INDEPENDENT TELEVISION/RADIO v. EDO STATE BOARD OF INTERNAL REVENUE (2014)

INDEPENDENT TELEVISION/RADIO v. EDO STATE BOARD OF INTERNAL REVENUE

(2014)LCN/7241(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 28th day of May, 2014

CA/B/20/2013

RATIO

CONSTITUTIONAL LAW: WHERE THERE IS A CONFLICT BETWEEN TWO LEGISLATIONS, WHICH SUPERSEDES THE OTHER?

Where there is a conflict between two legislations one of which is special on a subject and the other legislation is general in nature, the legislation that is special in nature shall supersede. See Madumere v. Okwara (2013) LPELR 1 at 15-17; AG Ogun v. AG Federation (2003) FWLR Pt. 143 Pg.206 at 246; Edet Akpan v. The State (1986) 3 NWLR Pt.27 Pg.25. Maxwell On Interpretation of Statutes (11th Edition) at Pg.164 states that where a general intention is expressed and also a particular intention which is incompatible with the general one, the particular intention is considered an exception to the general one. See Aqua Ltd v. Ondo State Sports Council (1988) 4 NWLR Pt.91 Pg.622. per HELEN MORONKEJI OGUNWUMIJU, J.C.A.

FAIR HEARING: IMPLICATION OF FAILURE TO UTILIZE AN OPPORTUNITY TO BE HEARD

It is settled law that when a party is given the opportunity (and in this case opportunities) to be heard and such party fails to utilize it, such party cannot hide under the umbrella of the fair hearing rule. He will fail. Again, I agree with Olu Daramola (SAN) that the position of the law is that where a party has been afforded the opportunity to be heard (in this case several opportunities) and such party fails to utilize it, the party cannot approach an appellate court and claim to have been denied fair hearing. See Newswatch Communications Ltd v. Attah (Supra). per HELEN MORONKEJI OGUNWUMIJU, J.C.A.

CONSTITUTIONAL LAW: WHERE THE PROVISIONS OF THE ACT OF THE NATIONAL ASSEMBLY SUPERSEDES THE PROVISION OF THE HIGH COURT RULES

The prescribed form of seeking the application as stated in S.104(3) of the Personal Income Tax Act is a mere application to a High Court Judge sitting in chambers; Better still with an affidavit to support the application which must be in writing. We must note that this provision under Sec.104 PITA has made any application in pursuance of the section a special procedure. Thus, even though the Rules of court are to be followed, in cases whereby an Act of the National Assembly provides for a special procedure to be adopted by the courts in doing a thing, the Act of the National Assembly shall supersede the provisions of the High Court Rules.

We must not lose sight of the fact that the High Court Rules are adjectival rules rather than substantive law and can never supersede an enactment of the National Assembly. See Clement v. Iwuanyanwu (1989) NWLR Pt. 107 Pg. 39; Duke v. Akpabuyo (2005) 19 NWLR Pt.959 Pg.13. per HELEN MORONKEJI OGUNWUMIJU, J.C.A.

JUSTICES

HELEN MORONKEJI OGUNWUMIJU Justice of The Court of Appeal of Nigeria

IBRAHIM MOHAMMED MUSA SAULAWA Justice of The Court of Appeal of Nigeria

TOM SHAIBU YAKUBU Justice of The Court of Appeal of Nigeria

Between

INDEPENDENT TELEVISION/RADIO Appellant(s)

AND

EDO STATE BOARD OF INTERNAL REVENUE Respondent(s)

HELEN MORONKEJI OGUNWUMIJU, J.C.A. (Delivering the Leading Judgment): This is an appeal against the ruling of Hon. Justice Acha of the High Court of Edo State delivered on 06/12/2012. The facts that led to this appeal are as follows:
The respondent commenced an action before the High Court of Edo State by a motion Ex Parte dated 1/11/2012. This motion was supported by a 3 paragraph affidavit, one Exhibit and written address filed on the said 1/11/2012. The applicant prayed the court for the following:
1. An order to distrain upon the land, premises or place of business in respect of which the Defendant is the owner at Glass House Airport Road and Communication Village, Oluku, Benin City.
2. An order to distrain against any movable goods, chattel, bond or securities or any kind of property belonging to the defendant in satisfaction of the liability established against the defendant as final and conclusive taxes due to the applicant.
On 02/11/2012, the court having heard K. Odabi Esq. for the respondent ordered as follows:
“…Applicant (by or through his officers) is hereby permitted to distrain upon any land, premises or place of business in respect of which the Defendant-Independent Television/Radio is the owner at Glass House, Airport Road, and Communication Village, Oluku, Benin City.
It is further ordered that applicant is authorized and permitted to distrain against any movable goods, chattel, bond or securities or any kind of property belonging to the Defendant-Independent Television/Radio in satisfaction of the tax liability in sum of N12,882,596.43 established against the Defendant-Independent television/Radio as stated in Paragraph 3(i) and (j) of the affidavit in support of the motion as final and conclusive taxes due to the applicant on behalf of Edo State Government.”
The appellant in turn filed a motion on notice dated 9/11/2012 praying the court for an order discharging the order obtained ex parte by the respondent. The trial judge fixed the appellant’s motion for hearing on the 20/11/2012. On 20/11/2012, the respondent in response to the appellant’s application for discharge of the Ex Parte order, filed a counter affidavit which prompted the appellant’s counsel to seek adjournment in order to respond to the counter-affidavit. The trial Judge adjourned the hearing of the application to 6/12/2012.
The Appellant then filed a reply to the Respondent’s counter-affidavit on 23/11/2012. On 30/11/2012, the Respondent filed a further counter-affidavit. In turn, on 4/12/2012, the appellant filed a motion praying the court to set aside the respondent’s further counter-affidavit. In the early hours of 5/12/12, the respondent through its officers, visited the appellant’s premises and sealed up the place. On the same day, the Appellant filed a motion to unseal its place of business as well as other injunctive reliefs. The motion was taken and argued on 6/12/12. Thereafter, the trial judge gave his ruling on the motion while the two other pending motions were adjourned to 22/01/2013.

In the said ruling delivered on 6/12/2012 the trial court ordered that:

“1. The defendant/applicant pay the sum of N12,882,596.43 as contained in the order of court made on 2/11/2012 into the confers of the Treasury of Edo State Government.
2. Upon the presentation of a receipt of such payment, the claimant, that is Edo State Board of Internal Revenue shall forthwith unseal and open the premises of the Defendant/Applicant.
3. If upon the determination of the defendant’s application filed on 9/11/2012, the issues are resolved in the defendant’s favour, the said sum of N12,882,596.43 or any part thereof shall be refunded or paid over to the defendant within 48 hours of the ruling and receipt of the order by the claimant and/or Edo State Government.
The motion on Notice filed 9th November 2012 and all other applications are adjourned till 22nd January, 2013”

Dissatisfied with the ruling, the Appellant on 12/12/12, filed its notice of appeal before this Court. The appellant’s brief of argument was filed on 21/01/13 while the respondent’s brief was filed on 28/02/13.
The appellant, in the brief settled by Chief (Dr) Alfred O. Eghobamien (SAN), distilled four issues for determination as follows:
1. Whether the refusal of the trial Judge to hear and determine the appellant’s motion on notice dated and filed on 9th November 2012 and motion dated and filed on 4th December 2012 respectively occasioned a miscarriage of justice and denial of fair hearing.
2. Whether the learned trial Judge has the jurisdiction to adjudicate on the matter.
3. Whether the learned trial Judge was right in marking the order for payment of the sum of N12,882,596.43 (twelve million, eight hundred and eighty-two thousand, five hundred and ninety-six Naira, forty-three Kobo) suo motu without calling on parties to address him on the issue and/or refused to pronounce on issues canvassed before Him.
4. Having regard to the totality of the documents before the learned trial judge, whether the learned trial judge was right in making an order of payment of the disputed amount in issue to the respondent.
The Respondent, in the brief settled by Odabi Kingsley Esq. also formulated four issues for determination as listed below:
1. Whether there was a refusal by the learned trial Judge to hear and determine the appellant’s motion on notice dated and filed on 9/11/12 and 4/12/12 respectively and occasioning the miscarriage of justice.
2. Whether the learned trial judge indeed lacked jurisdiction to adjudicate the matter.
3. Whether the order for payment of the sum of N12,882,596.43 (twelve million, eight hundred and eighty-two thousand, five hundred and ninety-six Naira, forty-three Kobo) was not incidental to the consideration of motion ex parte dated 5/12/12 and argued by Appellant’s Counsel on 6/12/12 and therefore proper.
4. Whether in the circumstance of this case the order for payment by the learned trial Judge was appropriate.
The issues identified by both counsel are the same even if couched differently.
I have crystalised the issues adumbrated by both counsel into two main issues set out below:
1. Whether the learned trial Judge lacked the jurisdiction to adjudicate on the matter.
2. Whether in the circumstances of this case, the learned trial Judge was right in making the Orders made on 6/12/12 which said orders are the subject of this appeal.

