WILBROS NIGERIA LIMITED v. ATTORNEY GENERAL OF AKWA IBOM STATE & ANOR.
(2007)LCN/2245(CA)
In The Court of Appeal of Nigeria
On Thursday, the 22nd day of February, 2007
CA/C/122/2005
RATIO
INTERPRETATION OF STATUTES: INTERPRETING SECTION 251 (1) OF THE 1999 CONSTITUTION
Notwithstanding anything to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil cases and matters; (a) relating to revenue of the Government of the Federation in which the said government … is a party; (b) connected with, pertaining to, the taxation of companies and other bodies, etc. PER VICTOR AIMEPOMO OMAGE, J.C.A.
JUSTICES
VICTOR AIMEPOMO OMAGE Justice of The Court of Appeal of Nigeria
NWALI SYLVESTER NGWUTA Justice of The Court of Appeal of Nigeria
MOJEED ADEKUNLE OWOADE Justice of The Court of Appeal of Nigeria
Between
WILBROS NIGERIA LIMITED – Appellant(s)
AND
ATTORNEY GENERAL OF AKWA IBOM STATE & ANOR. – Respondent(s)
VICTOR AIMEPOMO OMAGE, J.C.A. (Delivering the Leading Judgment): This is an appeal by Wilbros Nigeria Limited, the applicant to a motion filed in the Federal High Court sitting in Uyo – Akwa Ibom State. The motion arose from the writ of summons and statement of claim filed by the plaintiff in which he claimed against;
1) The Attorney General of Akwa Ibom State
2) Akwa Ibom State Board of Internal Revenue, thus:
“i) A declaration that the government of Akwa Ibom State has no right or authority to impose, charge or collect either directly or indirectly any pay as you earn tax, withholding tax, and development levy from the plaintiffs and its employees whether national or expatriates.
ii) An order of injunction to restrain the defendants, their agents and or privies from imposing, charging or collecting any pay as you earn tax, withholding tax and or development levy from the plaintiffs.
iii) An order of injunction to restrain the defendants, their servants, agents and or privies from seizing the property or interfering in any manner whatsoever with the plaintiffs operations in an attempt to enforce the payment of the said pay as you earn (PAYE) tax, withholding tax and or development levy.”
The respondents filed a memorandum of appearance, and the respondent filed an application for accelerated hearing which was withdrawn, the defendants/respondents filed their statement of defence; and hearing commenced on 23/1/04.
In the said statement of defence filed on 13/1/04, the defence raised in its paragraph 16 the issue of the jurisdiction of the court to hear the suit whereupon the applicant filed a notice for determination of the jurisdiction of the court. The trial court fixed hearing of the motion on notice for interlocutory injunction for 23/1/04. In it the plaintiff/applicant urged the court to hold that there are many serious issues to be considered in the substantive suit; one of which is whether the plaintiff/applicant is liable to pay withholding taxes, development taxes, PAYE deductions from its employees to the defendants/respondents especially against the backdrop of the fact that the plaintiff/applicant is not resident in Akwa Ibom State, but in Port Harcourt, Rivers State; and that the employers of the applicant went to Akwa Ibom State to do a temporary work. The said issue submitted for determination by the applicant in the motion is that the applicant are entitled to the protection of the court from extortion, freedom from payment of double compensation. Balance of convenience which the applicants submits is in their favour. The applicant seeks the maintenance of status quo pending the hearing of the suit. The respondents filed a counter affidavit in which they deny the averments contained in the affidavit and counter affidavit in support of the applicants’ motion. They argued at the hearing in response to the issue raised by the respondent of a preliminary objection to the jurisdiction of the Court … submitted that the issue controversy is whether or not the tax demanded of the applicant is a personal income tax accruable to the State or the Federal Government and that if the demand of respondent/applicant is a personal income tax or pay as you earn, development levy for the State, then the Federal High Court has no jurisdiction to hear the suit of the plaintiff.
