the application for Originating Summons dated and filed on the 28th July, 2017 wherein they claim for the nullification of tax waiver and the recovery of outstanding tax liability. Hence the 1st respondent as plaintiff in Suit No. ADSY/101/2017 sought for the determination of 4(four) questions namely:-
1. Having regard to Section 59(1) of the Adamawa State Board of Internal Revenue Law, 2007 and Section 80 of the Personal Income Tax Act, 2004, whether The Executive Governor of Adamawa State (sued as the 2nd Defendant) is legally empowered to grant the 1st Defendant a waiver of outstanding tax liability which was already a subject matter of judicial proceedings for the recovery of same.
2. If the answer to issue (1) above is in the negative, whether the purported waiver by the 2nd Defendant of the 1st Defendant’s tax liability in the sum of N460, 006, 082.39 (Four Hundred and Sixty Million, Six Thousand and Eighty?Two Naira Thirty-nine Kobo) only covering the period between 2008-2010 during the pendency of a judicial action to recover same was null and void and of no legal effect.
3. Whether the 2nd Defendant’s letter with ref No. SGS. 12/68/VOL.I/690 and dated 30th July, 2014 issued on its behalf by the secretary to the Government of Adamawa State which conveyed the purported approval of a waiver by the 2nd Defendant of the 1st Defendant outstanding tax liability for the period covering 2008-2010 ought not to be set aside as it offends the express and unambiguous provision of Section 59(1) of the Adamawa State Board of Internal Revenue Law, 2007.
4. In the event that question (1), (2) and (3) above are resolved in favour of the Plaintiff and against the Defendant jointly and severally, whether the justice of this suit does not demand the refund by the 1st defendant to the plaintiff of the full value of the purportedly waived sum, especially where such retention of the sum of N460, 006,082.39 (Four Hundred and Six Million, Six Thousand and Eighty-Two Naira Thirty-Nine-Kobo) only would amount to taken unjustifiable benefit from acts found and declared to constitute manifest illegality
Peradventure, the Court found in her favour, the 1st respondent as plaintiff, prayed the trial Court for declaration and other reliefs as follows:
1. A DECLARATION that the purported waiver by the 2nd Defendant of the 1st Defendant?s outstanding tax liability for 2008-2010 in the sum of N460,006,082.39 (Four Hundred and Sixty Million, Six Thousand and Eighty-Two Naira Thirty-Nine-Kobo) only which is the subject matter of the 2nd Defendant?s letter Ref No. SGS12/68/VOL.I/690 dated 30 July, 2014 is manifestly illegal, null and void and of no legal effect.
2. AN ORDER of this Honourable Court setting aside the 2nd Defendant?s letter with Ref No. SGS. 1268/VOL.I/690/dated July, 2014 as same is illegal ab initio and of no legal consequence.
3. AN ORDER of this Honourable Court directing the 1st Defendant to pay to the Plaintiff forthwith its undisputed outstanding tax liable covering the period between 2008-2010 in the sum of N460,006,082.39 (Four Hundred and Sixty Million, Six Thousand and Eighty-Two Naira Thirty-nine Kobo) Only being the pay As You Earn (PAYE) tax liability which is due from the Defendant?s employees and which debt has remain unpaid despite several demand notices.
4. 10% PENALTY per annum being statutory penalty on the outstanding tax obligation of the 1st defendant from theof default and until full and final liquidation same.
5. 15% INTEREST (or any higher percent) per annum being statutory interest on the outstanding tax obligation of the 1st defendant from the date of default and until full and final liquidation same.
6. COST OF THIS ACTION in the sum of 5, 000, 000, 00K (Five Million Naira only).
In the affidavit of 34 paragraphs deposed to by one Linus Bakari a member of staff with the 1st respondent in support of the Originating Summons, are several documents attached or annexed and marked Exhibits A to N and these documents are self-explanatory. They speak for themselves.
In response to the Originating Summons the appellant, the 1st defendant at the trial Court filed a counter-affidavit of 21 paragraphs to which is annexed the document, marked Exhibit ‘A’. The learned trial High Court took final submissions of counsel and in the considered Judgment delivered on the 25th April, 2018, the Court found for the 1st respondent as plaintiff, granting the claims in terms of the reliefs itemized at pages 152-153 of the record of appeal.
The appellant undoubtedly not happy with the Judgment lodged his appeal to this Court vide the Notice of Appeal dated 21st May, 2018 with 9 (Nine) grounds of Appeal. On this point see pages 155-161 of the record of Appeal transmitted on the 13th June, 2018 to this Court.