After reading the briefs of counsel, the court decided to invite both counsel to address the court on the following issues:

(1) Whether Section 104 of the Personal Income Tax Act Cap. P8, Laws of the Federation as amended in 2011 is unconstitutional
(2) If the answer to the above is answered in the negative, what is the proper implementation procedure to be adopted?

The court also invited several learned counsel as amicus curae to address the Court on the issues immediately outlined above:

The appellant’s counsel, Sir Chief Dr. A. O. Eghobamien SAN filed additional brief of argument on 30/1/2014. The respondent through its newly briefed counsel, Ken Mozia (SAN) filed its additional brief on 18/02/2014. Ade Ipaye the Attorney -General and Commissioner for Justice, Lagos State filed his amicus curiae brief on 25/02/2014. C. A. Ajuyah (SAN) Attorney-General and Commissioner for Justice, Delta State also filed his brief on 4/03/2014. Chief F. O. Orbih (SAN) filed his amicus brief on 24/02/2014 and Olu Daramola (SAN) also as amicus filed his brief on 18/02/2014. Paul Usoro (SAN) filed his amicus brief on 27/02/2014 and Dr Oladapo Olanipekun filed his amicus brief on 11/02/2014. The court sat on 04/03/2014 to hear the issues raised.

ISSUE ONE
Whether the learned trial judge lacked jurisdiction to adjudicate on the matter.

On jurisdiction, Senior Learned Counsel for the Appellant posited that the respondent did not comply with the condition precedent for filing ex parte application as provided for by Order 3 rule 1 of Edo State High Court (Civil Procedure) Rules 2012. Senior counsel further stated that where the rules of Court provide for the doing of a thing, such proviso must be complied with as failure to comply with the proviso robs the court of jurisdiction. Senior counsel cited Madukolu v. Nkemdilim (1962) ALL NLR Pt. 4 Pg. 587; Ademuyi v. Oloku (2009) 11 NWLR Pt. 1153 Pg. 539 at 558; Macfoy v. UAC Ltd (1962) AC 152 at 160.

Learned silk further submitted that following Order 36 Rule 1(3) of the Edo State High Court (Civil Procedure) Rules 2012, a claimant may not make an application for grant of injunction before the issue of the process by which the action is to be begun except where the case is one of urgency. Senior counsel concluded that no urgency existed in the instant case and cited Kotoye v. CBN (1989) 1 NWLR Pt.98 Pg.419 at 422. Senior counsel further stated that where the court has been misled in granting an ex parte injunction, the court will vacate the order when the facts are disclosed. Learned silk cited Ojukwu v. Military Governor of Lagos State (1986) 3 NWLR Pt 26 Pg.39 at 40.

Still on jurisdiction, learned silk for the appellant posited that the Ex parte order was made by the learned trial judge 2/11/2012 at page 6 of the record and that the order abated on 15th November 2012 by virtue of Order 37 Rule 5(3) of the Edo State High Court (Civil Procedure) Rules, 2012. Senior counsel submitted that the order lapsed after 14 days from the 2nd day of November 2012, and that the subsequent enforcement of the order by the respondent is a nullity. Senior counsel argued that the abatement affected the jurisdiction of the court and cited Okpala v. Ezeani (1999) 4 NWLR Pt. 598 Pg 250; Onwuchekwe v. CCB (NIG) Ltd (1998) 5 NWLR Pt. 603 Pg.409. Learned silk finally submitted that the issue of jurisdiction can be raised at anytime even for the first time at Supreme Court and cited Akegbajo v. Ataga (1998) 1 NWLR Pt. 534 Pg.559 at 568.

Odabi Esq. for the respondent submitted that the trial court had jurisdiction to entertain the ex parte application brought before it. Counsel submitted further that Section 104 of the Personal Income Tax Act (as amended) clothes the respondent with the power to distrain the taxpayer by his goods, other chattels, bonds or other securities. Citing Section 104(3) and (4) of the Personal Income Tax Act, the learned respondent’s counsel averred that he can apply to a High Court Judge to execute a warrant of distress.

Counsel argued that it is settled principle of law that where the rules of court require that certain things must be done in a particular way, such must be done as prescribed. The rules of Courts are sacrosanct and needs be obeyed. UBN Plc V. Lawal (2012) 6 NWLR Pt.1295 Pt.186; Izemdonmwen v. UBN Plc (2012) 6 NWLR Pt.1295 Pg.1.

Resolution
It appears to me that the appellant is objecting to the initial order made ex parte by the learned trial judge on 2/11/12 on the basis that the affidavit in support of the motion did not indicate the urgency of the need in compliance with Order 36 Rule 1(3) and should not have been granted. Learned senior counsel is of the view that there is no need for a review of the Order but that the Order ab initio was a nullity. I agree with the appellant’s counsel’s contention that in general matters, urgency must be proved and that there must be a substantive action before a party can file ex parte application as provided under Order 3 Rule 1; Order 37 Rule 6 and Order 36 Rule 1 (3) of the Edo State High Court Rules. However, I do not agree that this is a question of the lack of jurisdiction of the trial judge to grant the ex parte Order. Rather, this court is being asked to review both the discretion of the learned trial judge and to declare the Order a nullity because the appellant did not seek the Order in the prescribed form.

To secure the first ex parte order granted on the 2/11/2012, the applicant now respondent relied on Or. 37 R. 6 of the High Court of Edo State Rules and S.104 of the Personal Income Tax Act Cap P8 of 2004 (as amended in 2011). S.104 of the Personal Income Tax Act provides as follows:

S. 104(1) Without prejudice to any other power conferred on the relevant tax authority for the enforcement of payment of tax due from a taxable person, where an assessment has become final and conclusive and a demand notice has, in accordance with the provisions of this Act, been served on the taxable person or on the person in whose name the taxable person is chargeable, then if payment of tax is not made within the time limited by the demand note, the relevant tax authority may, in the prescribed form, for the purpose of the tax due-

(a) distrain the taxpayer by his goods or other chattels, bonds or other securities;

(b) distrain upon any land, premises, or place in respect of which the taxpayer is the owner,

And subject to the following provisions of this section, recover the amount of tax due by sale of anything so distrained.

Order 37 Rule 6 of the Edo State High Court (Civil Procedure) Rules states as follows:

Order 37 r.6 Affidavit in support of ex parte motion

(1) A motion ex parte shall be supported by affidavit, which shall state sufficient grounds why delay in granting the order sought would entail irreparable damage or serious mischief to the party moving.
(2) The court, if satisfied that to delay the motion till after notice is given to the parties affected would entail irreparable damage or serious mischief to the party moving or it is impossible to serve the parties affected within seven days, may hear an application ex parte and make an order accordingly upon such terms as to cost or otherwise and subject to such reasonable undertakings, as the justice of the case demands.
The respondent at paragraph 3(i), (j), (k) and (l) of the motion ex parte, and the basis of the order granted on 2/11/12 stated as follows at Pg. 3 of the record:
3.(i) That the respondent was served by the applicant the said assessment letter dated 7th of September, 2012 for the sum of N15,199,947.18 (Fifteen Million, One Hundred and Ninety Nine Thousand, Nine Hundred and Forty Seven Naira, Eighteen Kobo)
Copy of the letter is attached herewith as Exhibit BIR1.
(j) That the respondent paid the sum of N2,317,350.75 (Two Million, Three Hundred and Seventeen Thousand, Three Hundred and Fifty Naira, Seventy-Five Kobo) leaving a balance of N12,882,596.43 (Twelve Million, Eight Hundred and Eighty-Two Thousand, Five Hundred and Ninety-Six Naira, Forty-Three Kobo) as outstanding tax liability.
(k) That the respondent after due notification was given opportunity to dispute and or object to the liability raised in the assessment of 7th of September, 2012.
(l) That the respondent has refused, neglected, omitted and or failed to pay the said sum due hence this proceeding.

We must not also be oblivious of the fact that non-compliance with Rules of court though amounts to serious irregularities in procedure, it cannot rob the court of jurisdiction and cannot render the decision of the court void. The court in Clement v. Iwuanyanwu (Supra) per Ogbuagbu JSC held that:
“Rules of courts are not as sacrosanct as statutory provisions of law. A rule of court, cannot confer jurisdiction. It only regulates the practice of the court in the exercise of a power derived aliunde (from another source or from elsewhere) and does not confer power. See Ogunremi v. Dada (1962) 2 SCNLR 417; 1962 1 ANLR 663 and Cropper v. Smith (1883) 24 CH.D”

Thus, even if there was non compliance by the respondent in the ex parte application before the court, the non-compliance will only amount to irregularity in the procedure employed by the court and cannot strip the court of jurisdiction to hear and determine the application.

Still on the conflict between the provisions of Sec. 104 PITA and Order 3 Rule 1 and Order 36 Rule 1(3) of the Edo State High Court Rules, there is no doubt that the conflict is between a special provision of the law which is the former, and a general provision of the law which is the latter. Looking at the issue in contention from this perspective,
the law is settled that in the interpretation of statutes, special things derogate from general things (generalibus specialia derogat).