In response the plaintiff object and say that the objection of jurisdiction by the respondent should have been brought by motion. The respondent submitted that the application objecting to the jurisdiction of the court need not be taken by a written motion, and that the objection may be made orally. In its ruling, which is the subject of this appeal, the learned court ruled thus per; the Hon. Justice G. E. Olotu on 17/3/2005 that the argument and submission of defendants are:
“(1) That the jurisdiction of this court to entertain tax matters under section 251(b) of the 1999 Constitution does not extend to matters relating to personal income tax due to States;
(2) That the jurisdiction of this court to entertain tax matters under section 251(b) of Constitution is limited to companies income tax and taxes subject to income tax of persons subject to the Federal Government;
(3) That the subject matter of this suit relates to personal income tax of the plaintiff’s employees resident in Akwa Ibom State and withholding taxes of individuals.”
The respondent’s counsel referred to the applicable law, or sections 2(1)(b) and 77 of the Personal Income Tax Act, and to the applicant’s writ of summons. The respondent also submitted that the issue of jurisdiction of the court may be made orally. See Icheoku v. Ebai (2001) WRNL III at 113. The plaintiff responded that the subject matter of this suit is illegal taxation imposed by the defendant on the plaintiff and further submitted thus:-
That the defendant exceeded its revenue portfolio by demanding development levy from the plaintiff, and that the expatriate staff demand from the plaintiff is outside the defendant’s portfolio of taxes.
That by Section 7(1)(b)(i) and C(3) of the Federal High Court Act, section 230 (1)(b) of the 1979 Constitution, this Court, Federal (High Court) has original jurisdiction to hear and determine matter pertaining to the taxation of companies which includes the development tax and expatriate levies imposed by the defendant on the plaintiff, plaintiff refused to pay. He submitted that in S.P.D.C. (Nig.) Ltd. v. H. B. Fisherman (2002) 4 NWLR (Pt.758) 505, pg 509; S.P.D.C. (Nig.) Ltd. v. Maxon (2001) 9 NWLR (Pt.719) 541, it was held that the defendant should have challenged the jurisdiction of the court by a motion on notice and referred to Onye v. Ikema (1999) 4 NWLR (Pt.598) 198 at 201. The plaintiff asked that the court may transfer the suit to an appropriate court if it finds that the objection was properly taken.
In the court below, the Federal High Court held that the objection to jurisdiction is improperly taken, and that the proper court with jurisdiction over the matter of pay as you earn is the High Court of a State the Akwa Ibom State to which it transmitted the plaintiff’s claim.
The plaintiff was not satisfied with the ruling of the court it filed three grounds of appeal, and formulated three issues namely;
“(a) Whether the learned trial Judge was right in declining jurisdiction to hear and determine the suit.
(b) Whether the learned trial Judge was right in holding that the subject matter of the suit which involved illegal imposition of non-existent and Federal taxes on the appellant was in respect of taxes and levies accruable to Akwa Ibom State.
(c) Whether the learned trial Judge properly evaluated the documentary affidavit evidence before him and if he did not whether that did not affect his said ruling subject of this appeal.”
I have considered the submission of the appellant in the brief filed on 13/01/06 and the issues for determination formulated by the respondent in his brief of the issues which read in part thus:
a) Whether the learned trial Judge was right in declining jurisdiction to hear and determine this suit having properly evaluated the evidence before the court.
b) Whether the learned trial Judge was right remitting the matter to the High Court of Akwa Ibom State for hearing.”
Clearly, the two sets of issues overlap each other only in semantics not in substance and the prompt answer to both sets of issues is yes, the learned trial court was right in declining jurisdiction for issues of the appellant (A) and (C). The same answer for issue A and B of the respondent/appellant’s issue the answers require some clarification in what the trial court decided. The trial court did not decide that the issue before the court included illegal imposition of taxes, and such matter was not before the court below. What is contained in the submissions of the defendant who raised orally the preliminary objections and which the trial court has carefully considered on the writ of summons filed by the appellant are in respect of revenue accruable to Akwa Ibom State in respect of taxes and levies due from the plaintiff’s employees to the Akwa Ibom State which is not in any way taxation on a company.” The contents of part of issue B of the appellants brief to wit “whether the learned trial Judge was right in holding that the subject matter of the suit which involved illegal imposition was ill infact of taxes and levies accruable to Akwa Ibom State.” The learned trial Judge certainly did not rule on any illegal taxes and denied that there was an illegal imposition of tax.
