Court Voids Section 1(2) Of Taxes And Levies Act For Being Inconsistent With The Constitution

The Lagos Division of the Federal High Court has set aside the provisions of section 1(2) of the Taxes and Levies (Approved List for collection) Act Cap T2 Laws of the Federation of Nigeria 2004 which gives the Minister of Finance the power to amend the Schedule to the Act on the basis of being inconsistent with the provisions of the Constitution of the Federal Republic of Nigeria, 1999.

The matter was instituted by the Registered Trustees of the Hotel Owners and Managers Association, Lagos Chapter for itself and on behalf of all its members against the Attorney-General of the Federation and Minister of Finance as 1st and 2nd Defendants respectively.

They approached the court via Originating Summons for the determination of the following questions:

“1. Whether by virtue of section 4 of the constitution of the Federal Republic of Nigeria, 1999 the legislative powers of the Federal Republic of Nigeria are vested in the National Assembly

2. If question (1) is answered in the affirmative, whether the Minister of Finance, a member of the executive arm of government has constitutional power (legislative competence) to amend an Act of the National Assembly or any part thereof

3. If question (2) is answered in the negative, whether section 1(2) of the Taxes and Levies (Approved List for collection) Act Cap T2 Laws of the Federation of Nigeria 2004 which vests the Minister of Finance with the power to amend the schedule to the Taxes and Levies (Approved List for collection) Act is inconsistent with the provisions of the constitution of the Federal Republic of Nigeria therefore, unconstitutional, null and void in light of section 1(3) of the constitution

4. If question 3 is answered in the affirmative, whether any purported amendment of the Taxes and Levies (Approved List for collection) Act Cap T2 Laws of the Federation of Nigeria 2004 by the Minister of Finance, a member of the Executive arm of government, including but not limited to the schedule to the Taxes and Levies (Approved List for collection) Act (Amendment) Order, 2015 is unconstitutional, null and void in light of section 1(3) of the constitution”

The following reliefs were therefore sought:

“(i). A DECLARATION that by virtue of section 4 of the constitution of the Federal Republic of Nigeria, 1999 the legislative powers of the Federal Republic of Nigeria are vested in the National Assembly

(ii). A DECLARATION that the Minister of Finance, being a member of the executive arm of government lacks constitutional power (legislative competence) to amend an Act of the National Assembly or any part thereof

(iii). A DECLARATION that section 1(2) of the Taxes and Levies (Approved List for collection) Act Cap T2 Laws of the Federation of Nigeria 2004 which vests the Minister of Finance with the power to amend the schedule to the Taxes and Levies (Approved List for collection) Act is inconsistent with the provisions of the constitution of the Federal Republic of Nigeria therefore, unconstitutional, null and void in light of section 1(3) of the constitution

(iv). A DECLARATION that any purported amendment of the Taxes and Levies (Approved List for collection) Act Cap T2 Laws of the Federation of Nigeria 2004 by the Minister of Finance, a member of the Executive arm of government, including but not limited to the schedule to the Taxes and Levies (Approved List for collection) Act (Amendment) Order, 2015 is unconstitutional, null and void in light of section 1(3) of the constitution”

B. Salihu, Esq on behalf of the Plaintiff argued that by virtue of section 4 of the Constitution, law making power is vested in the National Assembly

He argued that the Minister in exercise of his power pursuant to section 1(2) of the Tax and Levies Act amended the schedule to the Act and enacted the Schedule to the Taxes and Levies (Approved List for collection) Act (Amendment) Order, 2015 and published same in the Federal Republic of Nigeria official gazette number 77, volume 102 of 9 June, 2015 (the amendment Order)

Counsel argued strenuously that the said power granted to the minister is a usurpation of legislative functions considering the fact that the Minister is a member of the executive arm of government.

Counsel continued that amendment or repeal of the provisions of an Act is a duty of the National Assembly that cannot be delegated to any other arm of government, not even to a Committee of the National Assembly, he relied on the case of Attorney-General of Bendel State V. Attorney-General of the Federation & Ors (1981) All NLR 85

The Defendants on the other hand argued that the provisions of section 1(2) of the Levies and Taxes Act is not inconsistent with the provisions of the constitution because the said section and section 4 of the constitution must be read in conjunction with section 315(2) and (4) of the constitution. They argued that by the provisions of the latter, Minister can validly modify the provisions of an existing law.

The right of the Plaintiff to bring the action was challenged on the basis that the Plaintiff did not establish breach of its civil rights and obligations

The 2nd Defendant added that by section 5(1)(b), the National Assembly can delegate its power to the Minister for the The purpose of executing and maintaining the laws made by the National Assembly. He drew an analogy with the Rules of Courts which are made pursuant to the provisions of the constitution and insisted that the National Assembly can delegate its powers to the Executive for the execution and maintenance of laws made by the National Assembly.

RESOLUTION OF THE COURT.
The court commenced with the locus standi and resolved it in favor of the Plaintiff. It held that the amendment affects the business of the Plaintiff and its members particularly as it relates to payment of taxes, therefore, entitling them to seek for the setting aside of the law.

After considering arguments of the parties, Hon. Justice A. O. Faji agreed with the Plaintiff that schedule to an Act is part of the legislation; it has the same force of law as the Act itself and neither the Act nor the schedule can override the other.

“it also seems to me that any exercise of power that affects the terms and wordings of the enactment cannot be delegated legislation but an amendment to the legislation

Delegated legislation therefore to my mind, is an exercise of powers given by the legislature to another body to give effect to the enabling legislations and not as it were, to override or to amend it. The amendment Order seeks to add to the text of the main legislation and therefore affect it. It seeks to change the main legislation and make new rules outside those already laid down in the main legislation. That to my mind is not delegated legislation but an amendment to the ‘enabling’ legislation.”

The court also held that section 315 of the constitution is not applicable in the circumstances of the case because the Minister did not exercise the power under it but rather under section 1(2) of Tax and Levies Act. Secondly, the Minister is not the president of the Federal Republic of Nigeria neither is he a governor of any of the states. Thirdly, he is not “any person appointed by any law to revise or rewrite the Laws of the Federation or of state.”

All issues were therefore resolved in favour of the Plaintiff. “the amendment to the Schedule to the Act made by the 2nd Defendant vide the amendment Order is null, void and unconstitutional in the light of section 1(3) of the constitution.” the Court held