In my humble view, and from all the points of law set out above, the procedure adopted by the Lower Court in granting the ex parte Order filed on 2/12/12 was proper. A formal motion was filed, argued and followed by a proper Order.

In point of fact since the appeal is actually against the Orders of the trial court made on 6/12/12, the resolution of this point in favour of the respondent is not material as the issue itself is not a momentous one. In conclusion, this issue is resolved against the appellant.

ISSUE TWO
Whether in the circumstances of this case, the learned trial judge was right in making the orders it made on 6/12/12 which said orders are the subject of this appeal.

On this issue, senior learned counsel for the appellant submitted that the trial judge refused to hear the application by first postponing its hearing to 20/11/2012 and on the said date, further adjourning it to 6/12/12. The application, according to the senior learned counsel was not taken on 6/12/12 rather; the learned Judge gave his ruling on another application. Senior counsel submitted that the court has no power to decide whether to hear a motion or not before delivering its judgment. He cited Dandume L.G.C V. Yaro (2011) 11 NWLR Pt. 1257 Pg.159.

Further buttressing his point, senior counsel further submitted that where an application is properly brought before the court, the principle of fair hearing demands that it should be heard on its merits. Senior counsel cited NALSA AND TEAM ASSOCIATES V. NNPC (1991) 8 NWLR Pt.212 at Pg.6761; Otapo v. Sunmonu (1987) 2 NWLR Pt.58 Pg.591. Learned senior counsel argued that the failure of the trial judge to take the appellant’s pending motions before delivering its judgment amounted to a denial of fair hearing.

Learned senior counsel for the appellant argued that the Order of the trial court for payment of the sum of N12,882,596.43 (Twelve Million, Five Hundred and Ninety-Six Naira, Forty-Three Kobo) suo motu without calling on parties to address the court on the issue while refusing to pronounce on the issues canvassed before the court amounted to denial of fair hearing which resulted in miscarriage of justice.

Senior counsel for the appellant in arguing these issues posited that the learned judge erred seriously when he gave judgment to the respondent without giving opportunity to the appellant to defend the case thus amounting to denial of fair hearing as in NICON V. NZE (2004) 15 NWLR Pt.896 Pg.245 at 266. Senior counsel further argued that the declaration by the trial court shut out the appellant all together from presenting its case for the consideration of the court. Counsel cited Salu v. Egeibon (1994) 6 NWLR Pt.348 Pg.23 at 43.

Learned counsel for the respondent on the other hand, posited that there was no refusal by the learned Judge to hear the motion in question. He submitted that adjournment is a matter within the discretion of the court to exercise judicially and judiciously. He cited Alhaji Saleh V. Alhaji Monguno & ORS (2002) FWLR Pt 87 Pg.671 at 687. Counsel argued that where such discretion is not exercised in the interest of justice, it is not open to the Appellate court to interfere with same relying on UMARCO NIGERIA LTD V. PANA/PINA WORLD TRANSPORT LTD (1986) 1 NWLR Pt.110 Pg. 334; (1999) 10-12 SC 23; Ichie Jerome Anoghalu v. Nathan Oraelosi (1999) 10-12 SC 1.

Learned counsel for the respondent argued that the trial court acted within the confines of the discretion vested in it in ordering the appellant to pay the default sum. Counsel further argued that the respondent’s Ex parte motion contained the main grouse between the parties and that all other motions are merely incidental to it. Counsel argued that although the payment of the said sum was not prayed in the Ex Parte motion, the learned trial judge had inherent jurisdiction make any order where the applicant includes in his prayers the expression “and to make any orders as the honourable court may deem fit”. Counsel cited Prince Ajibola and Anor v. Sogeke & Anor (2002) FWLR Pt 93 Pg.1959 at 1983.

Resolution
I have carefully considered after reading the record the circumstances of this case and the circumstances under which the motions ex parte filed on 5/12/12 was refused and the other motions adjourned.

Now let us consider the reasoning of the learned trial judge. It is on Pg. 160 of the record:

“I have read the motion ex parte, the affidavit in support and particularly the counsel’s written address.

My first observation is that this court cannot grant an interlocutory injunction on an ex parte application as this application is seeking this court to do.

It is also observed that the affidavit in support realed out complaints on what is alleged that claimant has done. I cannot find any disposition regarding the urgency why an interim order be made on an ex parte application. I also observe that there is no deposition as to undertaking. All I have said above not withstanding as stated in the application the defendant carries on the business of disseminating information to members of the public. The issues raised in the application filed on behalf of defendant on 9/11/2012 are yet to be resolved”

The main grouse of the appellant is that the court refused its application ex parte and adjourned its other applications. After it was served with the order Ex Parte made on 2/11/12, the appellant filed a motion on notice on 9/11/12 to discharge the ex parte order made on the 2/11/12. It was during the pendency of this motion on notice which was served on the respondent that the respondent executed the Order made on the 2/11/12. The Order Ex Parte was executed on 5/12/12 the day before parties were to argue the motion on notice filed on 4/12/12.

I have set out above the relevant portions of the affidavit in support of the ex parte order which was executed on 5/12/12. Paragraphs 10, 11 and 12 of the motion ex parte filed on 5/12/12 by the appellant on Pg.152 of the record states thus:

10. That while the matter is still pending in court, I was on duty on the 5th day of December, 2012 at about 6.15am when the claimant with a detached team of mobile policemen stormed the premises of the applicant at Communication village, Oluku, Benin City, vandalized its facilities, forcefully drove out applicant’s staff and sealed up applicant’s premises.

11. I was informed by Abiodun Mudashiru, the Assistant General Manager, News and Current Affairs of the applicant on the 5th day of December, 2012 at about 10.00 am in the chambers of Eghobamien & Eghobamien SAN and I verily believe him that when the claimant, its agents, servants and/or privies left the applicant’s premises at Communication Village, the claimant, its agents, servants and/or privies went to Glass House, Airport Road, Benin City where the applicant is a co-tenant with other tenants, drove away the workers and sealed up the entire premises.
12. At the time the claimant came to the defendant/applicant’s premises both at Communication village, Oluku, Benin City and Glass House, Airport Road, Benin City, the claimant’s servants, agents and/or privies beat up the applicant’s staff and forcefully shut down the station and physically dragged the staff of the applicant on duty out of the premises.

I am of the firm view that the appellant cannot eat its cake and have it. I have read the record of proceedings of the trial court on 6/12/12 which starts from Pg. 158 of the record. The appellant abandoned its motion on notice filed on 9/11/12 which would have forced the court to consider the fact that there were conflicting figures being touted by both parties in the dispute. Contrary to the rules of court, it decided to file and pursue a motion ex parte when a motion on notice by it was pending. The appellant cannot turn around to complain against that which it had chosen. Volenti non fit injuria is apt in this case.

There is no doubt that the law is settled that where there are pending applications before a court, the court is duty bound to rule on all applications before it before delivering its judgment. There are plethora of authorities in this regard. See Mobil v. Monokpo (2001) FWLR Pt.78 Pg.1210; Mokwe v. Williams (1997) 11 NWLR Pt.528 Pg.309; Savannah Bank Nig. Ltd v. SIO Corporation (2001) 1 NWLR Pt.693 Pg.194.

However, we have to consider the special circumstances of this case. We must consider the principles and policy relating to tax issues. If counsel are allowed to indulge in the hide and seek tactics inherent in our adversarial jurisprudence, the purpose of specialized tax laws and regulations would be defeated.

The learned trial judge in my humble view considered the motion and in essence re-affirmed its previous Order. The court however in the spirit of just administration of justice restated its orders and added conditions that would fulfill the ends of justice. I cannot disagree with the judicious exercise of the discretion of the learned trial judge in the circumstances of this case. The second issue is resolved in favour of the respondent.

ISSUES 3 and 4

Whether Section 104 of the Personal Income Tax Act Cap. P8, Laws of the Federation as amended in 2011 is unconstitutional.

If the answer to the above is in the negative, what is the proper implementation procedure to be adopted.

Chief Alfred Eghobamien (SAN) filed two briefs in response to the request by the court to file additional briefs on the questions posed by the court. The brief filed on 8/1/14 was withdrawn while the brief filed on 30/1/14 was adopted.