“My Lords, to identify the issue in controversy, a recourse has to be made to the claim of the plaintiff on page 2 in the court below. It states thus in the endorsement. The plaintiff’s claim as reproduced in the earlier page of this judgment the subject matter being a declaration that the Akwa Ibom State has no right, power or authority to impose, charge or collect either directly or indirectly any pay as you earn (PAYE) tax, withholding tax, development levy from plaintiff’s employees whether national or expatriate.” Two prayers for injunction to restrain the defendants.
To determine the issue the learned trial Judge of the Federal High Court considered the provision of the Personal Income Tax as contained in Decree No. 104: an imposition of tax and income chargeable in Section 2, 1(a). It provides for liability for the person who shall pay tax in a prescribed year and to the State where the person resides for that year.
The applicant has submitted that section 251 1(b) of the Nigerian Constitution 1999, prescribed that the payment of tax incident relating to, arising from an ancillary to matters mentioned in subsection of the Constitution are taxes due to the Federal Government, and that such matters are within the jurisdiction of the Federal High Court.
“My Lord, a recitation of the provision of section 251(1) of the 1999 Constitution of Nigeria will show the case in the submission of the appellant it reads;
“Notwithstanding anything to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil cases and matters;
(a) relating to revenue of the Government of the Federation in which the said government … is a party;
(b) connected with, pertaining to, the taxation of companies and other bodies, etc.”
It is apparent from the writ of summons filed by the appellant that his claim is not in respect of a claim on the revenue of the Federal Government. Furthermore, the expressed letters to the appellant contained in the record of proceeding, dated 20/8/2001, 22/7/02, 3/7/2002, 22/7/2002 show that the respondent demand from the appellant is in respect of inadequate remittance of expatriate tax, which is personal PAYE (Pay as you earn for workers of the appellant who work within the Akwa Ibom State.
My Lords, I will probe no further lest I inadvertently prematurely determine the matter in dispute. It is clear that the confusion and error of the appellant is a fracture to recognize that section 251(1)(b) of the Constitution qualifies the provision of section 251. This, at the same time excludes the tax accruable to the State and the eligible court to determine issues of tax accruable to the Federal Government.
My Lords, I have considered and discussed in the judgment above the ruling of the Federal High Court on this appeal, I find no error in the decision and I affirm it in its entirety when I say yes to the principal issues in this appeal, that issue of tax before the Court is on personal income tax, PAYE and the eligible court to try the issue is the State High Court, Akwa Ibom State.
It is settled law, that an objection may be raised of the jurisdiction of the court at any stage of the proceedings and decided authorities do not rule out objections made orally. The court also allows such an application to be made by motion. The appeal fail, it is dismissed. The matter is directed to be remitted to the High Court Akwa Ibom State for hearing and final determination. There will be costs of N2,500 in favour of the respondent.
NWALI SYLVESTER NGWUTA, J.C.A.: I have read in advance the judgment just delivered by my learned brother, Omage, JCA.
The appellant (plaintiff in the court below) is a Limited Liability company incorporated in Nigeria with its registered head office at 216 Kofo Abayomi Street, Victoria Island, Lagos. It has a permanent principal place of business in Choba, Port Harcourt, Rivers state. In January 2001, the appellant was engaged in a contract in Eket, Akwa Ibom State. It was so engaged till the first week in July 2001, according to the appellant.
A dispute arose between the appellant and the respondents (defendants in the court below) over the payment of Pay-as- You Earn (PAYE) tax, with-holding tax and development levy deducted from the emoluments of appellant’s employees resident and working in Akwa Ibom State, both Nigerian Nationals and Expatriates. The appellant resisted the respondent’s claim to the payment of the taxes and levies.
On 16th December, 2003 the appellant issued a writ of summons on which are endorsed its claim against the respondents:-
“1. A declaration that the government of Akwa Ibom state has no right, power or authority to impose charge or collect either directly or indirectly any Pay-AS-YOU-Earn (PAYE) tax, with holding tax and Development Levy from plaintiff and its employees (whether National or Expatriate).
