The Federal High Court in Abuja has refused to restrain the Federal Inland Revenue Service and the Economic and Financial Crimes Commission (EFCC) from arresting a Senior Advocate of Nigeria (SAN), Godwin Obla, over alleged failure to pay tax.
Justice Taiwo O. Taiwo refused Obla’s prayer for an order of injunction restraining the respondents “from harassing, intimidating or humiliating” him “by arresting and/or detaining him or by otherwise preferring a criminal charge against him”.
The Obla prayed the court to hold that they could not arrest him without undertaking a revision of his objection to a notice of tax assessment issued him by FIRS.
Justice Taiwo further refused Obla’s prayer for an order of declaration that the body with the power to recommend or initiate criminal prosecution of any person to the attorney general of the Federation (AGF), state or any other relevant law enforcement agency in respect of any tax assessment is the tax appeal tribunal.
The judge also refused the applicant’s prayer to restrain the respondents or their agents from investigating or extending any summons to him “in respect of anything to do with the notice of tax assessment dated 31st May 2018 issued by the first respondent until the final determination of the applicant’s objection”.
Justice Taiwo, however, granted Obla’s prayer for a declaration that the relevant tax authority with the power and mandate to assess or collect personal income tax from Abuja residents is the Federal Capital Territory Inland Revenue Service (FCT IRS).
The court also granted Obla’s prayer for an order declaring that the issuance of tax clearance certificates by the FCT IRS in favour of the applicant is conclusive proof of assessment and payment of income tax for the years covered by the certificates.
The court held that the respondents could not lawfully take any steps to initiate or undertake any criminal prosecution of Obla on the basis of the notice of tax assessment issued by the FIRS without undertaking a revision of the plaintiff’s objection to an assessment.
Obla, who owns the firm, Obla & Company, in a July 31, 2018, originating summons, prayed the court to determine whether, in view of relevant laws, the FIRS has the jurisdiction to assess and collect personal income tax from him, being an Abuja resident and whose business is within the FCT.
Obla argued that the proper agency to request tax assessment in this regard is the FCT Inland Revenue Service and not the respondents.
But, FIRS contended that the lawyer did not pay tax from 2010 to 2014, which was prior to the establishment of the FCT IRS, and that as such, it was the right agency to assess the plaintiff for the years.
The first defendant also pointed out that it is empowered by law to co-opt any government agency for purposes of tax recovery from defaulters.
EFCC told the court that it is a statutory body charged with the responsibility of investigating all reported cases of economic and financial crimes in Nigeria.
The commission said it can collaborate with other government bodies within and outside Nigeria to fight economic and financial crimes, of which tax evasion and tax fraud are part and parcel.
Justice Taiwo, after considering the relevant sections, upheld FIR and EFCC’s powers to investigate tax evasion, tax fraud, and other tax-related crimes.
He held: “I am of the view that I have covered all the salient issues raised as issues for determination even by the sole issue proffered by the court. I hereby grant prayer one in whole.
“I grant prayer two only to the extent that the issuance of a tax certificate by the Federal Capital Territory Inland Revenue Service is proof of assessment and payment of income tax for the years covered by the said certificates before the operation of the Federal Capital Territory Inland Revenue Service Act.
“I grant prayer three. Prayers four, five and six are refused. The parties before the court are advised to respect the provisions of the law and conform to the laws in this matter. This is my judgment.”