Briefs of argument were filed and exchanged between counsel. In the brief dated and filed on the 12th July, 2018, the appellant raised 4(four) issues from 9 (Nine) grounds of Appeal, namely:-
1. Whether the suit of 1st Respondent is not incompetent in view of the joinder of the 2nd Respondent and non-joinder of tax payers whose taxes are in issue in this matter. (Distilled from grounds 2, 3 and 4 of the notice of appeal).
2. Whether the 1st Respondent is not estopped from bringing the present action in view of the waiver granted to the Appellant by the 2nd Respondent in 2014. (Distilled from Ground 9 of the Notice Appeal).
3. Whether the learned trial judge was right in holding that the suit of the 1st Respondent is not an abuse of Court process in view of the existence of suit number ADSY/102/2017 before the same Court at the time. (Distilled from Ground 5 of the Notice of Appeal).
4. Whether the action of the 1st Respondent ought not to be dismissed. (Ground 1, 6, 7 and 8 of the Notice of Appeal).
The appellant further filed a Reply brief upon the Respondent brief of argument being served. In response to appellant’s brief of argument, the 1st respondent filed:
(i) 1st Respondent’s Notice of Preliminary Objection on the 3rd October, 2018.
(ii) 1st Respondent’s Notice of contention that Judgment should be affirmed on Grounds other than those relied on by the Court below. The said Notice filed on the 3rd October, 2018 was deemed on 4th October, 2018.
(iii) The 1st Respondent’s brief of argument filed on 3rd October, 2018 and was deemed on the 4th October, 2018. In it the 1st respondent formulated 3 (three) issues at page 11 of the brief namely: –
1. Whether the decision appealed herein was against the weight of evidence adduced before the Court below.
2. Whether the Court below rightly assumed jurisdiction in nullifying the remission of the outstanding tax due to the 1st Respondent from the Appellant for the tax years of 2008-2010.
3. Whether this Honourable Court uphold the decision of the Court below and further affirm same upon the additional grounds contained in the Respondent’s Notice.
2nd Respondent did not file any brief.
On the 12th November, 2018 when the appeal came up for hearing, Mr. E.O. Odo led Joseph Williams, Esq., to adopt the brief of argument for the appellant. He urged us to allow the appeal.
Mr. Jude Daniel Odi who appeared as counsel for the 1st Respondent at this point expressed his desire to abandon his Notice of Contention as well as Issue No. 3 in the 1st respondent’s brief of argument.
There being no objection to that application, the Court accordingly struck out 1st respondent’s:
(i) Notice of contention.
(ii) Issue No. 3 in the 1st Respondent’s brief of argument.
No concerted effort was made by counsel for the 1st Respondent to address issues raised or contained in the 1st Respondent’s Notice of Preliminary Objection filed by them on the 3rd October and deemed on the 4th October, 2018.
Learned counsel for the 1st respondent just sat down there, and watched the appellant/counsel argue his appeal. That is not what it should be for a counsel who by his Notice, raised a Preliminary Objection over the hearing of an appeal, must be alert and proactive, he must take the first opportunity to raise his objection in limine when the appeal case is mentioned. That is the essence of a Preliminary Objection. It relegates the main appeal to the background at that material time the Preliminary Objection. It takes the pride of place at least for that moment.
When counsel procrastinate and allows the main appeal to be argued, the right to the heard over the Preliminary Objection is lost as it has become wasted. In those circumstances, the Preliminary objection is deemed abandoned. That was the scenario in this appeal case on the 12th November, 2018 when Mr. Odi let go the opportunity, he had to argue the same. The Preliminary Objection having been abandoned is perforce hereby struck out without much ado. With all the impediments gone, the coast was cleared hence the appeal can now be taken.
As indicated before, parties through their counsel except the 2nd respondent, filed and exchanged their briefs of argument and adopted same at the hearing along with the submissions made under each head. For the avoidance of doubt, issues proposed or identified in the appellant?s brief of argument are as follows:
1. Whether the suit of 1st Respondent is not incompetent in view of the joinder of the 2nd Respondent and non-joinder of tax payers whose taxes are in issue in this matter. (Distilled from grounds 2, 3 and 4 of the notice of appeal).
2. Whether the 1st Respondent is not estopped from bringing the present action in view of the waiver granted to the Appellant by the 2nd Respondent in 2014. (Distilled from Ground 9 of the Notice Appeal).