2. An order of injunction to restrain the defendants, their servants, agents and or privies from imposing, charging or collecting any Pay-AS- YOU-Earn (PAYE) tax with-holding tax or development Levy from the plaintiff.
3. An order of injunction to restrain the defendants, their servants, agents and or privies from seizing the property or interfering in any manner whatsoever with the plaintiff’s operations in an attempt to enforce the payment of the said Pay-As- You-Earn (PAYE) tax withholding tax and or Development Levy.”
On the same day 16/12/03 the appellant, by way of motion on notice brought pursuant to S.13 of the Federal High Court Act; and Order 34 rule I Federal High Court (Civil Procedure) Rules prayed the court for
“An order of interlocutory injunction to restrain the defendants/respondents and their servants, agents and or privies from imposing, charging or collecting or continuing to impose or collect from the plaintiff/appellant any Pay-As- You-Earn (PAYE) tax, with-holding tax and or development levy pending the hearing and final determination of the substantive suit”.
This was supported by a 23 paragraph affidavit deposed to by Austin Aguguo, Legal manager of the applicant.
The respondents entered appearance on 9th January, 2004 and on the same date filed a motion on notice, pursuant to order 9 of the Federal High court (Civil Procedure) Rules asking for accelerated hearing of the suit. The motion was however withdrawn and struck out.
On 23/1/04, the appellant filed a further and better affidavit in support of its motion of 16/12/2003. It is of 9 paragraphs and deposed to by its litigation officer, Richard Ujunwa.
In the course of reply to the marathon submission of the appellant’s counsel, learned counsel for the respondents raised orally the issue that the Federal High Court lacked jurisdiction in the matter. As one would expect the learned trial Judge took, first of all, counsel’s submissions on the jurisdictional dispute. In a considered ruling delivered on 17/3/2005, the trial court acceded to the argument of the learned counsel for the respondents that it had no jurisdiction to entertain the matter and ordered a transfer of the suit to the Akwa Ibom State High Court for adjudication.
Aggrieved by the ruling, the appellant appealed to this court on three grounds, hereunder reproduced, shorn of their particulars:-
1. The learned trial Judge erred in law when he held that he had no jurisdiction to hear the suit.
2. The learned trial Judge en-ed in law and misdirected himself on facts when he held that the subject matter in the suit is “in respect of revenue accruable to Akwa Ibom state in respect of taxes and levies due from plaintiff’s employees to Akwa Ibom state and not in any way taxation on the company. The alleged illegality of the taxes demanded of the plaintiff in these circumstances would not change this fact.
3. The learned trial Judge en-ed in law and misdirected himself on facts in evaluating the affidavit evidence before him and thereby came to a wrong decision when he held as follows: “both the plaintiff and defendants were both the right in their summation of the subject matter of the suit.”
In compliance with the rules and practice of the court, the parties herein through their respective counsel filed and exchanged briefs of argument.
Learned counsel for the appellant framed three issues, one from each ground of appeal. The issues are:-
“a. whether the learned trial Judge was right in declining jurisdiction to hear and determine the suit.
b. whether the learned trial Judge was right in holding that the subject matter of this suit which involved illegal imposition of non-existent and federal taxes on the appellant was in respect of taxes and levies accruable to Akwa Ibom State.
c. whether the learned trial judge properly evaluated the documentary affidavit evidence before him and if he did not, whether that did not affect his said ruling, subject of this appeal.”
In his own brief of argument, learned counsel for the respondent distilled two issues, from the appellant’s grounds of appeal. The issues presented are:
“(a) Whether the learned trial Judge was right in declining jurisdiction to hear and determine this suit having properly evaluated the evidence before the court.
(b) whether the learned trial Judge was right in remitting the matter to the High Court of Akwa Ibom State for hearing.”
There is need to point out here that it is undesirable for counsel to frame or formulate an issue in respect of each ground of appeal as was done in this appeal. See Anie & Ors. v. Uzorka & Ors (1993) 8 NWLR (Pt.309) 1 SC.; A-G., Bendel State v. Aideyan (1989) 4 NWLR (PUI8) 646. Issues for determination in an appeal are not formulated to coincide with the number of grounds of appeal. See Nwidenyi & Ors. v. Aleke (1996) 4 NWLR (Pt.442) 349.
