*Says It’s Unconstitutional for FIRS to Hold a Lawyer Liable for Their Client’s Tax.
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The Federal High Court in Lagos has declared as unconstitutional and invalid, a letter by the Federal Inland Revenue Service (FIRS) stating that lawyer J.B Daudu SAN is jointly liable with MTN Nigeria to pay outstanding taxes of Naira 1.4 trillion.
In the judgment delivered on September 23, Justice Lewis Allagoa set aside FIRS’ letter dated May 10, 2022 alleging Dauda’s joint liability with MTN for taxes arising from import duties, value added tax and withholding tax.
The court held that tagging Dauda as jointly liable with MTN due to his legal services to the company violates sections 36 and 6 of the 1999 constitution on fair hearing and right to counsel.
Justice Allagoa ruled that FIRS acted ultra vires its powers by imposing personal liability on Dauda without affording him fair hearing or joining him as a party in MTN’s tax dispute.
The judge reiterated that a lawyer’s legal services to a client cannot make the lawyer jointly liable for the client’s tax obligations.
With the judgment, the FIRS letter seeking to recover N1.4 trillion jointly from MTN and its counsel Dauda SAN has been nullified and set aside.
The court’s decision is a victory for legal practitioners whose services for clients are now shielded from arbitrary liability claims by government agencies like FIRS.
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