3. Whether the learned trial judge was right in holding that the suit of the 1st Respondent is not an abuse of Court process in view of the existence of suit number ADSY/102/2017 before the same Court at the time. (Distilled from Ground 5 of the Notice of Appeal).
4. Whether the action of the 1st Respondent ought not to be dismissed. (Ground 1, 6, 7 and 8 of the Notice of Appeal).
Arguing issue No. 1 learned appellant’s counsel submitted that the suit before the trial Court was incompetent by reason of the (i) joinder of the 2nd defendant/respondent as a party, viewed from the background that the 2nd respondent and the 1st respondent both serve same or common purpose hence the two of them cannot appear as adverse party in same suit such as the case on appeal.
Secondly, the non-joinder of the staff of the appellant whose salaries and allowances are being deducted rendered the suit incompetent in their absence as necessary parties to the case.
The case of Green V. Green (1987) 2 NSCC 1115, 1116; Ogunbule V. Adebayo (2006) 2 319, 331 were cited and relied upon. Consequently, the trial Court?s grant of the claim brought before it in absence of necessary parties to the case was not proper.
In relation to appellant’s issue No. 2 it is argued on their behalf that, (i) the plaintiff or 1st respondent and the 2nd respondent are and the same party hence the approval of waiver by the 2nd respondent was binding on plaintiff/1st respondent who both have common or similar interest and can therefore not back out of the approval of waiver granted by the 2nd respondent. That the 1st respondent who, acting on the approval of waiver by the Governor, having discontinued Suit. No. ADSY/2/2014 was estopped from reoppening the case vide the suit now on appeal. He relied on Attorney General Rivers V. Attorney General Akwa Ibom State (2011) 8 NWLR (Pt. 1248) 31, 82; Ude V. Osuji (1998) 13 NWLR (Pt. 580) 1, 8; Tukur V. Uba (2013) 4 NWLR (Pt. 1343) 90, 136. We were further referred to Section 169 of the Evidence Act, 2011, on this point which it is argued is similar to Section 151 Evidence Act under which the decision in Attorney General Rivers V. Attorney General Akwa Ibom (supra) was decided.
On the question of the validity of the approval of Waiver by the 2nd respondent, learned counsel for the appellant alluded to Sections 59(1) of the Adamawa State Board of Internal Revenue Law (ASBIRL) 2007 and Section 80 of the Personal Income Tax Act (PITA) to submit that the latter is the guiding provision under which the 2nd respondent exercised his discretion to grant approval of waiver, being the law passed by the National Assembly, to regulate matters pertaining to Tax administration in Nigeria as against provisions of Section 59 (1) of the Adamawa State Board of Internal Revenue law, which he argued is general in outlook. To this and provisions which make specific provisions as in Section 80 of Personal Income Tax Act, must be preferred. He cited NDIC Vs. Governing Council ITF (2012) 9 NWLR (Pt. 1305) 252, 273; Osahon Vs. FRN (2003) 16 NWLR (Pt. 845) 89 125-127. He argued that in acting under Section 80 of Personal Income Tax Act, the Governor (1st respondent) was not bound to obtain recommendation or advice of any other Body or organization in granting approval of WAIVER.
Consequently the holding by the trial Court that the 1st respondent was injudicious in the grant of WAIVER was misplaced so far as the 2nd respondent was at the material time under no duty or obligation to conduct his affairs judicially and judiciously. He argued that the trial Court was in error to come to that conclusion in the interpretation of Section 80 of Personal Income Tax Act. He argued that the 2nd respondent validly exercised his powers of waiver of Tax under Section 80 of Personal Income Tax Act, a law which he said regulates personal Income Tax in Nigeria. He urged us to so hold.
As regards issue No. 3 formulated in the appellant?s brief of argument, learned counsel for the appellant has submitted that there was an abuse of Court process by the 1st respondent by the existence of Suit No. ADSY/102/2017 which he argued is the same or similar in character as Suit No. ADSY/101/2017, the suit or case which gave rise to this appeal. To this end it is argued that suit No. ADSY/101/2017 was/is incompetent. He cited and relied on (i) Saraki & Anor. Vs. N.A.B. Kotoye (1992) 9 NWLR (Pt. 264) 156; TSA Ind. Ltd Vs. FBN Plc. (no.1) (2012) 14 NWLR (Pt. 1320) 326, 344.