In their formulation of issues for determination in this appeal, learned counsel for both sides appeared to have been carried away by their respective positions, each injecting value judgment into the brief. In appellant’s issue 2 the phrase “which involved illegal imposition of non-existent and Federal taxes on the appellant” elevated the appellant’s counsel subjective views to the status of established fact. Learned counsel can raise an issue as to the legality vel non of the taxes and levies or whether or not they exist or whether or not they accrue to the Federal Government but counsel, learned though, is not competent to pronounce on the above issues and incorporate his pronouncement into an issue for the court to determine. In the same vein, learned counsel for the respondent embroidered his issue one with the phrase “having properly evaluated the evidence before the court.”
This assumes that the question of proper evaluation of evidence by the trial court has been resolved and there is no need to deal with that issue by the court in determining the appeal. It is one thing to raise the issue of evaluation of evidence as an issue and persuade the court one way or the other but the court cannot act on counsel’s assumption that there was proper evaluation of evidence before the court.
An issue for determination in appeal is a short question raised against one or more grounds of appeal. It is intended to guide to the arguments in support of the grounds of appeal. See Angyu & Anor v. Malami (1992) 9 NWLR (Pt.264) 242.
The short question is best left without embellishment with learned counsel’s personal opinion.
Issue 1 in the respondent’s brief is a recast of the appellant’s issue 1 with the addition of proper evaluation of evidence before the trial court. Issue 2 in the respondent’s brief does not appear to relate to any of the three grounds of appeal. The respondents did not cross-appeal and so cannot frame issue outside the grounds of appeal. They can adopt the issues as framed by the appellant or give the issues a slant in favour of their case. The said issue is ignored in this appeal as not only incompetent but completely valueless in the determination of the appeal. See Omo v. JSC Delta State (2000) 7 SC (Pt.11) 1; (2000) 12 NWLR (Pt. 682) 444.
I will determine the appeal on the three issues formulated in the appellant’s brief of argument.
At the hearing of the appeal, learned counsel for the appellant adopted and relied on the appellant’s brief of argument and urged the court to allow the appeal. Learned counsel for the respondent adopted and relied on the respondent’s brief and urged the court to dismiss the appeal and affirm the ruling of the lower court.
In dealing with issue one in his brief, learned counsel for the appellant Chiabu Onuobia Esq. referred to S. 7(1)(b)(i) of the Federal High Court Act, 1990, S. 7 (1)(c), 7(3) of the Federal High Court (Amended) Decree No 60 of 1991 and S. 251(1)(b) of the Constitution of the Federal Republic of Nigeria, 1999 and submitted it was wrong for the trial court to decline jurisdiction to hear and determine the suit. He argued that the provisions cited above vest jurisdiction in the Federal High Court to determine civil causes and matters connected to taxation of companies. Learned counsel construed S. 7(3) of Decree (now Act) No. 60 of 1991 to confer jurisdiction on the Federal High Court in matters not directly within S. 7(1) & (2) thereof, that is taxation of companies, but pertains to matters specifically mentioned in S. 7(1) of the Act. Counsel contended that “Expatriate taxation” as distinct from the Pay-As-You-Earn (PAYE) if it existed would have been a Federal tax. He argued that the illegal imposition on the appellant of the non-existent Expatriate taxation was a direct imposition of a tax on the appellants income and this is a matter within the jurisdiction of the Federal High Court. Counsel submitted that since no law in Nigeria provided for payment to a State of any tax by an expatriate the imposition of such tax on the appellant is a matter within the jurisdiction of the Federal High Court as it is a matter connected with taxation of the appellant, a company, more so when the appellant had no employees working in Akwa Ibom after July, 2002. Since there were no employees from whom the deduction could be made such tax imposed would have to come from the income of the appellant as a company and the Federal High Court has jurisdiction to determine any dispute arising therefrom. He referred to: Shell Petroleum Development Company Ltd v. H.B Fisherman (2002) 4 NWLR (Pt.758) 505, 517 paras. D-E: Shell Petroleum Development Nigeria Ltd. v. Otelemaba Maxon (2001) 9 NWLR (Pt.719) 541, 553 paras. H.P, 554 paras. A-D: Shell Petroleum Development Company Nigeria Ltd. v. Isaiah (2001) 11 NWLR (Pt.723) 168, 184 paras. E-F for the Supreme Court’s definition of the phrases “arise from; “pertains to” and the word “ancillary”. He urged the court to adopt the definitions of the words and phrases and to hold that the Federal High Court, Uyo, Akwa Ibom State has jurisdiction to hear matters arising from, or connected with, the taxation of the appellant by the respondents as there were no employees from whose earnings the tax could be deducted.
