Ecodrill Nigeria Limited V. Akwa Ibom Board Of Internal Revenue (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

CHIMA CENTUS NWEZE, J.C.A. (Delivering the Leading Judgment)

At the Revenue Court of Akwa Ibom State, the respondent in this appeal (as complainant) filed a criminal charge against the appellant herein (as corporate accused person). It was arraigned on a three count charge as follows:

Count I

That you on the 15th day of February, 2012 in Mbo Local Government Area being Pay as You Earn collecting agent, without sufficient cause, did fail to pay the sum of N45, 234,124.34, being Pay As You Earn Taxes/deductions/under payments and penalty for late payment/non remittance for the period 1999 to 2000 and thereby committed an offence punishable under section 81 of the Personal Income Tax Act Decree (sic) 104 of 1993.

Count II

That you on the 15th day of February, 2002 in Mbo Local Government Area, being a withholding tax collecting agent in accordance with the provision of Section 68, 69, 70, 71 and 72 of personal Income Tax Decree (sic) 104 of 1993, without sufficient cause, did fail to pay the sum of N400, 000. 00 being withholding taxes deducted by you for the period 1999 to 2000 and thereby committed an offence punishable under section 73 of the same Decree (sic).

Count III

That you on the 15th day of February, 2002 in Mbo Local Government Area, having been assessed to pay the Economic Development Levy Edict (sic) 1996, did fail to pay the said levy and thereby committed an offence punishable under section 6 of the said Edict (sic).

FACTUAL BACKGROUND

The appellant is the respondent’s Pay As You Earn (PAYE, for short) collecting agent of withholding taxes which it deducted from its employees resident and earning income from the respondent’s State, (Akwa Ibom State). The appellant, allegedly, failed to remit to the respondent the sum of N45, 234,124.34, being PAYE taxes/deductions/under payments and penalty for late payment/non remittance for the period of 1999 to 2000. It was arraigned before the said Revenue Court on February 18, 2002.

The learned trial Magistrate, sitting at the Revenue Court of Akwa Ibom State, (henceforth to be referred to as “the learned trial Magistrate”), at the close of evidence, struck out Counts two and three of the charge on the ground that it (the company) was not liable to remit Economic Development levy charges on its employees as that was not in the letter or spirit of Law No.1 1996 of Akwa Ibom State. The said court held the appellant liable only in respect of Count 1. Aggrieved by that decision, it appealed to the High Court of Akwa Ibom State.

The appellate High Court, on April 20, 2012, upheld the judgment of the learned trial Magistrate (sitting at the Revenue court); affirmed the appellant’s conviction and dismissed the appeal accordingly. Still dissatisfied, the appellant appealed against the judgment of the appellate High Court (hereinafter referred to the lower court) to this court. The two issues for determination were framed thus:

ISSUES FOR DETERMINATION

1. Whether the learned trial court was right in his (sic) application of the concept of deemed residency against the appellant so as to hold the appellant liable to pay PAYE tax to the Respondent (sic) this matter?
2. Whether the learned High Court Judge was right in his application of section 149 (d) of the Evidence Act in relation to the appellant’s local employees?

The respondent adopted the said issues. We shall, equally, adopt them in the determination of this appeal.