By Abdulwahab ABDULAH
A Lagos High court sitting in Ikeja has dashed the Lagos State Governmentâ€™s hope of earning a whooping N210 million from the Nigerian Bottling Company (NBC) Plc, claimed to be sales tax arrears and its interest allegedly owed the government.
Justice Hakeem Osodi, in his judgement in the suit filed by the Lagos State Board of Internal Revenue against the NBC, held that the suit lacks merit and that the claim before the court is not â€œmaintainableâ€.
The LSBIR had gone to court claiming the sum of N210 million from the NBC (the bottler of Coca Cola products) for being sales tax arrears and interest at the rate of 21 percent between June 1, 2001 up till the time of delivering judgement.
Also joined as co-defendant in the suit was the Manufacturers Association of Nigeria of which NBC is a member.
In its statement of claim the LSBIR averred that NBC is obliged under the Sales Tax Law to collect sales tax from the consumers of its products, and to account for and remit same to the state government.
The claim filed through the Boardâ€™s Assistant Director, Mr. Fatai Abbas, therefore prayed the court to hold that the company is liable to pay the sum and the accrued interest thereto.
The Area Finance Manager of NBC, Mr. Idowu Akinwande in his defence to the suit claimed that prior to the imposition of N243,075,000 as sales tax and penalty by the government the claimant never requested the company to produce for examination its record books, receipt, and accounts in respect of sales of its products.
It added that based on the above, the estimated amount contained in the Notice of Assessment dated July 12, 2001 is â€œunconscionable, arbitrary and does not represent the company correct sales.â€
According to the NBC, Sales Tax and Valued Added Tax are the same and imposition of both taxes on the company amounts to double taxation.
Justice Hakeem Oshodi in his judgementÂ held that â€œAs a rule tax statutes are interpreted very strictly; there is no common law of taxation; hence no general principle of law can displace the true meaning and effects of a tax statute which has been validly passed. For tax liability to arise there must be a clear linkage between the charging provisions and the intended tax payer. This link must be direct, not inferential.â€™â€™
He said, in the final analysis, having found that the decision of the Court of Appeal â€˜â€™is binding on the Court and the claim being prosecuted is not maintainable; the Court finds no merit in this suit. Same is hereby dismissed.â€