In her own submission on issue one learned counsel for the respondents Ekaette Henry Esq. referred to S.251 (1) of the 1999 constitution of the Federal Republic of Nigeria and contended that the subject matter of the suit from which this appeal arose does not fall within any of its subjections and ipso facto the matter is not within the jurisdiction of the Federal High Court specified in the said section. Learned counsel referred to Personal Income Tax Act for persons liable to Federal taxation. She said that the Taxes and Levies (Approved list for collection) Act 1998 states the tiers of government to collect various forms of tax but does not list the Federal High Court among the courts to entertain matters of defaulting tax payers. She relied on Shittu v. N.A.C.B Ltd. (2001) 2 WRN 19 of 20; (2001) 10 NWLR (Pt. 721) 298. Counsel referred to the claim endorsed on the writ of summons and the appellant’s statement of claim and pointed out that the appellant has challenged the authority of the respondents to impose, charge and/or collect Pay-AS-You-Earn (PAYE) tax, with-holding Tax and Development Levy from the appellant’s employees and contractors/Suppliers. She argued that the combined effect of sections 7(1)(a) (2) and 80 of the Personal Income Tax Act and section 1(1) and Part II of the Schedule to the Taxes and Levies (Approved List for collection) Act No 21 of 1998 is that Personal Income Taxes in the form of Pay-As- You-Earn (PAYE) tax, with-holding tax (individual only) and development levy (individuals only) accrue to the state Government. Counsel argued that since the said revenues are due to the state it is the state High Court that can hear and determine any dispute between the parties, adding that the Revenue Court of Akwa Ibom State has original jurisdiction to determine matters of unremitted PAYE, with-holding tax and development Levy to the 1st respondent. She contended that the taxes specified in the letters to the appellant are not company income taxes. They are taxes which the appellant, as agent of the Akwa Ibom State Government for the purpose of deducting the taxes from its employees did deduct but failed to remit to the 1st respondent.
In determining this appeal, I shall refer to the subject matter Pay-As-You-Earn (PAYE) tax, with-holding tax and Development Levy collectively as the revenues. The appellant sought a declaration that the 1st respondent has no right to collect the revenues from its employees as well as an order to restrain the respondents or their agents from imposing or collecting the revenue or in any manner interfering with the appellant’s operation in an attempt to enforce the payment of the revenues. The appellant’s argument in issue one, shorn of its embroidery, is that after July 2002, it had no employees in Akwa Ibom State from whose earnings it could make deductions and remit to the 1″ respondent and if it had to meet the demand of the respondent it would have to pay from its income and this would amount to a tax on the income of a company, a matter within the exclusive jurisdiction of the Federal High Court in S. 251(1) of the Constitution. Expatriate taxation where it exists is a Federal matter and there is no law in Nigeria providing for expatriates to pay tax to a state Government. Implicit in the appellant’s argument is that the respondents’ demand would have been met by the appellant if it had employees within the state. In other words, the respondents would be entitled to enforce their demand if only the appellant had employees in the State from whose earnings the deductions could be made. With due respect to learned counsel, this is at direct odds with the claim that the respondents have no right to make such demand in the first place. In any case, the demand conveyed in the letters from the respondents to the appellant are predicated on the appellant having its employees working and earning wages within the borders of Akwa Ibom State. If the contrary is the case as asserted by the appellant then that is a defence to any action to enforce the demand and in this case it would constitute the appellant’s case for meeting the respondent’s demand. Again if it is established at the trial that the appellant has no employees in Akwa Ibom at the material time the appellant would not be required to meet the respondent’s demands and the issue of company’s taxation would not arise. In any case, the Supreme Court’s definition of the phrases “arise from, pertain to” and the word “ancillary” in the cases relied on by the appellant cannot be employed to bring the subject matter within the exclusive jurisdiction of the Federal High Court. I accept the submission of learned counsel for the respondents that the revenues in question accrue to Akwa Ibom State and the State High Court can hearand determine matters arising therefrom except that the Revenue Court of Akwa Ibom State has original jurisdiction to determine matters relating to the recovery of such revenue. The issues raised by learned counsel for the appellant in his argument relate to the merit of enforcing the respondent’s demand. They are not issues of jurisdiction and the argument runs counter to the appellant’s claim. There is no suggestion that the respondents attempted to impose, and or collect tax from the appellant’s income as a company as distinct from demand that the appellant remits to the respondents revenue deducted from its employees in Akwa Ibom State.