Chief Alfred Eghobamien (SAN) for the appellant on the first leg of this issue emphasized the supremacy of the constitution and cited Sec. 1(1) of the 1999 Constitution as amended. Senior counsel also stressed the importance of fair hearing and cited Sec. 36(1) of the Constitution, Agbiti v. Nigerian Navy (2011) 4 NWLR Pt.1236 Pg.175 at 214; Ogunsanya v. State (2011) 12 NWLR Pt.1281 Pg.401 at 417; Kalu v. State (2011) 4 NWLR Pt.1238 Pg. 429 at 499. Senior counsel submitted that the right to fair hearing is enshrined in the constitution and is very essential for a person to secure justice and drew the court’s attention to the decision of the Supreme Court in S & D Construction Co. Ltd v. Ayoku (2011) 13 NWLR Pt.1265 Pg. 487. Senior counsel also cited Usani v. Duke (2004) 7 NWLR Pt. 871 Pg.116; Fagbule v. Rodrigues (2002) 7 NWLR Pt.765 Pg.188; Adeniran v. NEPA (2002) 14 NWLR Pt.786 Pg.30; Bamgboye v. University of Ilorin (1999) 10 NWLR Pt 622 Pg. 290; Awoniyi v. Reg. Trustees of the Rosicrucian Order AMORC (2000) 4 SC Pt.1 Pg.103; (2000) 10 NWLR Pt. 676 Pg.522; Ovunwo v. Woko (2011) 17 NWLR Pt 1277 Pg.522 at 555-556

Senior counsel argued that any judicial pronouncement on Section 104 of the Personal Income Tax Act without complying with Sec. 1(1) and 36(1) of the constitution is unconstitutional and void. Senior counsel submitted that failure to avail an aggrieved person or any person to be adversely affected by the decision of a court, body or tribunal with the opportunity to respond to the case against it constitutes a breach of his right to fair hearing. Counsel cited OSIEC v. AC (2010) 19 NWLR PT. 1226 Pg.273 at 339. Senior counsel further argued that since S. 104 PITA is subject to S.1 (1) and 36(1) of the constitution, the section of PITA is null for contradicting the constitution which is the grundnorm. Learned senior counsel cited AG Abia v. AG Federation (2002) 6 NWLR Pt.763 Pg.264; AG Osun v. AG Federation (1982) 2 FNR 4; Stabilini Visilini Ltd v. FBIR (2003) 13 NWLR Pt.1157 Pg.200.

On the second leg of this issue, Senior appellant’s counsel restated his position that Sec. 104 of the Personal Income Tax Act is unconstitutional and it being so cannot provide any procedure. Senior counsel said in the event of paucity of legislation, Order 3 rule 1 of the Edo State High Court Civil Procedure Rules, which also emphasize fair hearing should be followed. Senior counsel argued that the said Or 3 R. 1 of the Edo State High Court Civil Procedure Rules is in conformity with S. 36(1) of the constitution and insisted that the procedure to be followed are the twin pillars of the rules of natural justice. Senior counsel finally submitted that a tax defaulter must be afforded fair hearing and that judgment should not be entered against a defaulter without him being afforded the opportunity to be heard.

Ken Mozia (SAN) for the respondent filed a brief as amicus curiae and as the respondent counsel on 18/2/14. On the first leg of this issue, senior counsel argued that the intendment of the Act is to create a right of access to the tax authority to a Judge of the High Court for enforcement of tax due in respect of assessment, which has become final and conclusive.

Senior counsel explained the similitude of S.104 to that of a garnishee proceeding under S.83 of the Sheriff and Civil Process Act Cap S6 LFN. Learned senior counsel stressed the fact that putting a debtor on notice will ensure that by the time the application is granted, there might likely be nothing left to distrain. Senior counsel argued that as far as the judgment debtor is concerned, he is not given an opportunity to be heard as the proceeding is strictly between the garnishee and the garnishor. Counsel submitted that since garnishee proceeding has not been declared unconstitutional, why should the proceedings under S. 104 be declared unconstitutional?

Senior counsel argued further that the constitution recognizes the fact that the steps taken in consonance with the tax law by tax authorities are proper. He cited S.44(2) of the constitution.

Arguing further, senior learned counsel for the respondent in oral submission to the court argued that since tax assessment is done every year, saddling the tax authority with the burden of initiating trial for every default in tax payment would result in unending litigation and result in tax defaulters unnecessarily bugging down the tax enforcement authorities.

Learned senior counsel stressed the point that since an ex parte application is the statutorily prescribed mode of applying for a distraining order, it is incumbent that the procedure and no other is complied with. Counsel cited Okereke v. Yar’Adua (2008) 12 NWLR Pt.1100 Pg.127; Governor of Ebonyi State v. Isuama (2004) 6 NWLR Pt.870 Pg. 511 at 539. Senior counsel submitted that the distraining order provides the tax authority with a judicial plank for enforcement of payment of statutorily declared debt and cited Provisional Liquidator Tapp Industries v. Tapp Industries (1995) 5 NWLR Pt.393 Pg.9 at 39.

Learned senior counsel for the respondent reproduced S. 44(2) of the constitution and submitted that even the constitution recognizes the fact that in some circumstances property may be compulsorily taken and may be sold for the purpose of enforcement of tax payment.

Chief Fred Orbih (SAN) arguing as amicus curiae urged the view that the decisions to be taken under S.104 PITA are too weighty to be taken behind the tax payer affected and strongly argued that the tax payer should be afforded fair hearing. Senior counsel argued that to understand the full import of S.104 of PITA, S.57 and 66 of the same Act must be read with it. Learned senior counsel urged the view that even when the tax authority complies with S.57 and 66 of PITA, the power vested in the tax authority by S.104 of PITA to decide whether the taxpayer has been properly served and that the assessment has become final and conclusive amounts to overconcentration of power on the tax authority. Senior counsel in outlining the definition of ex parte according to the Black’s Law Dictionary 7th Edition Pg 597 submitted that all the decisions taken beginning from the assessment of the tax payer to service of the notice, the decision on finality of the assessment and warrant of distress are all in the absence of the tax payer and without his knowledge. Senior counsel argued that the pith of this issue is whether or not it is constitutional for the law to empower the tax authority to take all steps and decisions under S.57 and 66 of the Act without notice to the tax payer affected. Learned senior counsel stressed the supremacy of the constitution and submitted that any law that is inconsistent with the constitution is void to the extent of its inconsistency. Senior counsel cited S.1(1) and (3) of the constitution; Oyawole v. Shehu (1995) 13 NWLR Pt. 414 Pg.484; Obasanjo v. Yusuf (2004) 9 NWLR Pt.877 Pg.114 at 83; AG Federation v. Guardian Ltd (1999) 69 LRCN Pg.1531 at 1569; Phoenix Motors Ltd v. NPFMB (1993) 1 NWLR Pt 272 Pg 718 at 730.

Senior counsel in his oral submission argued that no parallel can be drawn between the garnishee proceeding and proceedings under S.104 of PITA. He argued that the garnishee is ordered to show cause and is heard before a garnishee order nisi is made but the tax defaulter is not heard in this case. Senior counsel then urged the court to declare S.104 unconstitutional.

Learned senior counsel posited that S.104 PITA appeared to be in collision with S. 36, 43 and, 44 of the constitution. Senior counsel further opined that a profound look at S.104 of PITA would reveal that the section tends to nibble powers and the jurisdiction conferred on the courts by S.6(6) of the constitution in that all the decisions taken before issuance of warrant of distress are already taken by the tax authority before they approach the court for distress warrant.

Senior counsel further posited that since the application for warrant is made ex parte, it follows that all the decisions made by the tax authority will be uncontroverted and the court acts merely to rubber stamp the prior acts of the tax authority. Learned Senior counsel outlined the rules of natural justice as in S.36 of the constitution and University of Nigeria Teaching Hospital Management Board v. Nnoli (1994) 8 NWLR Pt. 363 Pg.376 at 403 and submitted that since S.104 of PITA does not give the tax payer the opportunity of being heard, the Act is no doubt in conflict with S.36(1) of the constitution. Senior counsel submitted that S.104 of PITA blocks the tax payer’s right of access to court completely and makes it possible for the tax authority to determine his rights and obligations in his absence.

On whether S.104 PITA conflicts with S.43 and 44(1) of the constitution, Chief Orbih (SAN) submitted that when a statute is revenue oriented, the provision thereof must be construed liberally in favour of deriving revenue by government in the interest of the public and cited Phoenis Motors Ltd v. NPFMB (Supra); Sadiku v. AG Lagos State (1994) 7 NWLR Pt 355 Pg. 235 at 248. Senior counsel urged the court to hold that when the court is in a dilemma between construing a statutory provision liberally in favour of driving revenue by government and leaning in favour of preservation of fundamental right, the court must lean towards the preservation of fundamental rights entrenched in the constitution. Senior counsel argued copiously on the importance of air hearing and cited Uzoukwu v. Ezeona II (1991) 6 NWLR Pt. 200 Pg. 708 at 760; AG Bendel v. Aideyan (1989) 4 NWLR Pt.118 Pg.646; University of Nigeria Teaching Hospital Management Board v. Nnoli (Supra) and Atake v. Afejuku (1994) NWLR Pt.368. Learned senior counsel urged the court to follow the reasoning in Atake v Afejuku (Supra) and lean in favour of fundamental rights to hold that S.104 of PITA is unconstitutional.

Senior counsel urged the court to use the blue pencil rule to cancel the ex parte provision in S.104 of the PITA. He cited AG Federation v. AG Abia (2001) 11 NWLR Pt.725 Pg.689; Onagoruwa v. IGP (1991) 5 NWLR Pt. 193 Pg 593; AG Abia v. AG Federation (2002) FWLR Pt.763 Pg 264 at 436; Oyawole v. Shehu (Supra).