Learned appellant’s counsel submitted further that proliferation or multiplicity of suits amount to abuse of Court process as same is intended to irritate the party on the opposite side whereas a single suit on the same subject matter will suffice. He argued that irrespective of the Joinder of the 2nd respondent as a party, the character of the suit has not changed as suits No. ADSY/101/2017 and ADSY/102/17 still remain the same, the 1st and 2nd respondents still serving common interest and common purpose. We were urged to so hold.
Under Issue No. 4 it was submitted that the Judgment appealed against is/was against the weight of evidence hence the suit of the 1st respondent at the trial Court be dismissed on that account, the 1st respondent having failed to prove their case against the appellant (defendant) at the trial Court.
On the award of damages against the appellant and in favour of the 1st respondent it was argued that the necessary award made was not proved strictly as a requirement for the grant or award of special damages and yet the trial Court gave or made that award of the sum of N460, 006,082.39k.
Learned appellant’s counsel further queried the finding made at the trial Court by that which the Court faulted the 2nd defendant/respondent when it claimed gave the approval of WAIVER in absence of a recommendation or any advice being made by any relevant authority to that effect. Citing Section 80 of Personal Income Tax Act, it was argued that the finding at the trial Court was misconceived since the Governor, in the exercise of this discretion to grant approval of WAIVER is not bound to obtain from anybody, a recommendation or advice to take or refrain for taking that action as held by the trial Court neither was the 2nd respondent required under that Section. We were urged to resolve Issue No. 4 also in favour of the appellant.
The 1st respondent in her brief of formulated and argued 2 (two) issues, namely:-
1. Whether the decision appealed herein was against the weight of evidence adduced before the Court below.
2. Whether the Court below rightly assumed jurisdiction in nullifying the remission of the outstanding tax due to the 1st Respondent from the Appellant for the tax years of 2008-2010.
The learned counsel for 1st respondent arguing Issue No. 1 above debunked the submission made by the appellant under issue No. 4 in the appellant?s brief of argument. Contrary to the position taken by the appellant in their brief it is argued that the 1st respondent has proferred sufficient evidence to prove her case and based on which the trial Court also entered Judgment for the 1st Respondent.
I can further refer to pages 12-16 paras 5.1.2 to 5.1.8 in the 1st respondent brief of argument where those submissions were made or contained. Learned counsel for the 1st respondent urged us to resolve this issue 1 (similar to Issue 4) formulated for the appellant) in their favour.
Issue No. 2 formulated in the 1st respondent?s brief of argument raised the question whether the Court below was right in assuming jurisdiction over this case and thereby nullifying the remission of outstanding tax due to the Appellant. Learned counsel speaking for the 1st respondent argued that the trial Court has jurisdiction and rightly exercised it. I refer to pages 17-22, paragraph 5.22 to 5.29.
Contrary to the submissions of learned appellant counsel, it was argued for the 1st respondent that the letter of approval of Waiver of remittance of Taxes issued by the 2nd Respondent led to this case being instituted against the Government among others, given the fact that the 1st respondent (plaintiff) is an organ distinct and independent of the 2nd Respondent and thus the joinder of the latter as a party was imperative. We were referred to provisions of Sections 88(2) of Personal Income Tax Act, 2014, (as amended), Sections 3(3) and 2(2) of the Adamawa State Board of Internal Revenue Law (ASBIRL) 2007.
By the same reasoning it was further argued that the non-joinder of the staff or the employees of the Appellant to the suit now on appeal, did not in any way affect the competency of the action since the suit was directed on the Appellant whose responsibility it was, to remit taxes deducted from her workers to the 1st respondent but failed to do so. There being no cause of action against the employees of the Appellant, their joinder was uncalled for. We were referred to Section 82, Personal Income Tax Act and the decision in DSA. Agriculture Manufacturing Coy. Ltd V. Lagos State Internal Revenue Board (2006) LPELR-11560 (CA) and Regulations 10 and 17 of the Operations PAY As You Earn (PAYE) where the employer (Appellant) who failed to remit taxes deducted can be held liable.
On the question whether the case before the trial Court leading to this appeal was an abuse of Court process learned 1st respondent’s counsel relying on the decision in PDP & Anor. Vs. Umeh & Anors (2017) LPELR – 42023 (SC) argued that the parties, subject-matter the cause of action in this case on appeal are not the same as those in Suit No. ADSY/102/2017 in any case it was argued that Suit No. ADSY/101/2017. In any that is, the case on appeal was first in point of time to Suit ADSY/102/2017 hence the former cannot constitute an abuse of Court process.
