The legal proceedings between the Abuja Electricity Distribution Company (AEDC) and the Federal Inland Revenue Service (FIRS) have hit a standstill following AEDC’s non-compliance with a Federal High Court order in Abuja.
The court order, issued amidst the backdrop of a December 14, 2023, judgment by the Tax Appeal Tribunal, directs AEDC to settle N5,314,665,952 in Value Added Tax (VAT) and Withholding Tax (WHT) liabilities dating back to 2013.
The motion was scheduled to be heard and moved today.
- AEDC in suit no: FHC/ABJ/TA/01/24 had approached the court seeking “an order staying the execution and or enforcement, by whatever means (including garnishee proceedings), of the judgment of the Tax Appeal Tribunal, Abuja Zone (“Tribunal”) delivered on 14 December 2023 in Abuja Electricity Distribution Plc v Federal Inland Revenue Service (Appeal No: TAT/ABJ/APP/330/2022) (“Judgment”‘) pending the hearing and determination of the appeal filed against the Judgment by the Applicant (“Appeal”).”
- The electricity billing company had argued that compelling the applicant to pay the money will “jeopardize the supply of electricity to millions of consumers in Kogi State, Nasarawa State, Niger State and the Federal Capital Territory, Abuja.”
What transpired in court?
At the resumed sitting on Tuesday, the AEDC lawyer, Josephine Titi told Justice Inyang Ekwo that she has four pending applications and was ready to move the one dated March 8, 2024.
But the judge said the motion was not before him. The lawyer insisted that her motion was in the court’s file but later opted to give the court her copy of the motion, but the judge refused the oral application.
Ekwo said he had ordered “parties to conduct a search on their file in court and ensure that the process they will be moving on the next date is in their file” but the AEDC lawyer did not comply with it order.
- “That was my order, but it appears you did not do that.
- “I refuse your application, you should do what the court said you should do,” Ekwo said and shifted the matter to April 13, 2024, for motion.
Backstory
AEDC had approached the court after a five-man Tax Appeal Commissioners led by its presiding judge, Hon. Iriogbe Alice, entered a judgment against the electricity billing company in suit No: TAT/ABJ/APP/330/2022.
The AEDC’s legal team argued that sometime in 2018, the FIRS, in conjunction with the Economic and Financial Crimes Commission (EFCC) conducted a tax investigation on the company for the 2013-2017 years of assessment period (YOA), and claimed it was owing in billions.
The AEDC disagreed with the findings of the tax collection agency, adding the FIRS did not provide any lawful basis for such liability.
However, the FIRS legal team objected to the appellant’s claims that its assessment was invalid.
The Tribunal subsequently declared its judgment against AEDC.
It declared,
- “This Honourable Tribunal therefore, compels the Appellant to pay N4,534,358,874.00 (Four Billion, Five Hundred and Thirty -Four Million, Three Hundred and fifty -eight thousand, eight hundred and seventy-four naira) only as VAT liability for 2013 – 2017 as contained in the Notice of Refusal to Amend (NORA) to the Respondent forthwith.
- “This Honourable Tribunal compels the Appellant to pay the sum N780,307,078.00 (Seven Hundred and eighty million, Three Hundred and Seventy-Eight Naira) only as WHT liability for 2013 and 2016 as established by its consultant KPMG.
- ” This Honourable Tribunal compels the Appellant to pay the sum of N100,000 (One Hundred thousand naira Only) pending cost awarded in favour of the Respondent in the course of the proceeding, “