Olu Daramola (SAN) in his amicus curiae brief which was argued by Mr. Lawal urged the view that S.104 PITA is not the only law in Nigeria that allows distrain of property. Senior learned counsel cited S. 86(1) Companies Income Tax Act, S. 3(1)(b) Petroleum Profits Tax Act, S. 16 Casino Taxation Act No. 26 of 1965, S.33(1) Federal Inland Revenue Service (Establishment) Act No.13 of 2007, S.43(1) Capital Gains Tax Act, S.15 Lagos State Hotel Occupancy and Restaurant Consumption Law 2009 as other legislations which allow distrain of a defaulter’s chattel and immovable property. Senior counsel then posed the question as to the peculiarity of S.104 PITA as to warrant its constitutionality to be under scrutiny. Senior counsel emphasized the essence of fair hearing but argued that there is no part of S. 104 PITA which prevents the tax defaulter from applying to court even before a distress order is given. Senior counsel also pointed out that the goods are kept for 14 days after the distress order before they can be sold and that this lapse of time is another opportunity for the tax defaulter to apply to the High Court to seek relief before its expiration. Senior counsel in evaluating S.41 and 44 PITA argued that the power vested in the tax defaulter to kick start the tax process is an opportunity for the tax defaulter to be heard even before the application for distrain.

Senior counsel also pointed out that by virtue of S.57 of PITA the tax defaulter is served a notice of assessment and that nothing at this point prevents the defaulter from calling the attention of the tax authority to object to disparities in figures. Senior counsel submitted that this is yet another opportunity for the defaulter to be heard long before the issue of distrain even crops up. Senior counsel argued that another pertinent opportunity to be heard is given to the defaulter by provision of Paragraph 13(3) of the Fifth Schedule to Federal Inland Revenue Service Act 2007 which affords a tax defaulter the right to appeal to the Tax Appeal Tribunal. The Tribunal exists in all the geopolitical zones in the country.

Learned senior counsel argued that many more rights to be heard are granted to the defaulter by the unconstrained right to apply to the High Court and further appeals to Court of Appeal and Supreme Court.

Senior counsel finally submitted that where a party is afforded the opportunity to be heard but fails to utilize the opportunity, such party cannot complain that his right to fair hearing has been infringed upon. He cited Newswatch Communications Ltd v. Atta (2006) 12 NWLR Pt. 993 Pg.144 at 179. Senior counsel in evaluating whether S.104 PITA violates the right to privacy restated the right to privacy as contained in S.37 of the constitution. Senior counsel argued that a tax defaulter is like a judgment debtor who was adequately served processes containing his tax liability but he either refused to dispute his liability or he has exhausted the dispute avenues. Learned senior counsel submitted that tax enforcement is like enforcement of a court judgment as alluded to S.16(2) of the Casino Taxation Act which states that:

“unpaid tax shall be deemed to be a debt by the licensee as judgment debtor owing to the Board as judgment creditor and payable under a judgment of a High Court”

Senior counsel also alluding to S.45(1) of the constitution argued that nothing in S.37 of the constitution shall invalidate any law that is reasonably justified in a democratic society. Senior counsel submitted that the Tax Act and the distress of property for default of payment are reasonably justified in our democratic society. Learned senior counsel also pointed out that S.104 of PITA does not even violate the tax defaulter’s freedom from compulsory acquisition of property. Senior counsel submitted that because the taking of the defaulter’s property in satisfaction of tax obligation is expressly sanctioned by S.44(2) of the constitution, S.104 PITA does not compulsorily take away the property of a defaulter in the manner prohibited by S. 44(1) of the constitution.

On the procedure to be adopted, Olu Daramola (SAN) in his brief submitted that the proper implementation procedure is contained in the PITA itself. Senior counsel listed the procedure as follows:

1. Where tax payer does not fix its assessment on time, the tax authority by virtue of S.54(1) PITA assess the tax liability of the tax payer and then issue a demand notice on the tax payer for the assessed sum.
2. By virtue of S.57 PITA, the demand notice is served on the tax payer and by virtue of S. 58 if the tax payer disagrees with the assessment in the demand note, he may file an objection to the Tax Authority within thirty(30) days of receipt of the demand notice.
3. By virtue of S. 104(1) of PITA where the tax payer does not file objection to the demand notice within 30 days of the receipt of demand notice the assessment in the demand notice is deemed conclusive on the tax defaulter and the tax authority can apply to High Court on oath via an ex parte motion to recover the debt.
4. By virtue of S.104(4) and S. 104(5) of PITA, if the Judge is satisfied that the application is meritorious he may order the tax authority to execute a warrant of distress and the tax authority may keep the goods for 14 days to allow the tax defaulter to pay. The tax defaulter is also to bear the cost of keeping the goods.
5. By virtue of S. 104(6) of PITA, when the goods are sold, the tax authority shall deduct the cost and incidental charges in addition to the tax liability before paying the balance from the sale to the tax defaulter/owner of the property.
6. The categories of goods and properties that can be sold include chattels and all movable items belonging to the debtor wherever the same may be found in the country by provision of S. 104(7) of PITA.
7. The tax authority cannot make final sale except by Order of the Court by virtue of S. 104(8) of PITA.

In his oral submission, Mr Lawal Esq. from Afe Babalola & Co who adopted Olu Daramola (SAN)’s brief argued that S.104 is not unconstitutional. Counsel argued that the law has not infringed on the right to property since the tax payer has several opportunities to be heard. Counsel argued that tax debt has the nature of an unpaid debt. Counsel cited R v. Carrick District Council Ex Parte Prankerb (1999) QB 1119; Phillips v. Commissioner 283 US 589 (1931).

Mr Ade Ipaye, the Attorney-General of Lagos State also as amicus curiae in his oral submission argued that S.104 is constitutional and can be enforced in its current form. Counsel argued that S.44(2)(a) of the constitution is the important exception to the right to property and that the section must be read alongside S.24(f) of the constitution. Counsel stressed that S. 36(2) of the constitution is an exception to S.36 of the constitution and that the tax authority must make an honest declaration of the facts of the case before filing a motion ex parte before the court. Counsel submitted that the constitution must be dealt with as an entity and one part should not be severed from others and cited AG Bendel v. AG Federation (1981) 10 SC 132-134.

Learned counsel urged the view that pursuant to S. 24(f) of the constitution tax payment is an obligation and that failure of a citizen to pay tax strips him of the protection offered him by S.44(1) of the constitution. Counsel cited Ishola v. Ajiboye (1994) 6 NWLR Pt 352 Pg.506 at 559.

Learned counsel outlined the procedure before distrain of property by the tax authority as:

(a) Issuance of a warrant of assessment on the tax defaulter
(b) Proof of service on the tax defaulter
(c) Declaration of fact that 30 days or more had elapsed since the issuance of warrant without any objection or appeal from the tax payer.
(d) Proof of issuance of demand notices.
(e) Proof that after issuance of demand notice, the taxpayer failed to pay.

Counsel concluded that it is after all these have been done that a distraining order can be granted.

Dr Oladapo Olanipekun argued that Sec 44(2) (a) of the constitution presupposes a general law reasonably justifiable in a democratic society. Counsel argued that the section establishes a procedure and that there is a difference between what happens after Sec 104 PITA is activated and before it is activated. Counsel argued that there is no fair hearing in the pre Section 104 by virtue of Sec 59 of the same PITA.

Counsel juxtaposed the provisions of S.104 PITA with the rights of a tax payer under the Canadian Declaration of Tax Payer Rights 1985 and argued that S.104 is detrimental to the tax payer’s right to be informed, assisted and heard, right of appeal, right to pay no more than the correct amount of tax, right to certainty and right to privacy and confidentiality. Counsel argued that S. 104 of PITA ordinarily offends the spirit and tenor of S.43 and 44(1) of the constitution but that its provisions are saved by S.44(2)(a) of the same constitution. Learned counsel argued further that considering the saving effect of S.44(2)(a) of the constitution, the court’s attention ought to be drawn to S.45(1) of the same constitution which provides that:

“Nothing in sections 37, 38, 39, 40 and 41 of this constitution shall invalidate any law that is reasonably justifiable in a democratic society”

Counsel cited Sec 43, 44(1) and (2) (a) and 45 of the Constitution; and Bendel v. Aideyan (1989) 4 NWLR Pt. 118 Pg.646.

Counsel argued that it can be inferred from the wordings of S. 45 (1) of the constitution that a general law under S.44(2) of the constitution must be such that does not hinder and in fact guarantees the right of access to court and is reasonably justifiable in a democratic society. Learned counsel cited National Union of Electricity Employees v. Bureau of Public Enterprises (2012) 52 NSCQR 345.

Learned counsel submitted that if S.104 of PITA is found to be incompatible with any of the provisions of the constitution guaranteeing fundamental rights, then the section can not pass as a law reasonably justifiable in a democratic society. Counsel cited Provost LACOED v. Edun (2004) 6 NWLR Pt. 870 Pg.476 at 509; Obikoya v. Governor of Lagos State (1987) 1 NWLR Pt.50 Pg. 385 at 398.

