In Re: Chief M. A. Okupe V. Federal Board Of Inland Revenue (1974)

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COKER, JSC.

This appeal involves an application by one Chief Matthew Adekoya Okupe for the prerogative orders of Certiorari and Prohibition against the respondents, i.e., the Federal Board of Inland Revenue and the Chief Investigating Officer of the Board. In the High Court, Lagos, the applicant, now appellant, had moved the court for an order:-  

“(1) For leave to apply for an Order of Certiorari to remove into this Honourable Court for the purpose of being quashed the decisions made by or on behalf of the Federal Board of Inland Revenue and communicated to the applicant by letter dated 8th July, 1970, whereby it was ordered that the applicant should pay additional assessments in respect of personal income tax for the years of assessments 1960/61, 1961/62, 1962/63, 1963/64, 1964/65, 1965/66, 1966/67 and 1967/68.

(2) An Order of Prohibition prohibiting the Federal Board of Inland Revenue from proceedings or further proceedings with any steps to enforce payment of the said additional assessments or (in the alternative) such of them as this Honourable Court finds to be illegal. And that all necessary and consequential directions be given. (3) Directing that further proceedings on the assessments aforesaid to be stayed pending the final determination of this matter or until further order: and (4) Such further or other orders as this Honourable Court may deem fit to make.”

A statement pursuant to the relevant Rule of Court was duly attached to the application and the said statement shows the grounds upon which the application was based as follows:- “1. The additional assessments complained of were made without jurisdiction because:- (a) at the time of such assessments the Federal Board of Inland Revenue has no powers in law to make the assessments complained of; and (b) in the alternative to (a) the assessments aforesaid were not made on the basis of or as a result of any discovery of opinion such as the provisions of Section 31 of the Personal Income Tax (Lagos) Act, 1961 required.

2. The additional assessments aforesaid are illegal and null and void because they were not made by the Federal Board of Inland Revenue itself as required by law but were made by or on behalf of the Chief Investigating Officer of the Board.   3. The additional assessments aforesaid are illegal and null and void because, contrary to law, the notices of assessments and the notices of refusal to amend the assessments aforesaid were served simultaneously on the applicant.

4. In the alternative to 1, 2 and 3 a period of six years having expired since the 1960/61, 1961/62, 1962/63, 1963/64 and 1964/65 years assessment the additional assessments in respect of those years have been made in excess of the jurisdiction conferred by Section 31 of the Federal Income Tax (Lagos) Act.” The appellant also swore to an affidavit to accompany his application and paragraphs 2, 5, 6 and 7, which are directly relevant to the present decision, are as follows:-  “2. That I have already duly paid tax for which I was assessed for the 1960/61, 1961/62, 1962/63, 1963/64, 1964/65, 1965/66, 1966/67 and 1967/68 years of assessment.  XXX XXX XXX XXX XXX XXX 5.

That finally, a letter dated 8th July, 1970, was addressed to me by the 2nd respondent and a true copy thereof is attached and marked Exhibit B. 6. That the documents said to be enclosed in Exhibit B are attached herewith and marked Exhibits 1 to 27. 7. That to the best of my knowledge information and belief all actions and decisions on this matter were taken either by or on behalf of the 2nd respondent who is a servant or agent of the first respondent.” As indicated in paragraph 6 of the affidavit of the appellant, there were attached to the application eight copies of notices of assessment of income tax and nineteen copies of notices of refusal.