The appellant filed a Reply brief to 1st Respondent?s brief of argument same is dated and filed on the 18th October, 2018 wherein in response to issue No. 2 in the 1st respondents brief argued that issue of jurisdiction by the Court can raised and take at any time even on appeal without leave of Court being taken. He relied on the case of British Airways Plc Vs. Amadi (2012) 2 NWLR (Pt. 1283) 21, 38-39.
Resolution of Issues
This case on appeal was commenced by way of the Originating Summons dated and filed on the 28th July, 2017 and same accompanied with a supporting affidavit and annexus marked Exhibits wherein the Plaintiff at the trial High Court sought for the determination of certain questions raised in the summons.
A resort will be had to the procedure by Originating Summons to commence action in circumstances where issues or question involved in the case are simple and straight framed and devoid of any serious dispute as to facts hence this procedure is available to any person claiming interest under a deed, will or other written instrument. It is a procedure where the evidence in the main is by way of documents and there is no serious dispute as to their existence in the dealing of the parties to the suit see: Famfa Oil Ltd Vs Attorney General, Federation (2003) 18 NWLR (Pt. 852) …; Doherty Vs. Doherty (1969) NMLR 24; PDP Vs. Abubakar (2007) 3 NWLR (Pt. 1022) 515, 544.
Questions presented for determination in this case particularly Question No. 1 at page 3 of the record of appeal call for the examination of records, placed before the Court, interpretation of relevant statutes before coming to a definite conclusion.
Question No. 1 set down for determination of Court read thus:-
“Having regard to Section 59(1) of the Adamawa State Board of Internal Revenue Law, 2007 and Section 80 of the Personal Income Tax Act, 2004, whether the Executive Governor of Adamawa State (sued as the 2nd Defendant) is legally empowered to grant the 1st Defendant a waiver of outstanding tax liability which was already a subject matter of judicial proceedings for the recovery of same.”
It follows from the foregoing therefore that in the determination of the rights of parties in the suit before us, proper construction or interpretation of relevant statutes become inevitable; in this regard provisions of Section 59 (1) (2) of the Adamawa State Board of Internal Revenue Law, 2007, and Section 80 of the Personal Income Tax Act, 2004.
Learned appellant’s counsel in his brief has submitted that Section 80 of the Personal Income Tax Act gave the 2nd Respondent unfettered discretion to grant to the Appellant, the approval of Waiver of remittance of salaries of workers deducted under the Pay As You Earn (PAYE) system.
In granting such approval, he further argued, that the 2nd respondent does not need the recommendation of the commissioner of finance acting on the advice of relevant Tax authorities.
Consequently, the learned trial Judge, it is argued was wrong when it held that the 2nd Respondent abused his office when he granted such waiver, such grant of waiver was against the principle of Equity and overriding public interest. The 1st respondent in her brief agreed with the findings and the conclusions reached by the trial Court that the purported grant of waiver was ultra vires of the 2nd Respondent. See page 19 of 1st Respondent brief of argument at paragraph 5.26.
The trial Court at page 150-151 of the record of appeal held thus in its Judgment:
The plaintiff’s counsel submitted that the Governor abused his office when he granted the waiver and that it ran against the principle of equity and overriding public interest. Looking at the circumstances surrounding the case as seen from evidence adduced by plaintiff, one will tend to answer the question posted in the affirmative i.e. the Governor did not exercise his discretion judicially and judiciously.
Since Section 80 provides that the Governor of the state may on recommendation of the Commissioner of Finance acting on advice of relevant tax authority which is the Board. Equity public interest demand that he ought to have obtained recommendation from his Commissioner based on advice of the Board before granting the waiver
Refer to pages 150-151 of the record of Appeal. Speaking also of Section 59 of the Adamawa State Board Internal Revenue Act, 2007, the trial Court further observed that the provision is neither a general provision nor is the same in conflict with Section 80 of the Personal Income Tax Act (PITA) 2004.
In other words, on the application of both Section 59 of the Adamawa State Board of Internal Revenue Law and Section 80 of the Personal Income Tax Act, the 2nd Respondent has no power to grant waiver, as he did.
The fact that the Governor (2nd Respondent) granted waiver to the Appellant is no longer in dispute. Paragraph 21 the affidavit in support of the Originating Summons is very Explicit on the point as well as the document annexed as Exhibit M to the Originating Summons. This point was not challenged or controverted by the 1st respondent.