On the right to fair hearing, Dr Olanipekun restated the essence of the fair hearing rule and cited Nigercare Development Co. Ltd v. Adamawa State Water Board (2008) All FWLR Pt 422 Pg. 1052 at 1075; Kotoye v. CBN (Supra); Obasanjo v. Buhari (2003) 11 SC 1 at 61. Counsel submitted that ex parte applications are not strictly speaking unconstitutional, but that the orders must be granted in the interim and/or incidental to a substantive suit. Counsel cited Animashaun v. Bakare (2010) 16 NWLR Pt.1220 Pg.513 at 530; Chief Land Officer v. Alor (1991) 4 NWLR Pt.187 Pg.617 at 626 and submitted that it is improper exercise of jurisdiction to make an interim order to last until the final determination of the substantive action. Counsel alluded to S. 49(3) and 50(2) of the Asset Management Corporation of Nigeria Act 2010 which provides that AMCON can approach the court by way of motion ex parte for the purpose of attaching property in recovery proceedings. Learned counsel submitted that the aforementioned sections of AMCON Act safeguards the right to fair hearing by ensuring that the ex parte orders are in the interim and the other party is given the chance to contest the case/order.

On the right of appeal, counsel submitted that the right of appeal is linked to the right to fair hearing and exists to fortify it. Counsel cited S.233 and 241 of the constitution; Abubakar v. YarAdua (2008) 3 NWLR Pt.1078 Pg.465 at 496; Edjakpo v. Osia (2007) 29 NSCQLR 842 at 866; Yekini v. Afosi (2008) 33 NSCQLR 1445 at 1448. Learned counsel urged the view that the ex parte order under S.104 of PITA is intended to be a final one. Counsel argued that a defaulting tax payer should be given the option of exercising then right of appeal even though the procedure is ex parte. Counsel cited N. S. Eng. Co. Ltd v. O. S. M. Ltd (2000) 3 NWLR Pt.649 Pg.403 at 413; Guardian Newspaper Ltd v. AG Federation (1995) 5 NWLR Pt. 398 Pg.703 at 729-730. Counsel in further submitting that S.104 of PITA is unconstitutional, referred to S.27 of NDLEA Act which gives NDLEA the power to apply for an interim order of forfeiture of property of a person convicted of an offence under the Act and by virtue of Paragraphs 1, 2 and 3 of the NDLEA (Disposal of Forfeited Assets and Properties) Regulations, the NDLEA is restricted from disposing of any forfeited items until the final determination of any appeal against the forfeiture order.

Counsel in his oral submission, stressed that it is important for the other party to be heard and that even in garnishee proceedings the attitude of the court now is that the judgment creditor is brought to court and must be heard. Counsel argued that there are parallels to be made with other provisions relating to the ex parte orders. S.104(4) is the nature of a legislative judgment and like a final decision, it can be executed within fourteen days. Counsel compared the section to S.27 of the NDLEA Act and that in the NDLEA if there is an appeal to a confiscation order, the order would not be executed. Counsel finally urged the court to apply the purposive approach to the interpretation of S.104.

Mr. B. O. Odigwe who adopted the brief of the AG Delta as amicus curiae argued that S. 104 is constitutional and that before it can be said to be unconstitutional, it must be shown to manifestly contravene S.1(3) of the constitution. Counsel argued that even though the constitution guarantees any individual’s right to own property under S. 43, this right is qualified under S.44 (a)-(m) which gives power to tax enforcement authorities to enforce payment. Counsel submitted that the phrase “final and conclusive” contained in S.104 PITA is not an isolated provision but an expression of a long procedure contained in S.58-61 PITA and as such cannot be said to violate S.36 of the constitution. Counsel expatiated further that by a careful perusal of S.58, 59, 60 and 61 PITA shows that a taxable person is afforded the opportunity of being heard before his tax assessment is termed ‘final and conclusive’. Counsel expatiated on the principle of fair hearing and cited PDP v. INEC (1999) 11 NWLR Pt 626 Pg.200 at 242; Military Governor of Lagos State v. Adeyiga (2012) All FWLR Pt.616 Pg.306; Amadi v. NNPC (2000) 10 NWLR Pt.76 at 111; Ojukwu v. Obasanjo (2004) All FWLR Pt.222 Pg.1661 at 1701. Senior counsel submitted that S.104(4) does not make the judge a robot but vested the judge with the discretion to either take the application made ex parte or order that the party be put on notice. Counsel stressed that the section states that the Judge may which is discretionary and there is nothing unconstitutional in that. Counsel reproduced the dicta of Uwais JSC in 7UP Bottling Co. Ltd v. Abiola & Sons Ltd (1995) 2 NWLR Pt.383 Pg.257 at 250-281 that:

“There is no doubt that the right to fair hearing under the constitution is synonymous with the common law rule of natural justice. However, because of the nature of the certain preliminary steps that have to be taken before the commencement of the substantive matters, the rules of the court have made provision for ex parte applications and there is nothing unconstitutional in such rule”

On the procedure to be followed by the tax authorities on a tax defaulter before power of distrain is exercised, counsel submitted that the procedure is clearly set out in Sec. 104(1),(3),(4),(5) and (8) PITA thus:

i. A taxable person is served with a notice of assessment which has become final and conclusive.
ii. Subsequently, a demand notice is served on the tax defaulter
iii. On the failure of the person to respond, the tax authority approaches the court by an application ex parte for a warrant to exercise the power to distrain.
iv. The goods distrained are kept for 14 days at the expiration of which, if there is no response from the tax defaulter the goods will be sold.
v. The order of the court is gotten before the goods are finally sold.

Senior counsel submitted that from the above listed procedure, a taxable person whose tax assessment has become final and conclusive and who defaults is given a hearing and enough opportunity to pay and redeem his goods before they are sold.

Ojibara Esq. who adopted the brief of Paul Usoro (SAN) as amicus curiae in his oral argument cited S. 104 PITA and S.44(2)(a), 44(2)(b) and 44(2)(e) of the constitution and submitted that the distraining of a taxable person’s chattel is constitutional. Counsel however quarreled with the distrain through an ex parte motion and argued vociferously that the use of ex parte motion denies a tax defaulter of eligible right to be heard. Counsel stressed the importance of the fair hearing rule and cited Victino Fixed Odds Limited v. Ojo & 2 Ors (2010) 8 NWLR Pt.1197 Pg. 486; Amadi v. Thomas Aplin Co. Ltd (1972) 4 SC 228; Kano NA v. Obiora (1959) SCNLR 577; Tukur v. Government of Gongola (1989) 9 SCNJ 1.

Counsel in his oral submission, argued that ex parte orders are not generally bad but can be termed bad when they are absolute and final in nature and leave no room for the affected party to be heard. Counsel further urged the view that the reasons and justifications by officialdom for breach of fundamental rights are numerous but that the Supreme Court in Victino Fixed Odds Ltd v. Ojo (Supra) has held that these reasons do not justify sidestepping of the rule of fair hearing. Learned counsel urged the view that ex parte orders are not inherently bad but are bad where they are absolute leaving no room for the affected party to be heard and cited Animashaun v. Bakare (2010) 16 NWLR Pt.1220 Pg.513; Deduwa v. Okorodudu (1976) 1 NMLR Pt.236 Pg.246.

Counsel argued that before we can decide whether the ex parte order was valid or not, the court should first look into the finality or absoluteness of the Order given by the lower court and referred to the dictum of Nwodo JCA (of blessed memory) in Animashaun v. Bakare (Supra); Atser v. Gachi (1997) 6 NWLR Pt.510 Pg.609; Ndigwe v. Ibekendu (1998) 7 NWLR Pt.558 Pg 586; Nwoke v. Ebeogu (1999) 6 NWLR Pt. 606 Pg.247; Kotoye v. CBN (Supra); Odutola v. Lawal (2002) 1 NWLR Pt.749 Pg.633. Counsel submitted that the elements that points to the fact that an ex parte Order is absolute are present in the ex parte distraining Orders mandated by S.104 PITA. Learned counsel stressed the importance of supremacy of the constitution and cited Lafia Local Government v. The Executive Governor, Nassarawa State & 35 Ors (2012) 17 NWLR Pt.1328 Pg.94 at 142; AG Abia v. AG Federation (2002) 6 NWLR Pt.763 Pg.264; AG Abia v. AG Federation (2003) 4 NWLR Pt. 809 Pg.124; Fasakin Foods (Nig) Co Ltd v. Shosanya (2006) 10 NWLR Pt.987 Pg.126; AG Ondo v. AG Federation (2002) 9 NWLR Pt 772 Pg.222.

On the procedure that can be adopted by the court, Ojibara Esq. argued that the court should use the blue pencil rule on the ex parte provision to make it in compliance with the constitution. Learned counsel submitted that even though the intention of the legislature in amending S.104 of PITA is admirable and commendable, the running of the blue pencil rule over the words “ex parte” will validate the section. Counsel referred to the definition of the blue pencil rule in Black’s Law Dictionary, 8th Edition at page 183 and cited AG Abia v. AG Federation(Supra) on the use of the blue pencil rule.

