The Federal High Court, Abuja, on Monday overturned a December 2023 judgment by the Tax Appeal Tribunal that had directed Abuja Electricity Distribution Plc (AEDC) to pay the Federal Inland Revenue Service (FIRS) N5.31 billion in Value Added Tax (VAT) and Withholding Tax (WHT) liabilities dating back to 2013.
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Justice Umar Mohammed set aside the tribunal’s verdict, citing “bias” by a tribunal member and a lack of fair hearing, and ordered a retrial of the matter.
AEDC, in suit No: FHC/ABJ/TA/01/24, had challenged the tribunal’s ruling, arguing that enforcing payment would “jeopardize the supply of electricity to millions of consumers in Kogi, Nasarawa, Niger states and the Federal Capital Territory, Abuja.” The company also contended that Honourable Ajayi Julius Bamidele, a tribunal member who delivered the original judgment, had previously worked for FIRS and oversaw the tax audit that formed the basis of the dispute.
The FIRS opposed the argument, claiming AEDC failed to raise the issue at the tribunal.
Delivering judgment, Justice Umar noted that AEDC’s evidence, corroborated by KPMG Advisory Services, was unchallenged and raised serious concerns about the tribunal’s jurisdiction. Quoting KPMG, the judge said:
“In the discharge of my responsibilities, I liaised with the tax audit team of the FIRS, which reported to Mr. Julius Bamidele Ajayi, who was at that time the coordinating director at the FIRS and responsible for tax audit, which conducted the tax management exercise.”
Justice Umar held that the presence of a former FIRS staff on the tribunal raised the likelihood of bias, which violated natural justice principles. He stressed that a taint of bias undermines the integrity of judicial proceedings and nullifies prior decisions.
“Once the issue of natural justice is violated, it does not matter if the proper thing has been done; the decision and proceedings are null and void,” the judge said, adding that the appropriate remedy was to set aside the tribunal’s judgment and order a retrial.
The court consequently found merit in AEDC’s appeal, set aside the tribunal’s verdict, and remitted the case back to the Tax Appeal Tribunal for retrial.
The dispute originated from a 2018 FIRS and Economic and Financial Crimes Commission (EFCC) investigation into AEDC’s alleged 2013–2017 tax liabilities, which the company contested, asserting that the claims lacked lawful basis.
The tribunal had previously ordered AEDC to pay N4.53 billion for VAT, N780.3 million for WHT, and N100,000 in costs. Monday’s ruling reversed the entire judgment, reopening the matter for fresh proceedings.
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