Ikeja Hotels Plc. V. Lagos State Board of Internal Revenue (2005)

LawGlobal-Hub Lead Judgment Report

SALAMI, J.C.A.

By a writ of summons sealed on the 27th January, 2001, the plaintiff’s claims were for the following:-

(a) N262,000,000.00 (two hundred and sixty two million Naira) being arrears of sales tax and penalty that was assessed on Sheraton Hotel and Towers, a hotel within the chains of Ikeja Hotels Plc. for the months of assessment January, 2001 – May, 2001.

(b) Interest on the said amount at the rate of 21% from 1st of June, 2001, until judgment and thereafter at the rate of 6% per annum until the whole amount is liquidated.”

The defendant responded to the claim by filing a notice of preliminary objection dated 17th April, 2003, challenging the jurisdiction of the trial court to hear and determine the suit on the following 14 grounds:-

(a) The plaintiff in this action is, and was al all times material, a statutory body established by section 3 of the Personal Income Tax Law Cap P4 of the laws of Lagos State of Nigeria.

(b) The composition of the said body is set out in subsection (2) of section 3 of the said law.

(c) The body mentioned in paragraph (a) hereof has been superseded by the Personal Income Tax Decree 104 of 1993, which set up the State Board of Internal Revenue for Lagos State pursuant to section 85A( 1) of this said Decree.

(d) The composition of the State Board mentioned in paragraph (c) above, is set out in sub-section (2) of the aforementioned section 85A of Decree 104 of 1993.

(e) The plaintiff is not the “relevant tax authority” under the Personal Income Tax Decree.

(f) In the premises, the body mentioned in paragraphs (a) and (b) hereof has no locus standi and it is not competent to institute this action.

(g) For the foregoing reasons, this court has no jurisdiction to entertain this action.

(h) By the provisions in the Constitution of the Federal Republic of Nigeria, 1999, the National Assembly is conferred with power to make laws with respect to matters in section 4(2) and (4) of the said Constitution.

(i) Under the Constitution, only the National Assembly has power to make laws with respect to the taxation of income, profits capital gains as well as trade and commerce.