There is no doubt that the subject of the traverse between the parties in this appeal is taxation. What then is taxation and of what essence is it? History has it that the earliest pre-colonial tax system was practiced in Northern Nigeria due to its consistency with the principles of the prevalent Islamic religion in the region. Tax was first introduced by Lord Luggard in Nigeria in 1904 and the Native Revenue Ordinance of 1917 was passed in 1918. The Ordinance first applied to Abeokuta, Ogun State and Benin City in former Bendel State but was later extended to Eastern Nigeria in 1923. This Ordinance and others were later modified and incorporated in the Direct Taxation Ordinance No 29 of 1943, which forms the foundation of the modern Nigerian Taxation. The importance of taxation cannot be overemphasized, as it is a major source of revenue for both Federal and State Government thus being a financial source of many government projects and a chunk of its budget.

The crux of this appeal is founded on the provisions of S.104 of the Personal Income Tax Act. Before resolving the constitutionality or otherwise of the section and the procedure to be effected therein, let us first set out the provisions of the section as follows:

S.104(1) Without prejudice to any other power conferred on the relevant tax authority for the enforcement of payment of tax due from a taxable person, where an assessment has become final and conclusive and a demand notice has, in accordance with the provisions of this Act, been served on the taxable person or on the person in whose name the taxable person is chargeable, then if payment of tax is not made within the time limited by the demand note, the relevant tax authority may, in the prescribed form, for the purpose of the tax due-

(a) distrain the taxpayer by his goods or other chattels, bonds or other securities:
(b) distrain upon any land, premises, or place in respect of which the taxpayer is the owner.

(2) The authority to distrain under this section shall be in the form prescribed by the relevant tax authority.
(3) For the purpose of levying any distress under this section, an officer duly authorized by the relevant tax authority.
(4) the Judge may, on application made ex parte, authorize such officer, referred to in sub-section (3) of this section, in writing to execute any warrant of distress and, if necessary, break open any building or place in the daytime for the purpose of levying such distress and he may call to his assistance any police officer and it shall be the duty of any notice officer when so required to aid and assist in the execution of any warrant of distress in levying the distress.
(5) The distress taken pursuant to this section may, at the cost of the owner, be kept for 14 days, at the end of which time, if the amount due in respect of tax and the cost and charges incidental to the distress are not paid, the same way be sold.
(6) There shall be paid out of the proceeds to the sale, in the first instance, the cost of charges incidental to the sale and keeping of the distress and the residue, if any, after the recovery of the tax liability, shall be payable to the owner of the things distrained or to the appropriate court where the owner cannot be traced, within 30 days of such sale.
(7) In the exercise of the powers of distress conferred by this section, the person to whom the authority is granted under sub-section (3) of this section may distrain upon all goods, chattels and effects belonging to the debtor wherever same may be found in Nigeria.
(8) Nothing in this section shall be construed as authorizing the sale of any immovable property without an order of a court of competent jurisdiction.”

Now to the issue of constitutionality; can we determine the constitutionality of S.104 PITA as it is? I do not think so. I agree with the submission of Chief Fred Orbih (SAN), Olu Daramola (SAN) and the Attorney-General of Delta State that the constitutionality of Section 104 cannot be decided by reading it in isolation from other parts of the same legislation. The position of the law is that when interpreting statutes, the provisions of the statute are to be taken as a whole and the review of any section therein cannot be severed from other sections. See AG Bendel v. AG Federation (Supra).
In the instant case, there is no reasonable way S.104 PITA can be held to be constitutional or not without a perusal of the other parts of the statute. The PITA is a statute containing 109 sections all providing for different but connected aspects of tax enforcement. Thus, it will amount to an incomplete exercise to evaluate S.104 singularly without recourse to other sections, which outline procedure to be adopted before effect can be given to S.104. Below are the sections that apply to the appellant as a taxpayer in the tax enforcement process:

S.2 PITA lists the persons from whom tax is to be collected;

S.40 outlines persons chargeable and returns;

S.44 is on self-assessment of tax by individual;

S.54 allows assessment of income tax by the tax authority;

S.57 provides for service of notice of assessment;

S.58 allows for revision of assessment in case of objection;

S.59 provides for how to handle errors and defects in assessment and notice.

S.60 in establishing Tax Appeal Tribunal allows an aggrieved party to approach the Tribunal on cases arising from operation of the Act;

S.98 provides that tax is payable notwithstanding proceedings;

S.104 gives the tax authority the power to distrain for non-payment of tax.

From the above listed sections, it should be noted that S.104 is the concluding section of a long list of sections that govern tax enforcement as it relates to the appellant. The section is the concluding part of outlined process of enforcement of tax and thus a scrutiny of the constitutionality of the section cannot be done in solitude but with recourse to the other sections listed above.

Enforcement of tax no doubt affects the right of the individual to own property, right to privacy and freedom from compulsory acquisition of property as entrenched in S. 37, 43 and 44 of the constitution. The Sections state as follows:

S.37 The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communication is hereby guaranteed and protected.

43. Subject to the provisions of this constitution, every citizen of Nigeria shall have the right to acquire and own immovable property anywhere in Nigeria.

44(1) No movable property or any interest in any immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by law that, among other things-

(a) Requires the prompt payment of compensation therefore and
(b) Gives any person claiming such compensation a right of access for the determination of his interest in the property and the amount of compensation to a court of law or tribunal or body having jurisdiction in that part of Nigeria……

It is beyond contention that the appellant is entitled to the rights listed in the sections above. We must however note that the constitution itself at S.44(2) qualifies the appellant’s freedom from compulsory acquisition of property by allowing compulsory acquisition of property for the sake of enforcement of tax as follows:
(3) 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.

Owing to the provision of S. 44(2) (a) of the constitution above, the question of whether S. 104 of PITA offends the tax payer’s right to own property, privacy and freedom from compulsory acquisition of property is of no moment in matters of tax enforcement. To argue contrary will be to argue that because a debtor has freedom from compulsory acquisition of property, his property cannot be taken even when a court Order for enforcement of debt payment is given. Let us not forget that the position of a taxpayer who has failed to pay the tax due is that of a debtor. As such, to that extent, S. 104(2) of PITA is constitutional.

On whether the ex parte provision of S.104 of PITA is constitutional, we must note that the principles of natural justice are of utmost importance and can never be over emphasized in any judicial exercise. See Victino Fixed Odds Limited v. Ojo & 2 Ors (2010) 8 NWLR Pt. 1197 pg. 486; Amadi v. Thomas Aplin Co. Ltd (1972) 4 SC 228; Kano NA v. Obiora (1959) SCNLR 577; Tukur v. Government of Gongola (1989) 9 SCNJ 1. I agree with the view of Chief Fred Orbih (SAN) that the decisions to be taken under Sec.104 are too weighty to be taken in the absence of the affected taxpayer. See Nigercare Development v. Adamawa State (Supra); Kotoye v. CBN (Supra); Obasanjo v. Buhari (Supra).

The dicta of Uwais JSC in 7Up Bottling Company v. Abiola & Sons (Supra) is also apt on this that:

However, the question as to whether an ex parte order offends the principles of fair hearing depends wholly on the circumstances of the case and the statute under review. There is no doubt that ex parte applications are only used in situations where a statute permits it. Otherwise, a motion on notice is used. However, before we can conclude that the ex parte application required in this statute is unconstitutional on the basis of lack of fair hearing, let us outline the processes that should precede and follow the ex parte Order as stated in the law.

S.44 of PITA allows a taxpayer to do self-assessment of tax to know his tax liability. If he does not do so, S.54 empowers the tax authority to do the assessment of the taxpayer’s income tax. After the tax authority completes the tax assessment, it serves the assessment on the taxpayer as provided for in S.57.
The taxpayer, upon receipt of the assessment from the tax authority is empowered under S. 58 to revise the assessment and raise objection(s) if need be. In fact, such taxpayer is entitled to write to the tax authority stating his objections and the tax authority is under the obligation to look into the matter and arrange meeting(s) with the affected tax payer to resolve the discrepancies in figures. See Lagos State Internal Revenue Board v. Odusanmi (1979) NCLR 421, (1979) 3 LRN 119. Also S. 59 provides for how both the tax payer and the tax authority can handle errors and defects in assessment and notice.

Where after all the above processes, the tax payer has refused to pay and/or the parties have not been able to agree on a definite amount or other issues arise, S.60 in establishing Tax Appeal Tribunal allows an aggrieved party to approach the Tribunal on cases arising from the operation of the Act. We must however note that S.98 provides that tax is payable notwithstanding mediation or appeal proceedings.

Where all the efforts at resolving dispute and effecting tax payment above has failed, S. 104 gives the tax authority the power to distrain the tax defaulter’s property pursuant to an ex parte application to a High Court Judge.

