D.S.A. Agric. Mach. MFG. CO. Ltd. V. Lagos State Internal Revenue Board (2006)

LawGlobal-Hub Lead Judgment Report

KUMAI BAYANG AKAAHS, J.C.A.

The Lagos Slate Internal Revenue Board took out an originating summons against D.S.A. Agric. Mach. Mfg. Co. Ltd seeking the following reliefs:-

“(A) A DECLARATION that by virtue of the provision of Section 50 and Section 56 of the Personal Income Tax Law Lagos State 1994 Cap 142 or/and Decree 104 of 1993 the Applicant is empowered to distrain the Respondent of his goods, chattels, hind or premises etc for non payment of tax; being under deductions or under remittance in respect of P.A.Y.E. and W.H.T. under the said Law or/and under Personal Income Tax Decree No. 104 of 1993.

(B) A DECLARATION that the amount of N2,579,684.31 (Two Million five hundred and seventy-nine thousand six hundred and eighty-four Naira thirty-one kobo) reflected in the demand note is unpaid and is due as Tax to the government of Lagos State from the Respondent.

(C) AN ORDER DISTRAINING the Respondent of its goods, chattels, Land or premises for non payment of N2,579,684.31 (Two Million five hundred and seventy-nine thousand six hundred and eighty-four Naira thirty-one kobo) being outstanding Tax payable by the Respondent to the Applicant under the pay as you earn (P.A.Y.E.) deductions and Withholding Tax for the years 1996 until the settlement of the Tax liability”

The application was supported with a 17 paragraph affidavit to which were annexed the Report on Statutory Tax Audit (1996) and Demand Notice on Liabilities for PAYE, Withholding Taxes Etc.

The Respondent deposed to a 7 paragaph Counter-Affidavit to which were annexed several exhibits.

The motion came on for bearing on 5/3/98 and after Mr. Pedro, learned counsel for the Applicant had moved the motion, Mr. Idongesit, learned counsel for the Respondent sought for an adjournment which was refused and he proceeded to reply to the motion.

Thereafter the learned trial Judge delivered his ruling wherein he made an order empowering the Applicant to distain the Respondent of their goods, chattels and other things as prayed for non payment of N2,579,684.31 being outstanding tax payable by the Respondent to the Applicant.

The Respondent appealed against the ruling in the Notice of Appeal dated and filed on 10/3/98. Subsequently on 19/5/98 the Respondent brought a motion for stay of the judgment and for an order setting aside the judgment entered in favour of the Applicant on 5/3/98. The application was dismissed on 16/10/98. The Respondent also appealed against the dismissal for stay of execution and setting aside the judgment. The Respondent will hereinafter be referred to as the Appellant while the Applicant in the Originating Summons becomes the Respondent to the Appeal.

When the appeal was called for hearing the Appellant though served was absent and unrepresented. Since the parties had filed their briefs the appeal was deemed argued on the briefs. See Order 6 Rule 9(5) Court of Appeal Rule 2002.

The Appellant filed an Amended Notice of Appeal containing two grounds of appeal and adumbrated two issues in the Appellant’s brief. The two Issues are:-

(i) Whether the Appellant herein was a competent party to protest the PAYE taxes assessed in respect of its employees.

(ii) Whether in the circumstances, the conditions precedent to the court below taking jurisdiction upon the matter had been satisfied.