Exhibit M at page 55 of the record of Appeal, says it all. It states thus:-
OFFICE OF THE GOVERNOR
THE SECRETARY
TO THE State Government
P.M.B. 2027, Yola
Adamawa State
Department: Political
Telegram: SECSTATEGOVT
Ref: SGS 12/68/Vol.II/690
Telephone: 075-624621, 075-625207
Date 30th July, 2014
The Vice Chancellor,
Modibbo Adama University of Technology,
Yola, Nigeria.
RE: REQUEST FOR WAIVER OF ARREARS OF 2008-2010 PAYE TAX OWED THE ADAMAWA STATE BOARD FOR INTERNAL REVENUE.
I wish to refer to your letter MAUTECH/VC/G.1 OF 25TH July, 2014.
2. His excellency the Acting Governor Rt. Honourable Ahmadu Umaru Fintiri has graciously approved the waiver of arrears of 2008-2010 PAYE Tax owed the Adamawa State Board for Internal Revenue.
3. While wishing you fast development in the University, please accept the assurance of His Excellency?s consideration.
4. This letter is copied to the Chairman Board of Internal Revenue for information and necessary action, please.
SIGNED
(PROF. ABDULLAHI LIMAN TUKUR)
SECRETARY TO THE STATE GOVERNMENT
Copy to:-
The Chairman,
Board of Internal Revenue,
Yola,
Above for you information and further necessary action, please.
SIGNED
(PROF. ABDULLAHI LIMAN TUKUR)
SECRETARY TO THE STATE GOVERNMENT.
Can the Governor of Adamawa State grant the approval of Waiver of remittance, by the Appellant to the 1st respondent. Let us for once look of the relevant provisions of the Laws referred to:-
[1] Section 59(1) (2) of the Adamawa State Board of Internal Revenue Law, 2007 provide thus:-
59. (1) In the exercise of the powers and duties conferred upon the Board by this Law, the Board shall be subject to the general direction of the Governor and any written direct, order or instruction given by him shall be carried out by the Internal Revenue Service:
Provided that the Governor shall not give any directives, order or instruction in respect of any particular person which would have the effect of requiring the Board to increase or decrease any assessment of tax made or to be made or any relief given or to be given or defer the collection of any tax or judgement debt due, or which would have the effect of initiating forbidding the normal course of any proceedings whether civil or criminal relating either to the recovery of any effect under this or any other tax legislation.
(2) In any proceeding whether Civil or Criminal under this Law administration by the Board, any act, matter or thing done by the Internal Revenue Service or the Board in pursuance of the said Laws not be subject to challenge on the ground that such act, matter or thing was not or was not proved to be in accordance with any direction, order or instruction given by the Governor.
[2] Section 80 of the Personal Income Tax Act (PITA) 2004 provides as follows:-
The Governor of the state may on the recommendation of the Commissioner responsible for finance acting on the advice of the relevant tax authority remit wholly or in part any tax payable under this act if satisfied that it is just and equitable to do so.
Going by the provisions of the Laws just referred to above, I have no difficulty in coming to the conclusion that the Governor (2nd Respondent) in purporting to grant approval of waiver to the appellant acted under those provisions. But by dint of the proviso to Section 59(1) the 2nd respondent cannot do so. He lacks the powers to grant waiver of tax remittances as he did. Words underlined as per Section 59 (1) are there for emphasis. The Governor exercising powers under Section 80 of the Personal Income Tax Act (PITA) is not bound to obtain the recommendation of the Commissioner of Finance acting on the advice of the relevant Tax Authority. However, the Governor before exercising his discretionary power under Section 80 PITA, to grant Waiver of Taxes, must be ‘satisfied’ that it is ?just and equitable? to do so. He is not bound to exercise those powers ‘judicially and Judiciously’ as wrongly held by the Court below so far as the Governor (2nd respondent) was not exercising any judicial powers. To this extent, this finding of the Court below must be struck down and expunged from the record. However there has to be some kind of evidence shown ex facie that the Governor before acting, was ‘satisfied’ and it was ?just and equitable? of him to exercise those discretionary powers in the interest of the public.
I have earlier reproduced in full, the contents of Exhibit M, the letter of grant of approval of waiver but cannot find on the face of that document or any other document, the fact that the Governor was ‘satisfied’ and it is ‘just and equitable’ to grant approval of waiver as he did. Anything falling short of this requirement of compliance makes nonsense, the exercise of those powers by the Governor hence any approval of waiver short of compliance with the condition precedent, as discussed earlier will vitiate the approval of waiver as irregular. See the celebrated case in Madukolu V. Nkemdilim (1962) 1 All NLR 587. This to my mind, is how the provision of Section 80 of the Personal Income Tax Act, [PITA] can be understood and applied. Exhibit M. attached to the Originating Summons can therefore not be acted upon in determining any rights or liabilities arising from in this case on appeal. Consequently, the said letter that is, Exhibit M, a letter issued on the directive or approval of the Governor on the 30th July, 2014 at a time when suit No. ADSY/2/2014 between the 1st respondent and the appellant was still pending before the trial High Court, lacks practical utility value hence same must be ignored.
