Mobil Oil (Nig) Ltd. Vs Federal Board Of Inland Revenue (1977)

LawGlobal-Hub Lead Judgment Report

FATAYI-WILLIAMS, J.S.C.

Mobil Oil (Nigeria) Ltd., which will hereafter be referred to as the appellants, were assessed for and have paid tax and super tax for the year 1968/69 and 1969/70 inclusive. Later, by a letter dated 16th June, 1970, the Principal Inspector of Taxes decided to make additional assessment on the appellants by acting or purporting to act under Section 30A of the Companies Income Tax Act, 1961, and computing the tax payable by the appellants on 15% of what it described as “turnover as per accounts” submitted by Messrs. Peat, Marwick, Cassleton Elliot & Co., the auditors of the appellants. After further communications and correspondence between the parties, the assessment was reduced to 10% of “turnover as per accounts”.

The appellants were dissatisfied with these additional assessments and objected to them. Upon the Federal Board of Inland Revenue refusing to review the assessments, the appellants appealed to the Body of Appeal Commissioners. On 23rd March, 1973, the Body of Appeal Commissioners gave their decision in which they upheld the assessments complained of subject to the deductions of the amount of purchase taxes collected by the appellants on behalf of various State Governments from the figure adopted by the Federal Board of Inland Revenue in their computation of the additional assessments complained of.

Still dissatisfied with this decision, the appellants appealed to the High Court of Lagos State from where the record of proceedings was forwarded to the Federal Revenue Court which was the court which had jurisdiction to hear the appeal at the material time.

The appellants, after setting out in twenty paragraphs the facts on which they proposed to rely, added six grounds of appeal. This procedure is in accordance with Rule 5(2) of the Income Tax Appeals (Lagos) Rules (published as L.N.54 of 1957 in Volume 8 of the Laws of the Federation), which reads –

“5(2) The grounds of appeal shall set out concisely in separate paragraphs the relevant facts (but not the evidence by which they are to be proved) or any point of law, or both, upon which the appellant intends to rely in support of his appeal and the concluding paragraph shall, where the appeal is against an assessment, set out –

(a) the amount of the income shown on such assessment and upon which tax has been assessed, and also the amount of the tax as assessed and the identification number of the assessment, and

(b) the amount of the income upon which the appellant considers the tax should have been assessed, and the amount of the tax thereon payable, which the court is asked to find and adjudge as being the proper amounts:

provided that this paragraph shall be read where necessary, subject to the modifications set out in rule 20.”

It should be pointed out at this juncture that Rule 20 referred to above is not relevant to the consideration of the present case. It is further provided in Rule 8(1) as follows: –

“8(1) Before the expiration of the thirteenth day after the day on which the grounds of appeal were served upon him, the respondent shall deliver or cause to be delivered to the Registrar, for filing, a concise statement of the relevant facts (but not of the evidence by which they are to be proved) or any point of law, or both, upon which he intends to rely at the hearing of the appeal, and shall comply with the provisions of paragraphs (2) and (4) (a) of this rule.

(2) Such statements shall be signed by the respondent or by any of the persons authorised to sign on his behalf as provided by Rule 6 and shall hereafter be referred to as the ‘respondent’s answer’.

(4)(a) The respondent shall, when presenting his answer for filing, pay to the Registrar the fees for filing and service and supply the Registrar with a copy of the said answer for service on the appellant.

Pursuant to the provisions of the above rule, the Federal Board of Inland Revenue (as respondent) filed its “respondent’s answer” which reads: