‘Minister’s approval of TAT rule at variance with enabling Act’
Some lawyers have declared that the approval given to the Tax Appeal Tribunal (TAT) (Procedure) Rules, 2021 by the Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, on June 10 was at variance with its enabling Act.
The minister had, pursuant to her powers under Section 61 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended), approved the rules.
But lawyers, reacting to the development, stressed that such rules cannot take the place of law, insisting that unless the Act is amended, the order stands contradictory.
The rule, which replaces the law, enables the tribunal to deal justly, fairly and expeditiously with appeals and promotes settlement of disputes among parties.
However, some of the changes in the rule include the requirement for taxpayers to pay 50 per cent of any disputed amount into a designated account of the TAT as security for prosecuting an appeal, prior to commencement of appeals, among other modifications.
Head, Tax Practice at Aelex Legal, Theo Emuwa, criticised the development, explaining that the marginal note on Order 3 Rule 6 of the law refers to undisputed sum.
According to him, the 50 per cent requirement can only be paid where the assessment is not in dispute and the payment is not automatic as the Federal Inland Revenue Services (FIRS) must convince the court on why such should be granted.
His words: “So it looks as if the provision is meant to apply for an undisputed amount. That is the amount that you agree that you owe. Even in the drafting of the order, it looks like there is a mistake. Marginal note is talking about the undisputed sum, while the order is not talking about the undisputed sum. So, there is a conflict.
“The Act says that the FIRS must convince the court to make an order that a taxpayer should pay 50 per cent. So, it is not automatic. Now, they have made use of the order to expand that provision, which is not legal. They must amend the Act to accommodate the directive from the minister.
“It would be like when they wanted to increase the VAT rate and the minister said they have hereby increased it without amending the Act.”
You can’t use the minister’s power to amend an Act because it contradicts the law. This order has been made pursuant to the Act.”
Also, Partner at Infusion Lawyers with expertise in Commercial Dispute Resolution and Technology Law Practice, Stephen Azubuike told The Guardian that the rule is not a substantive statute even though it was made pursuant to an extant law.
“Any unjust rule or law that particularly offends the Constitution in any way can be struck down by the courts. No argument is needed to conclude that the said Order 3, Rule 6 has injustice labeled all around it and only the courts can intervene in this circumstance,” he stated.