By Romanus Okoye
A Calabar High Court Judge, Justice Elias O. Abua has declared as unconstitutional, null and void and of no effect Section 2 of the Cross River State Tourism Development Levy (amendment) Law, No. 5 of 2008. The judge ordered that the section be set aside as it purports to usurp the powers of the National Assembly conferred under Section 4 (1), (2), (3), (4) and (5) by both the exclusive and concurrent legislative list of the Federal Republic of Nigeria 1999 (as amended).
He also ordered the setting aside of Sections 2 and 4 (1) of the said law which impose obligations of levying, taxing and collecting of the said levies and taxes on the claimant as it amounts to double taxation. He held that the claimant was never an agent of the first defendant and as such, cannot be saddled with the responsibility of collecting taxes disguised as levies on its goods and services rendered customers at its outlets.
The suit No. HC/229/2019 was between UAC Nig PLC (trading under the name of UAC Restaurant, Mr. Biggs, Calabar) as claimant and Government of Cross-River State, Board of Internal Revenue, Attorney General and Commissioner for Justice, Attorney General of the Federation and the Federal Inland Revenue Service as first, second, third, fourth and fifth respondents, respectively. UAC of Nigeria PLC had, through its counsel, Chief Musa Tolani of Enyimba – Ikemba Chambers, Aba, approached the court to declare the said Section 2 of the Tourism Development Levy which imposes on the company the obligations of levying, taxing and collection of certain levies as prejudicial to its rights and interests and that of its teeming customers in Cross River State.
The council asked the court to decide whether his client, having subscribed to the obligations to collect and remit Value Added Tax and other levies imposed by the National Assembly, on behalf of the 4th and 5th defendants is liable to collect again on behalf of the 1st and 2nd respondents and remit same to them pursuant to the Tourism Development Levy Law, as it relates to products produced at its outlets in Cross River State. The judge ordered the first and third respondents to refund the sum of N1, 600, 000 paid by the claimant in protest to forestall distrainment of the claimant’s goods and chattels and the closure of claimant’s premises anywhere in Calabar in particular and Cross River State in general.
The court therefore issued a perpetual injunction restraining the first and third respondents, their agents, officers, servants or privies from harassing, intimidating the claimant or its officers and staffers in its restaurants and/or trespassing upon its properties and premises in any way or by distrainment, sealing or closing down its operations anywhere in Calabar and Cross River in general or by any means coercing the claimant to commence the collection and remittance of the said Tourism Development Levy from its customers anywhere within Cross River State.