All the notices of assessment of tax and notices of refusal were dated the same day, that is the 20th June, 1970, and were all apparently approved by the same functionary who signed as such on the same day, i.e., the 20th June, 1970. Pursuant to leave granted by the High Court for issuing the orders, the respondents prepared to show cause and an investigating officer of the Federal Board of Inland Revenue, by name Isaac Olajide Oni, and a certified accountant, swore to an affidavit in which he recounted the series of events that had happened including the wilful and negligent failure of the appellant to disclose vital information to the respondents resulting “in the applicant being assessed at a less amount than that which ought to have been charged”, the meeting or meetings held by the parties to resolve the dispute and the general investigation of the affairs of the appellant. Paragraphs 13, 14, 15 and 16 of the affidavit of Mr. Oni read as follows:-  

“13. On or about 8th July, 1970, I sent a letter containing Notices of Additional Assessments for 1960/61, 1961/62, 1962/63, 1963/64, 1964/65, 1965/66, 1966/67 and 1967/68 to the applicant and on or about that date, I sent an endorsement of the letter to his agents. (i.e. his Accountants). 14. Those actions and decisions taken on this matter by me were duly authorised. 15. All actions taken in respect of this matter are in substance and effect in conformity with the relevant laws. 16. The right of the Board to make additional assessments has accrued for the periods in respect of which the additional assessments were made.”

At the hearing before the High Court, (Adedipe, J.), the parties on both sides were represented by learned counsel and in particular the respondents were represented by the learned Solicitor-General of the Federation. Learned counsel for the appellant (then applicant) addressed legal arguments to the court in support of the grounds of his application and submitted, firstly, that since the Personal Income Tax (Lagos) Act, No. 23 of 1961 was, after the year 1968, amended by Edict No. 7 of 1968, which came into effect on the 1st April, 1968, to apply to Lagos State, the Personal Income Tax (Lagos) Act enures only as a law at the instance of the Lagos State Government and the Board of Inland Revenue constituted by Section 2 of that Edict.

Learned counsel for the appellant argued further that it must be shown that the powers of the Federal Board of Inland Revenue are properly delegated to whoever purported to act for that Board and that as that was not shown to have been done in this case, either in writing or by notice in the Gazette, the second respondent was not legally exercising such powers.

Thirdly and lastly, learned counsel for the appellant submitted that as the notices of assessment and notices of refusal of objection to the assessments were prepared, approved and sent to the appellant at the same time, there was clearly a breach of the rights of the appellant as postulated by Sections 31 and 34 of the Personal Income Tax (Lagos) Act, 1961, under which the respondents had acted since the obvious implication is that any objection which the appellant may have had to the assessment had been rejected in advance.

The learned Solicitor-General countered these arguments and submitted that by the Personal Income Tax (Lagos) (Amendment) Edict, 1968, No. 7 of 1968, the Lagos State only took over personal income tax of individuals in the State as from the 1st April, 1968 and that the Edict does not in any way inhibit the powers of the Federal Board of Inland Revenue to assess and collect taxes from individuals within the State in respect of the period during which the Edict No. 7 of 1968 had not applied. With respect to delegation of powers to the Chief Investigating Officer of the Board, the learned Solicitor-General submitted that it was duly done. On the third leg of his argument, the learned Solicitor-General submitted that the service of the notices of refusal on the appellant on the same day and at the same time as the notices of assessment was only a mistake which was covered by Section 35 of the Personal Income Tax (Lagos) Act, 1961, and that in any case the proceedings were not a matter for the prerogative order of Certiorari and Prohibition.

In a reserved judgment, the learned trial Judge preferred and accepted the submissions on behalf of the respondents and dismissed the application. He found for the respondents on all points raised on the application and with respect to the issue of jurisdiction of the Federal Board of Inland Revenue to assess individuals within Lagos State after the making of Edict No. 7 of 1968, the learned trial Judge commented as follows:-

“The Personal Income Tax Act, 1961, has not been repealed and it is still applicable to Lagos. If the Federal Board of Inland Revenue was the only competent authority that could assess what tax should be paid by any individual resident in Lagos between 1960 and 1968, in my opinion, it is equally competent to assess in respect of additional tax for the same period, and it has jurisdiction to do so. Such taxes I am told are paid into the revenue of the Federal Government and not the

Other Citation: (1974) LCN/1795(SC)