Examining the Appeal Procedure at the Tax Appeal Tribunal (TAT) (Part II)
Ikechukwu Onuoma Esq.
Taxation permeates all aspect of the Nigerian corporate space, and this has huge implications on all sectors. It is expected that with constant interactions with tax authorities, tax disputes are inevitable. Thus, the need for a seamless procedure to settle such dispute.
Tax appeal procedure in Nigeria encompasses steps taken by a party (or parties) dissatisfied with a tax assessment or any action of an authorized officer of a Tax Authority to challenge same starting from a written objection, through instituting an appeal at the TAT and further appeal to superior courts. An appeal can lie to the TAT once the preceding conditions have been met and the parties have locus standi to institute the appeal. As we would notice, TAT creates an administrative channel for those who want speedy resolution of tax dispute without resort to litigation proper.
This article examines the Jurisdiction of TAT and its conflict with the exclusive jurisdiction of the Federal High Court (FHC). It further guides you through the procedure for instituting an appeal at the TAT and obtaining the judgement and enforcing it.
In Part I of this article, we discussed the Pre-Appeal and Commencement stages of instituting an appeal at TAT. This concluding part will examine Proceedings, Judgement, and Further Appeal and Enforcement mechanisms.
Applications during TAT proceedings can be made orally or in writing stating reasons for seeking relief at any stage of the proceedings and TAT can order it to be in writing when it deems it necessary. Appeals can be amended at any time as the tribunal deems fit. Appeals can also be consolidated when the subject matters of both appeals are the same on an application in Form TAT 4 by the parties or by TAT suo motu in which case it delivers a consolidated judgment. Withdrawal of an appeal bars further re-filing of the same appeal.
Just like the traditional court system, the procedure involves the appellant presenting its case and the supporting documents and witness testimony subject to cross-examination and re-examination, then the respondent responds accordingly. The onus of proving the excessiveness of the tax is on the appellant. The basis of admitting evidence is its ‘Relevance’ as against the traditional rules of evidence providing distinctly for ‘relevance and admissibility’. A witness who fails to appear can be summoned. TAT is not restricted to the grounds raised in the notice of appeal but can consider other matters relevant to the appeal in so far as it does not affect the issues raised. A salient provision in the rules is that the conduct of proceedings must be in the best interest of justice with an emphasis on substance over form.
Furthermore, if the RTA proves failure to deliver a statement of return, that the appeal is an abuse of court process, or that it is expedient to pay the required sum as security, TAT may order the deposit of a sum pending and adjourn the appeal; such sum may be subject to a review. The sum is usually whichever is higher between the equivalent of tax charged in the preceding year of assessment or half of the tax assessment contested. There is an additional ten (10) per cent on the above sum. Failure to pay the sum amounts to a confirmation of the assessment appealed against and bars any other appeal on such assessment.
After receiving evidence, written addresses shall be filed by both parties, and each shall be given fifteen (15) minutes to make oral arguments and clarify their written addresses.
Judgement, Enforcement and Further Appeal
The decision of the tribunal is reached by the majority and the chairman has the power to break the tie (if any). Reasons for the judgement are mandatory unless it is a consent judgement. The judgement and its enforcement must be in line with judicial precedents and the provisions of the parent legislation (FIRS Act). Clerical irregularities do not void TAT decisions but can lead to an order to correct such irregularity.
Any party that is dissatisfied with the decision of TAT can further appeal to the Federal High Court (FHC) on point of law, within 30 days of delivery of judgement, with a notice in writing to the Secretary of the tribunal. If no appeal is filed within 30 days, the tribunal is required to register its decision with the FHC after which it crystallizes into a decision of the FHC and is enforceable as such.
Chargeable tax is payable within one (1) month of notice to the defaulter. Appeals to TAT are not caught up in the statute of limitation and the parties bear their costs. TAT proceedings are also public, and the time computation generally exempts certain days like public holidays.
- Periodic Review of Tax Appeal Laws: There has been no substantial amendments to the tax appeal procedures at TAT to reflect some developments like virtual hearings, in the light of the recent pandemic, and improve ease of doing business. These amendments should also reflect the rationale of decided cases, prevent double taxation, and expand the tax net. Notably, the Finance Acts of 2019 & 2020 have amended the extant federal tax legislations to reflect the changes above. It is hoped that the review will be constant and reflect the areas suggested above. The HMoF can also make subsidiary legislation.
- Periodic Training of TAT Officials: The chairman, commissioners, secretary, and other staff of TAT should engage in periodic training to bring them to speed with global tax practices and improve their capacity to adjudicate and dispense justice effectively.
- Provision for Dissenting Judgements: Undoubtedly, it is in the best interest of justice to espouse not only the reasoning behind the majority decision but also the rationale for dissenting judgements. This way, the tribunal can understand previous decisions and apply them properly.
- Ample Time for Oral Arguments: Each party is allowed fifteen (15) minutes to proffer oral arguments and clarify their appeals subject to an extension as the tribunal deems necessary. The guiding interest here is justice with emphasis on substance over form. The time can be inadequate and there are scenarios where it can wrongly deem a party’s argument to be unnecessary. In the case of Bernard Okeobor v Police Council, the court emphasized that the absence of an oral address can tilt the outcome. Thus, the time should be extended to a more ample time to cover all reasonable oral arguments and not just left at the discretion of any commissioner. Even though the argument should be contained in the appeal, the party should be allowed all the needed time to advance its case and such extension of time should not merely be discretionary. This will enable the judge to arrive at a proper and just decision.
- Review Mechanism: Decisions of TAT are not immune from defect in reasoning. It is also clear that this appeal procedure saves the parties a lot of time. Thus, there should be a detailed procedure for the tribunal to review its decisions especially in cases concerning dissent from judicial precedents, omission of cogent reasoning in the appeal of the parties or wrongful application of the law. This will save a lot of time and cost associated with further appealing to the FHC and higher courts.
- Allowing Further Appeals outside Points of Law: The tribunal is not excluded from human defect. As such, the tax commissioners can fall into the error of not attaching proper weight to evidence or not giving ample time for oral arguments which may tilt the scale of justice. Sadly, these incidences are excluded from grounds of appeal as they are not points of law. It is suggested that the grounds of appeal should be adjusted in the best interest of justice to include grounds not limited to law as permitted by the FHC.
- Electronic Repository of Judgements: Considering technological advancement, the decisions of TAT should be electronically accessible. This would allow for adequate research and access to the decisions of the tribunal.
From the foregoing, TAT has jurisdiction in disputes arising from federal tax laws and such is a precondition to further appeal to the FHC. Tax appeal procedure at TAT is well-defined and has received a lot of commendation for its succinctness and its coverage of key areas. This streamlined application suits the interest of substantive justice over form, which is the guiding interest of the rules.
Furthermore, the recommendations proffered should be adopted to bring it in line with international best practice. These will, no doubt, reduce the rigors faced by taxpayers in obtaining justice and increase investor confidence in the tax administration system.
Ikechukwu Onuoma is an astute lawyer with over 15 years of cognate experience in litigation, mediation. He is also the managing partner at Obra Legal, Enugu.