It is for this same reasoning, that Exhibit M cannot operate as estoppel against the 1st respondent neither has the document any binding effect on the 1st respondent as erroneously argued and submitted by the appellant/counsel in their brief of argument.
So far as Exhibit M was flawed in many respects, it cannot constitute estoppel by acts or conduct and thus, the decision in Attorney General Rivers State Vs. Attorney General Akwa-Ibom (2011) 8 NWLR (Pt. 1248) 31, 82; Ude Vs. Osuji (1998) 10 SCNJ 75 and Section 169 Evidence Act, 2011 relied upon by the Appellant in her brief of argument do not apply to the facts of this case. The fact that the 1st respondent also withdrew or discontinued proceedings in Suit No. ADSY/2/2014 before the trial High Court based on Exhibit M. attached to the Originating summons has not altered the nature and character of the document marked Exhibit M as a void document. In any case, Suit No. ADSY/2//2014 withdrawn or discontinued on the 24/9/2014 was so withdrawn on the basis of the approval letter of the Governor vide Exhibit M hence the suit was struck out on the same date. Exhibit M cannot therefore constitute or operate as estoppel to bar the 1st respondent from litigating or relitigating the action, that is, the case on appeal, the same not having been dismissed. This submission of counsel for the Appellant must be ignored or dismissed.
I should say in any case the Governor that is, 2nd respondent in this appeal, has no power to grant approval of waiver by virtue of provisions of Sections 59(1) of Adamawa State Board of Internal Revenue Law, 2007 and Section 82 of the Personal Income Tax Act.
The competency of this appeal case was challenged on several other grounds including:-
(i) The joinder of the 2nd respondent as a party.
(ii) Non-joinder of the employees of the Appellant as parties to the case.
(iii) This case on appeal is an abuse of the process of Court.
As one of the grounds for challenging the joinder of the 2nd Respondent as a party, is the fact that the 1st and 2nd respondents are one and the same, in the sense that they both serve common interest and purpose.
Having regards to the provisions of Sections 88 of the Personal Income Tax Act, 2004 (as amended), Sections 3 and 6 of the Adamawa State Board of Internal Revenue Law, 2007, the Plaintiff or 1st respondent was established as an autonomous Body, is a distinct and independent Body or agency, separated from the 2nd respondent, the executive arm of Government. Section 88(2) of PITA provides:-
Section 88 PITA, 2004 (as amended)
(2) The State Board shall be autonomous in the day-to-day running of the technical, professional and administrative affairs of the State Service.
Section 3 ASBIRL, 2007 provides thus:-
(3) The Board shall have such powers and duties as conferred on it by this Law or by any other enactment Section 6 ASBIRL, 2007 provides thus:-
(2) The Board shall be autonomous in the day-to-day running of the technical, professional and administrative affair, of the internal Revenue Service.?
In any case, the act or conduct exhibited by the 2nd Respondent vide Exhibit M led to this case being instituted hence the joinder of the 2nd respondent, was inevitable as a necessary party See: Green Vs. Green (supra).
The question of the non-joinder of the workers or the employees of the appellant as parties, must equally be dismissed, there being no cause of action against them but the appellant and the appellant alone who shirked in its responsibilities in making remittances to the Board, of the Salaries and deductions made by it. Section 82 of the Personal Income Tax Act provides thus:-
‘An employer required under a provision of this Act to make deductions from emoluments or amount 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 therefor, the amount thereof together with a penalty of 10 per cent per annum of the amount plus interest at the prevailing commercial rate shall be re-coverable as a debt due by the employer to the relevant tax authority.’
It is my submission therefore, that it is the Appellant not her workers or employees that is liable under this provision of the law and thus a necessary party. See D.S.A. Agriculture Machinery Manufacturing Co. Ltd vs. Lagos State Internal Revenue Board (2006) LPELR-11560(CA).
This case on appeal has been contested on the basis of the same being an abuse of Court process in view of the subsistence of Suit no. ADSY/102/2017 between the 1st Respondent and the Appellant. The case on appeal being earlier in point of time as Suit No. ADSY/101/2017 than the former, cannot in my view constitute an abuse of Court process.
