Court Grants Adamama State Board Of Internal Revenue, Leave To Distrain Against Mautech For Non Remittance Of Personal Income Tax
It is no longer business as usually for tax defaulters in Yola, Adamawa State, as the tax authority, Adamawa State Board on Internal Revenue (ASBIR) has been able to give effect to the provisions of its establishment law which empowers it to distrain on the property, chattels and effects of any defaulting taxpayer who remains in default up until the expiration of the statutory notice duly served on such defaulter by the tax authority.
The High Court of Adamawa State on Thursday 17 January delivered a landmark ruling in Suit/Motion No.: ADSY/155M/2018 granting ASBIR leave to distrain against Modibbo Adama University of Technology (MAUTECH), formerly Federal University of Technology, Yola, for non-remittance of Personal Income Tax and Development Levies of the University’s Staff.
Hon. Justice Nathan Musa of High Court 1, Yola, directed the issuance of a Warrant of Distress and further ordered the Inspector-General of Police and the Commissioner of Police, Adamawa State to assist the tax authority and the officials of the Court in levying the execution of the said warrant, until the sum of N842,804,085.19 (Eight Hundred Forty-Two Million, Eight Hundred and Four Thousand, Eighty-Five Naira, Nineteen Kobo, is fully paid, being PAYE and Development Levy deductible from the salaries of MAUTECH’s employees for the tax period of 2011-2016.
The implication of the order of the Court is that MAUTECH stands the risks of having all its moveable assets impounded and possibly auctioned, while its immovable properties would be under lock and keys until the outstanding tax liabilities are fully liquidated.
According to counsel to ASBIR, Jude Daniel Odi, the procedure under which this order was obtained is sui generis and ex parte, as provided for under the provisions of Section 38, Adamawa State Board of Internal Revenue Law, 2007; Section 104, Personal Income Tax Act, Cap. P8, LFN 2004 and Section 29, Personal Income Tax (Amendment) Act, 2011. Quite a number of States including Lagos, Ogun and Edo States have set such special powers of tax authorities in motion. It is however novel to Adamawa State.
Meanwhile, in a sister matter, counsel to ASBIR, Jude Daniel Odi and Maryam Muhammad of Miyetti Law, had on 23 April, 2018 obtained a judgment of N1,499,537,892.61 (One Billion, Four Hundred and Ninety-Nine Million, Five Hundred and Thirty-Seven Thousand, Eight Hundred and Ninety-Two Naira, Sixty-One Kobo), being PAYE, Development Levy, interest, penalties and cost due to ASBIR from MAUTECH found to be in tax default for the period of 2008-2010. This sum however remained unpaid until the counsel took out garnishee proceedings.
Accordingly, the State High Court on Thursday again delivered a ruling in Motion No.: ADSY/108M/2018 granting an order of garnishee nisi against the Central Bank of Nigeria (CBN), MAUTECH Microfinance Bank Ltd, Zenith Bank Plc. and Stanbic-IBTC Bank Plc. inviting them to show cause why the funds of MAUTECH in their respective custodies should not be attached. A return date of 5 February 2019 was endorsed on the said order.
Indeed, it is a huge leap in legal development for Adamawa State and Northeast Nigeria, as it is only a matter of time before this sui generis procedure begin to gain prominence and serve as a catalyst for the IGR drive of the States comprised in that subregion. Interestingly, the constitutionality of the procedure has been upheld by the Court of Appeal in the decision of Independent Television/Radio v. ESBIR  12 NWLR (Pt. 1474) CA 442.