Court Orders Sale of Properties of Tax Dodgers to Defray N35.9m Tax Debts
The Federal High Court, Abuja has ordered of sale two landed properties belonging to two tax evaders: Zaibadari Company Limited and Tradecraft Nigeria Limited to defray N35.9 million tax debts.
The court granted the sale order following prayers by the Federal Inland Revenue Service, FIRS to allow it sell the landed properties of the two firms to defray the tax liabilities which amounted to N18. 8 million against Zaibadari and N17.1 million against Tradecraft.
FIRS approached the high court sitting in Abuja for an order to sell the companies properties after the two firms failed to honour series of demand notices issued to pay their outstanding tax liabilities.
In moving the Courts to grant the order, Counsel to the FIRS, Bar. Collins Ugwunebo told the court that Zaibadari was indebted to the FIRS to the tune of N18. 8 million, while Tradecraft owed the Service N17.1 million in 2015.
FIRS issued and served demand notices on the two firms and gave them 30 days within which to pay arrears of taxes to the FIRS. Both firms failed to pay within 30 days the arrears of taxes within 30 days.
FIRS relied on Section 33(2) of the Federal Inland Revenue Service, Establishment Act, 2007 and served Warrants of Distraint on the Respondents giving them 14 days to pay the tax due or risk the sale of their properties to settle the tax debt.
Despite the Warrants of Distraint served on the two companies, both failed to pay the tax arrears, This led to the two suits against Tradecraft and Zaibadari.
On !7th October 2018, FIRS complied with the order of the court that it should run adverts in the Leadership newspaper to serve Zaibadari through substituted means.
Cornelius Ugwunebo in an affidavit told the court that Zaibadari ‘s assessment was based on 20 per cent of N62,675, 200 million which was the “deemed profit of the respondent (Zaibadari) landed property located at Plot 551 Wuye B03, FCT Abuja, valued at N313, 3376,000 million”.
On March 23rd 2019, Justice A. I . Chikere the suit noted that “FHC/ABJ/CS/438/2018 noted that” despite the service of process on the respondent’s company, it refused, neglected and failed to state its side of the case nor have counsel appear on its behalf to state its case.
“It is trite law that an averment in an affidavit which is not challenged or controverted is deemed admitted as true. See DIGAL Vs NACHANG (2005) All NWLR (pt240) pg 41 at 46. Also in the case of ATAMAH & ANOR Vs EBOSELE & ORS (2018) LPELR 3825 where the court held that ín the nature, a party who has or has every opportunity to present its case before the court and who fails to do so cannot be heard too complain.
“The court is bound to believe the affidavit in support of application to the effect that the respondent is a tax evader and in default of its tax obligation to the applicant.
“Accordingly, an order for the ale of landed property the respondent located at Plot 551, Wuye B03 FCT is hereby made to satisfy her arrears of tax N18,802, 560.00 (eighteen million eight hundred and two thousand five hundred and sixty naira only.
Justice Chikere also ordered the sale of the property at Plot 1151 Wuye B03 FCT, Abuja to satisfy the arrears of tax of N17, 150, 496:00 (Seventeen Million, One Hundred and Fifty Thousand, Four Hundred and Ninety-Six Naira) only and after the deduction of the expenses from the sale of the property, refund the amount in excess to the defendant or anybody authorised by her upon request by the defendants’ company’’.
The application for the sale of the properties was brought under S.33(2) which gave the Federal Inland Revenue Service the power to apply to Court to obtain an Order prior to selling a distrained property.
Executive Chairman of the FIRS hailed the Nigerian judiciary for supporting the fight against tax evasion and expressed the hope that this judgement would deter other tax evaders.
Director, Legal Services Department of the FIRS, Ike Odume noted that this was the first time in the history of the FIRS that a court order would be used to sell the properties of tax evaders in Nigeria. Odume urged Nigerians to support the efforts of government in raising revenue to build infrastructure to stimulate the economy and ensure better life for all.