I agree with the submission of B. O. Odigwe that a High Court Judge is not a robot who accepts any application without scrutiny and doles out court Orders. Of course the ex parte application of the tax authority must be supported by an affidavit stating that it has complied with all the other processes precedent to the application and that the tax defaulter has still refused to pay. The court will also scrutinize the application and the supporting documents to ensure that the applicant has complied with the statutory procedure before the court gives her Order.

Again, after the warrant of distress is issued against the taxpayer, he still has 14 days to contest the order in a court of law or to pay the debt before the goods can be sold. We must not forget that pursuant to the sale of the goods, the tax defaulter has priority to the proceeds of the sale after the tax has been deducted.

To my mind, the PITA affords the taxpayer, numerous opportunities of airing his objections and it is where it has been seen that he has refused to use the opportunity and has in the same vein failed to pay up the tax that the tax authority is then empowered to apply to distrain. Lets us also not forget that if the tax authority fails to convince the court that it has complied with the law, the court will reject the application even though it is ex parte and not contended by the other party. Below are the opportunities to be heard offered to the taxpayer under the PITA:

(a) The service of the notice of assessment on him by the tax authority allows him 30 days to scrutinize it and raise his objections in writing addressed to the tax authority.
(b) Upon failure to object within time, the taxpayer has the option of proceeding to the Tax Appeal Tribunal to air his grievances-S.60 PITA
(c) Upon the information of a pending motion ex parte before the High Court, the tax payer can apply to the court to put the tax payer on notice thereby converting the motion ex parte to on notice upon ability to convince the court of its need,
(d) After the warrant to distrain has been issued, the taxpayer has 14 days to pay up tax and if he intends to contest the warrant, appeal to the court of appeal.
(e) If the court of appeal upturns the taxpayer’s appeal, he still has the right to appeal to the Supreme Court.

Where the taxpayer has failed to utilize any of the listed opportunities that the law affords him to be heard, such person cannot run to the same law to cry foul.
It is settled law that when a party is given the opportunity (and in this case opportunities) to be heard and such party fails to utilize it, such party cannot hide under the umbrella of the fair hearing rule. He will fail. Again, I agree with Olu Daramola (SAN) that the position of the law is that where a party has been afforded the opportunity to be heard (in this case several opportunities) and such party fails to utilize it, the party cannot approach an appellate court and claim to have been denied fair hearing. See Newswatch Communications Ltd v. Attah (Supra).

Thus, looking at the antecedents of acts to be done by the tax authority intended at putting the tax payer on notice, allowing him to object if he wants, and the different provisions allowing the tax payer air his view, I am of the humble opinion that the ex parte provision in S.104 of the PITA is constitutional and does not offend his right to fair hearing.

On the procedure to be followed by the tax authority in enforcement of payment, the procedure has been earlier outlined and a repetition of it here will be unnecessary. What is left to be considered here is whether the respondent in this case, complied with the procedure before distraining the appellant’s properties.

The respondent sent to the appellant an assessment of tax liability valued at N19,199, 947.18 via a letter dated 10/02/2012 marked as Exhibit B3 and at page 27 of the record. The tax authority/respondent on 16/03/2012 wrote a letter inviting the appellant to a meeting for reconciling the tax position with the Board. Upon failure of the appellant to attend that meeting, the respondent on 19/03/2012 wrote another letter inviting the appellant for another tax review meeting on 22/03/2012 at page 31 of the record.

The appellant failed again to attend the tax review meeting stated for 22/03/2012 and on 27/03/2012, the respondent wrote another letter to the appellant inviting it for another tax review meeting stated again for 30/03/2012 as in page 32 of the record. Again, the appellant did not honour the invitation. On 25/04/2012, the respondent wrote another letter inviting the appellant for tax review meeting stated for 30/04/2012 but later postponed it to 2/05/2012 as in pages 33 and 34 of the record. As contained in page 35 of the record, the respondent, on 15/05/2012 wrote another tax review meeting invitation letter to the appellant stated for 21/05/2012. The appellant still failed to attend the meeting.

On 23/05/2012, the respondent wrote the 7th letter of invitation to the appellant and the meeting was stated for 28/05/2012 yet the appellant failed to attend. On 31/05 /2012, the respondent in its 8th letter to the appellant fixed another meeting tor 5/06/2012. The 9th letter was inviting the appellant for a meeting stated for 20/07/12 but the defaulting tax payer/appellant still did not attend the meeting. The 10th letter of invitation for tax review was written by the respondent to the appellant on 16/08/2012 for a meeting slated for 28/08/2012.

Finally, on 7/09/2012 there was a tax review meeting between both parties at the State Board of Internal Revenue where the appellant’s tax liability was reduced to N15,199,947.18 and the appellant was given seven days to pay up the said sum. The appellant paid the sum of N2,317,350.75 to the tax authority on 12/09/2012 being PAYE tax for 2005-2010 as contained in pages 25 and 26 of the record.

It is overwhelmingly beyond doubt that the respondent/tax authority had exercised unreasonable patience with the appellant who kept frustrating the respondent’s invitation for tax review. How then can such party who was given ten different invitations for tax review meeting but failed to attend, now come to the court to have been deprived of fair hearing? I am of the firm and humble view that the respondent followed the provisions of PITA even to an overstretched extent and that the distraining order given against the appellant was a well deserved one.

Let us not forget that the tax being scuffled over is the tax of the appellant’s employees from 2005-2010 which would have long time been deducted from the employees’ salaries but which the appellant failed to remit to the appropriate authority. The tax of 2011 to date has not yet become an issue. I must say this is a most despicable way for any taxpayer to act and it is seriously detrimental to the development of any nation. Following the decision of the court in Phoenix Motors Ltd v. NPFMB (Supra), I am of the view that since the statute under scrutiny is revenue oriented, the interpretation must be construed liberally in favour of deriving revenue by government in the interest of the public.
I also firmly agree with the view of the Hon. AG of Lagos, Mr Ade Ipaye that tax payment is an obligation of a citizen according to S.24(f) of the Constitution. Failure of the citizen to pay tax shall strip him of the protection clothed him by S.44(1) of the constitution.

For all the reasons set out above by me, all the issues in controversy being resolved against the Appellant, the appeal is totally without merit and is hereby dismissed.

I cannot conclude this judgment without expressing appreciation of the Senior Counsel and other learned counsel who were invited as amicus curiae to assist the court in the determination of some of the questions in controversy in this appeal. All the learned counsel were gracious to submit educative, brilliant and incisive briefs which greatly assisted the Court in the determination of this appeal. They filed the various briefs at their own expense and all who appeared, appeared at their own expense of time and energy. Their graciousness assures me that there are still veritable ministers in the Temple of Justice.

The ruling of Hon. Justice J. I. Acha of the Edo State High Court delivered in Suit No:B/RC/63/2012 on 6/12/12 is hereby affirmed. No order as to costs.

IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A.: I have had a preview of the Judgment prepared and just delivered by my learned brother, the Hon. Justice H. M. Ogunwumiju, JCA. Having equally read the briefs of argument of the learned senior counsel to the respective parties and the amicus curie vis-a-vis the records of appeal, I cannot but concur with the reasoning and conclusion thereby reached in the said Judgment, to the effect that the instant appeal is without merits, thus ought to be dismissed.
It’s my privilege to adopt the said reasoning and conclusion as mine, and accordingly dismiss the appeal. The ruling of the Hon. Justice J. I. Acha of the Edo State High Court, delivered on 06/12/12 in Suit No. B/RC/63/2012, is hereby affirmed. No order as to costs.

TOM SHAIBU YAKUBU, J.C.A.: I had the privilege of reading the draft of the judgment prepared and rendered by my Lord, H. M.OGUNWUMIJU,JCA.
I am in complete agreement with the reasoning and conclusion contained in the lead judgment, that having resolved all the issues against the appellant, the appeal is devoid of merit and it is accordingly dismissed.
I affirm the ruling of J. I. Acha, J., of the Edo State High Court delivered in suit No.B/RC/63/2012 on 6/12/12.
Each side to bear own costs.

Appearances

Chief Alfred Eghobamien (SAN) appeared with C. A. Erahon and B. O. OsarkhaeFor Appellant

AND

Ken Mozia (SAN) appeared with Oluwole Iyamu Solicitor General & Permanent Secretary, Edo State; H. G. Erabor Esq, C. U Ozua and K. O. Odabi Assistant Chief State Counsel Edo State and Miss M. O. Eruaga State Counsel all appeared for the respondent.
Chief F. O. Orbih (SAN) as amicus curiae appeared with E. A. Kade and B. O. Edo-Osagie (Miss).
Ade Ipaye, Attorney -General and Commissioner for Justice, Lagos State appeared as amicus curiae with O. Akinsola.
A. M. Lawal adopted the brief of Olu Daramola (SAN) as amicus curiae to the court.
Dr Oladapo Olanipekun also appeared with Ademola Adesina and O. Taiwo Miss as amicus curiae to the court.
B. O. Odigwe Director Legal Research and Review adopted the brief of the Attorney-General of Delta State. With him O. P. Ikpemina Senior State Counsel, Delta State
O. Ojibara adopted the brief of Paul Usoro (SAN) as amicus curiae.For Respondent

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