In any case, the parties in Suit No. ADSY/102/2017, and the subject-matter are not the same as in Suit No.ADSY/101/2017. In Suit No. ADSY/102/2017, the plaintiff is seeking to recover development levy and tax debt in the principal sum of N842, 001, 985. 19 as against the claim to recover tax debt in the sum of N460, 006, 082. 39 in Suit No. ADSY/101/2017.
What constitute an abuse of Court process, as a principle, has been settled in a long line of judicial authorities.
In PDP & Anor. Vs. Umeh & Anor. (2017) LPELR-42023(SC) where the apex Court held thus:-
“Where, therefore, there exist a pending suit on a cause of action different and distinct from another in a subsequent suit between the same parties, the existence or pendency of the previous suit on an entirely different cause of action between the same parties does not make or constitute the subsequent suit an abuse of the Court?s process. Rather, what makes the subsequent suit an abuse of the process of Court is the institution of a fresh action between the parties and on the same subject-matter against the same opponent on the same issues when the previous suit has not yet been disposed of.”
Suit No. ADSY/101/2017 cannot thus constitute an abuse of Court process.
On the question of the plaintiff?s entitlement to the remittance of the sum of N460,006,082 (Four Hundred Sixty Million, Six Thousand and Eighty Two Naira) and other claims against the appellant, the submission for the appellant has been that the said sum was not strictly proved as the law requires of the plaintiff/1st respondent and for reasons of which the Court below was wrong to award this and other Head of claims in favour of the 1st respondent.
“I do not think there is any substance in this argument by learned counsel for the Appellant viewed from the stand point that this case on appeal was commenced by Originating Summons with an affidavit deposed to in support.
Facts and circumstances giving rise to the claim of the sums awarded are contained in the supporting affidavit to the Originating Summons. See in particular paragraphs 9, 10, 11, 12, 13 and 14 among others of the supporting affidavit to the Summons at page 7 of the record of appeal.
The counter-affidavit filed on behalf of the Appellant as 1st defendant is at pages 82-85 of the record of appeal. In the attempt to respond to the averments of the plaintiff/1st respondent at paragraph 9, 10, 11, 12, 13 and 14 in the supporting affidavit, the appellant deposed to facts at paragraphs 4 and 5 of their counter affidavits. For a counter-affidavit to have any meaningful impact it must join issues with all material facts sworn or deposed to in the supporting affidavit and dislodge the claim or assertion. Therefore, taking another look at paragraphs 4 and 5 of the Appellant’s counter-affidavit, I do not think it raised any serious challenge to paragraphs 9, 10, 11, 12, 13 and 14 of the affidavit in support of the Originating Summons. Those facts therefore are deemed proven. See: Ajomale V. Yaduat (No.2) (1991) 5 NWLR (Pt. 191) 266.
It therefore stands to reason that the claim of the Plaintiff/1st respondent had been proven and the trial Court was/is in order when it granted the claim vide the award he made.
This issue like all the rest must be resolved against the appellant. In effect, all questions formulated for determination in the Originating Summons are all resolved in favour of the 1st respondent. All Issues having thus been resolved in favour of the 1st respondent, the appeal necessarily fails and the same is dismissed. The Judgment of the trial High Court of Justice of Adamawa State granting the claim in Suit No. ADSY/101/2017 is hereby affirmed.
Cost is assessed in the sum of N100,000.00 in favour of the 1st respondent and against the Appellant.
OYEBISI FOLAYEMI OMOLEYE, J.C.A.: I had the opportunity of reading in draft form the leading judgment in this appeal, just rendered by my learned Brother, Saidu Tanko Husaini, JCA.
For the reasons well-articulated in the said leading judgment, I agree that the appeal is devoid of merit and equally dismiss it accordingly. I abide by the consequential orders made therein including that of costs.
JAMES SHEHU ABIRIYI, J.C.A.: I read in advance in draft the lead judgment just delivered by my learned Brother, Saidu Tanko Husaini JCA.
He has dealt exhaustively with the issues for determination. I do not intend to add anything more.
For the reasons contained in the lead judgment, I too dismiss the appeal and affirm the judgment of the Court below.
I abide by all orders including the order as to costs.
Appearances:
E.O. Odo, Esq. with him, Joseph WilliamsFor Appellant(s)
Jude Daniel Odi, Esq.For Respondent(s)
