Tax Appeal Tribunal Nullifies N3.2b Assessment, Restrains Kano IRS from Shutting FCMB Branches

The Kaduna Division of The Tax Appeal Tribunal has nullified the purported sum of N3,222,600,000.00 (Three Billion, Two Hundred and Twenty-Two Million, Six Hundred Thousand Naira) Stamp Duties and non-corporate entities assessment covering January 2013 to December 2020 issued on First City Monumental Bank by Kano State Internal Revenue Service for lacking merit.

The Panel led by Umar Adamu granted an order of an Interlocutory Injunction restraining the Kano State Internal Revenue Service from shutting down the branches and operations or in any wise disrupts the business activities of the FCMB within Kano State.

The Tribunal further declared that the Electronic Transfer Levy is not due and should not be remitted to any agency of government until such a time a Regulation has been made by the Minister of Finance.

From facts, the appellant- FCMB had submitted that the Kano State Internal Revenue Service demanded for records in respect of stamp duties deductions and remittances, for the period between 2013 -2020 and non-corporate entities allegedly due to the state government and responded that the Federal Inland Revenue Service is the appropriate authority to whom the tax is payable.

In response, the Kano Internal Revenue Service issued a Best of Judgement Assessment to the tune of N3.222,600,000.00 (Three Billion, Two Hundred and Twenty-Two Million Six Hundred Thousand Naira) only with an ultimatum of fourteen (14) days within which the assessed sum should be paid.

In disagreement, the Appellant objected to the assessment and dragged the respondent to the Tax Tribunal, sought for the declaration of the tribunal to set aside the judgment assessment among other reliefs.

In opposition, the Respondent- Kano State Internal Revenue Service filed a Notice of Preliminary Objection on the grounds that the Bank lacks the right to institute the Appeal, and the Tribunal is not competent and lacks the jurisdiction to hear and interpret the provisions of the Stamp Duties Act and to determine the Appeal as presently constituted.

The Respondent counsel B.Y Madobi Esq and Ahmad Sanusi Esq averred that the said FIRS Press Release on the collection of Stamp Duties is never an Act of the National Assembly and cannot therefore amend, alter or add to the provisions of the Stamp Duties Act 204 as amended.

In response, the Appellant- FCMB maintained that the tribunal is wired with requisite jurisdiction to hear the appeal and urged the tribunal to dismiss the objection in its entirety.

In its ruling, the tribunal unanimously affirmed jurisdiction and dismissed the objection for lacking merit.

Furthermore, when the matter came up for cross-examination on 8th August 2022, Learned Respondent Counsel informed the Tribunal that due to the pendency of a similar case at the Supreme Court on the same issue of Stamp Duties involving the Federal Government and the Thirty-Six (36) states of the Federation, he craved the indulgence of the Tribunal, and applied for an adjournment to allow him Address the Tribunal on the issue.

However, at the next adjourned date of 12th September 2022, Learned Respondent Counsel instead filed a Notice of Appeal dated 2nd September 2022 to the Federal High Court, Appealing against the Ruling of the Tribunal which was delivered on 4th April 2022, and submitted that he did not intend to file any defense in the substantive matter.

Learned Appellant Counsel, Prof Abiola Sanni SAN, A.A Aliyu Esq, D.B Kwajaffa Esq objected to the Respondent Counsel, maintained that the appeal to the Federal High Court which must be on point of law, must be made within thirty (30) days of the decision of the Tribunal, that the “purported Notice of Appeal dated 2nd September 2022 and filed on 5th September 2022 was incompetent and should therefore not detain the Tribunal from its duty.

Having heard the submissions of both Counsel, the Honourable Tribunal reserved its decision in the matter until 12th October 2022 and ordered that Parties should maintain the status quo until its final pronouncement on the matter.

In a well-considered judgment, the tribunal led by Hon. Barr. Umar Adamu as Chairman, Hon. Kabiru Dandago, Hon. Bayero Muhammad, Hon. Sameerah Gwandu, and Ahmed Kumshe as members while taking judicial notice of the case before the Supreme Court for resolution, ruled that the order of the tribunal dismissing the Respondent Notice of Preliminary Objection was delivered on 4th April 2022 and NOT “7th March 2022” as erroneously contained in the Respondent’s Notice of Appeal to the Federal High Court.

The Tribunal held that the Kano State Internal Revenue Service has not led any evidence in opposition to the testimony of the Appellant’s witness nor cross-examined the witness, and where a party fails or refuses to respond or react to issues raised or submissions made by his opponent in his process, he is deemed to have no answer and therefore, conceded such points to his opponent.