24th February, 2022
By Akin Kuponiyi
The Federal Inland Revenue Service, FIRS, has filed an application before a Federal High Court in Lagos urging the court to strike out an Appeal filed before it by UAC Nigeria Plc against the judgement of the Tax Appeal tribunal ordering it to pay the sum of N2,452,398,121.
FIRS is filing the application through its counsel, Usman Shehu.
In the alternative, it said the court should mandate UAC Plc to deposit the sum of N2,452,398,121.00 being the judgement sum in an interest yielding account maintained by the Chief Registrar of the court, as pre-condition to the hearing of the Appeal.
In an affidavit deposed to by a legal practitioner Peace Ogie, she averred that by notice of Appeal dated 17th August, 2018, UAC Plc appealed to the Tax Appeal Tribunal, Lagos Zone, against the decision of FIRS as contained in the FIRS’s Notice of Refusal to Amend NORA dated 19th July, 2018 and the FIRS revised Notice of Assessment dated 26th July, 2018 in respect of CIT, Tertiary Education Tax, VAT and COT obligations of the company for the period of 2013 to 2016 financial years.
In the Notice of refusal to amend and the revised Notices of assessment, FIRS had established the outstanding tax obligation of UAC Plc for the period of 2013 to 2016 to be the sum of N2,452,398,121.
In a considered judgement delivered on the 8th of November, 2019, the Tax Appeal Tribunal affirmed the validity of the Tax assessments appealed against, and accordingly dismissed UAC’s appeal.
Being dissatisfied with the judgement of the Tax Appeal Tribunal, UAC Plc appealed to the Federal High Court, in Lagos.
However, UAC Plc failed to pay the judgment sum to FIRS within 30 days of the judgement as mandated by paragraph 16(3) of 5th Schedule pursuant to section 59(1) of the Federal Inland Revenue Service Act. 2007.
UAC Plc has equally failed to deposit the said judgement sum in an interest yielding account maintained by the Chief Registrar of the court, as required by the order 5 Rule1(a) and(b) of the Federal high court Tax Appeal Rules
FIRS said UAC Plc is pursuing the instant Appeal without first complying with the requirements of the law and the rule of the court.
FIRS is contending that UAC’s appeal is incompetent and deserved to be struck out by the court, or in the alternative the court could mandate the company to comply with the rules of the court before proceeding further with the appeal.
However, in a counter affidavit sworn to by a lawyer Ifeoluwa Akinmade in opposing the FIRS application, the acting secretary of UAC Plc, Ijeoma Uzuana said the company is not in a position to deposit N2,452,398,121.00 as a pre-condition to exercise its constitutional right of appeal.
It is a huge sums of money to raise at a short notice, bearing in mind that UAC is a largely investment holding company that is dependent upon dividends received from its subsidiaries for its own cash flow.
Dividends are only paid as and when the subsidiaries have distributable profit.
Consequently, in the interest of justice, the company is urging the court not to grant the application.
Meanwhile, the case has been adjourned till 7th April, 2022 for hearing.