Wilbros Nigeria Limited V. Attorney General of Akwa Ibom State & Anor. (2007)

LawGlobal-Hub Lead Judgment Report

VICTOR AIMEPOMO OMAGE, J.C.A.

 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respondents filed a memorandum of appearance, and the respondent filed an application for accelerated hearing which was withdrawn, the defendants/respondents filed their statement of defence; and hearing commenced on 23/1/04.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:-