This issue is resolved against the appellant.
In issue 2, the appellant argued once more that it is not resident in Akwa Ibom State and residency determines the state to which payment of taxes is made. It is submitted for the appellant that since the appellant does not reside or have employees in Akwa Ibom, it had no employees from whose wages to meet the demand of the respondent and in the circumstance such demands amount to indirect tax on the appellant’s income as a company. According to learned counsel for the appellant, the demand for taxes is an indirect imposition of a non-existent tax on the appellant and if such tax exists it is a Federal tax and its imposition on the appellant is illegal, thus bringing the suit within the jurisdiction of the Federal High Court, Uyo. Counsel impugned the reliance of the trial court on Shittu’s case (supra) on the ground that the facts of the cases are not the same. He relied on Concord Press (Nig.) Ltd. v. Olutola (1999) 9 NWLR (Pt.620) 578 at 599.
In issue 2, learned counsel for the respondent dealt with an issue I have said did not arise for either the ruling or the grounds of appeal. The issue before the court was on jurisdiction and the parties did not join issues on the transfer of the case if the court determines it has no jurisdiction to hear it.
This issue could have been conveniently argued together with issue one. The demand for revenue made by the respondents on the appellant does not constitute an imposition of tax on the earning of the appellant for the mere fact that the appellant had no employees from whose earnings to deduct and remit the taxes to the respondent.
The question of whether or not the respondents are entitled to their demands on the appellant goes to the merit of the case and must be separated from the threshold issue of which court has jurisdiction to determine whether or not the respondents are entitled to enforce their demand on the appellant. Even if the demand is illegal imposition on the appellant as argued by its counsel, it does not ipso facto become a tax on the income of a company. In any case, it is my view that the issue of illegality will not arise just because the respondents are not entitled to their demands or that there is no law to back up the demand. The court’s reliance vel non on Shittu’s case can hardly affect the court’s ruling that the suit is:
“in respect of revenue accruable to Akwa Ibom State in respect of taxes and levies due from plaintiff’s employees to the Akwa Ibom State and not in any way taxation on the Company. The alleged illegality of the taxes demanded of the plaintiff in those circumstances would not change this suit”.
This issue is resolved against the appellant.
In issue 3, it was argued for the appellant that the learned trial Judge misdirected himself in evaluation of the affidavit evidence when he held that:
“both the plaintiff and the defendants were both right in their summation of the subject matter of the suit”.
It was the appellant’s case that both the appellant and the respondent were not and could not have been right in the appreciation of the issue at stake in the suit at the same time. Counsel argued that if the appellant was right in its summation of the subject matter of the suit then the court was wrong to say it had no jurisdiction in the matter. The learned counsel for the respondents did not deal with the appellant’s issue 3. Be that as it may, the word summation means summary or summing up etc. See Longman: Dictionary of Contemporary English New Edition page 1446. It also means the act of adding, an aggregate, accumulation etc. See The New Webster’s Dictionary of the English Language International Edition, page 991. In the light of the above, the meaning of the trial Judge’s dictum complained of by the appellant is that the parties summarized their respective positions properly. That they properly summarized their positions on the issue in controversy does not imply an agreement on the resolution of the issue. I do not agree with the appellant that both sides cannot be right in their appreciation of the issue at stake. A common appreciation of an issue by the contending parties is not the resolution of the issue. One has to appreciate an issue before he can agree or disagree with it. In any case, the learned trial Judge did say that: “..the parties differ on what the subject matter of the suit is … ” See page 184 of the records. There is nothing on the records suggestive of the appellant’s absurd contention that the trial court held that the parties agree simultaneously that the Federal High Court has and does not have jurisdiction in the matter. However, the issue before the court and which the court did resolve was the issue of jurisdiction and not a summation of the subject matter of the suit by the parties.
The appellant merely indulged itself in semantics. The issue before the court was clear from claim before the court. See Tukur v. Govt. of Gongola State (1989) 4 NWLR (Pt.117) 517; Yalaju-Amaye v. A.R.E.C. Ltd. (1990) 4 NWLR (Pt.145) 422. The appellant ought to, but failed to specify the documentary affidavit evidence the court failed to evaluate properly.
I resolve the issue against the appellant.
For the foregoing and the fuller reasons in the judgment, I also dismiss the appeal and adopt the consequential orders, including orders as to costs.
MOJEED ADEKUNLE OWOADE, J.C.A.: I have had the privilege of reading in draft the judgment of my learned brother, Omage, JCA. I agree with the reasoning and conclusions and I abide with the consequential orders.
Of particular importance in this case is the scope of the jurisdiction of the Federal High Court in relation to taxation under section 251(1)(b) of the 1999 Constitution as amended. Clearly and as rightly pointed out by the learned trial Judge in this case, the jurisdiction of the Federal High Court to entertain tax matters under section 251(1)(b) of the 1999 Constitution as amended is limited to and connected with the taxation of companies and other bodies established or carrying on business in Nigeria and all other persons subject to Federal Taxation and does not extend to the personal income tax or withholding taxes of individuals that are not subject to Federal Taxation.
A similar case as the present one is the decision of the Court of Appeal (Kaduna Division) in A. M. Shittu v. Nigerian Agricultural & Co-operative Bank Ltd. & 2 Ors (2001) 10 NWLR (Pt.721) 298 at 313 – 318. In that case, the Court of Appeal was called upon to determine “Whether the Federal High Court, Kano Division can properly assume jurisdiction as it did over the plaintiff/respondent’s claim which bothers on Personal Income Tax as a revenue accruable to Jigawa State Government in view of the combined provisions of the Personal Income Tax Decree No. 104 of 1993 and the Constitution (Suspension and Modification) Decree No. 707 of 1993.”
The Court of Appeal answered the question in the negative, unanimously allowed the appeal and held that the Federal High Court could not assume jurisdiction on personal income tax as a revenue accruable to Jigawa State Government. Obadina, JCA, who read the lead judgment held at P. 306 that:
“Section 7(1) of the Federal High Court Act, 1973 as amended by Decree No. 60 of 1991 does not confer jurisdiction on the Federal High Court to try any civil cause or matter connected with or pertaining to the revenue of the government of a State or any authority established by the Government of a State. On the contrary, Section 7(1)(a) specifically confers exclusive original jurisdiction on the Federal High Court to try civil causes and matters connected with or pertaining to the revenue of the government of the Federation or any authority established by the Government of the Federation.”
And the learned Justice of the Court of Appeal added at page 306:-
There is no provision, express or implied, in the Personal Income Tax Decree No. 104 of 1993 conferring jurisdiction on the Federal High Court to try and determine civil causes and matters connected with or pertaining to the revenue accruable to the government of a state by virtue of the provisions of the Decree. For the subject-matter such as the one in the instant case on appeal to fall within the jurisdiction of the Federal High Court by virtue of section 7(1)(t) and (u) of the Federal High Court Act, 1973 as amended by Decree No. 60 of 1991, there must be an express provision in the Personal Income Tax Decree No. 104 conferring jurisdiction on the Federal High Court to try and determine causes and matters connected with or pertaining to the revenue accruable to the government of a State ”
For these reasons and the fuller ones contained in the judgment of my learned brother, Omage, JCA, I also dismiss the appeal.
Appeal dismissed
Appearances
Hon. Chiabu Onuobia, Esq.For Appellant
AND
Ekaette Henry [Mrs], Chief State Counsel, Ministry of JusticeFor Respondent
