Bishop Daniel Obinim v Ghana Revenue Authority and Fidelity Bank Limited (2020) — Case Summary
By: Michael Siaw Larbi
Tags: Law, Tax Law, Taxes, Ghana

A case on the tax objection process and the need to follow due process when objecting to a tax assessment.

Facts

The Applicant (“B”) is a Pastor of a Ghanaian church. The first Respondent, the Ghana Revenue Authority (“G”) served B with a notice of tax due in December 2018 requiring B to settle the amount of tax due. B contended that they had indeed settled their indebtedness to G in full and further claimed that officers of G orally confirmed B’s settlement of debts upon presentation of receipts to officers of G. The amount of tax assessed by G related to taxes on B’s 21 rental units for shops, as well as for VAT on a guest house allegedly owned by B (Abroso Guest House). B claimed that he had already paid all rent taxes due on the shop rental units and further claimed that he was not personally liable for VAT on the guest house, as the guest house was a separate legal entity that was not under his direct management and control. B further contended that in July of 2018, the Economic and Organised Crime Office (EOCO) had together with G already jointly audited the same 21 rental units and submitted a different tax assessment, which assessment B claimed to have paid in full with payment receipts as proof of payment. In June 2019 when B attempted to (unsuccessfully) access funds from his bank account held with the second Respondent, Fidelity Bank Limited (“F”), B was informed by F that G had served F with a garnishee order requiring F to pay an amount of GHS 769,095.87 to G in settlement of B’s tax liability. B then contacted G to seek clarification on what the garnishee order related to. G confirmed that the order related to taxes on the 21 rental units and VAT on the guest house. B then approached the Court since to the best of his knowledge, these issues had long been laid to rest, and he now felt that G’s conduct was “unfair, arbitrary and oppressive, calculated to attack his person and harass him”.

Issues

B sought a declaration by the Court that B had paid all taxes due, that B was not personally liable for VAT on the guest house, that the garnishee order be struck down, and that G be estopped from pursuing taxes on the rental units. B further requested for a perpetual injunction restraining G from demanding taxes on the rental units and guest house and a perpetual injunction on F from placing a lien on B’s accounts as a result of any future garnishee order relating to taxes on the rental units and the guest house. B further prayed the Court to levy punitive damages on G for unlawful issuance of a garnishee order, and that the Court recovers all of B’s costs including B’s solicitor’s professional fees.

Held

The Court in arriving at its ruling sought to determine whether a tax decision had been made by G, and if B had properly objected to the tax decision as required under Sections 41 to 44 of the Revenue Administration Act, 2016 (Act 915) (“RAA”). B by failing to fully exhaust the laid down tax objection procedures under Act 915 before approaching the Court rendered B’s suit “premature and incompetent”. The Court held that B had flouted some rules of court procedure (Order 20 of C.I. 47), but because G did not raise an objection to B’s non-compliance with Order 20, the Court went ahead to determine the case on its merits. It was held by the Court that contrary to B’s claim that G had not made a “tax decision”, G had indeed made a tax decision under Section 41 of Act 915 by serving B with the letter notifying B of his tax liability. The Court further held that B objected to G’s assessment by conduct (by sending B’s assistants to G’s office with payment receipts to contest the tax assessment). It was again held by the Court that B’s claims that officers of G orally agreed that B did not owe the taxes was not supported by any evidence. Regarding G’s issuance of a garnishee order to F in respect of B’s bank account, the Court ruled that G acted within the authority provided G under Section 60 of Act 915. B by disputing the assessment had indeed “objected” and B was supposed to follow the laid down procedures for objecting to a tax decision prior to approaching the Court (by way of an appeal under Section 44 of Act 915). The judge opined that “the law is clear that where an enactment has prescribed a special procedure by which something is to be done, it is that procedure alone that has to be followed”. Regarding B’s claim that G did not notify him of the garnishee notice prior to serving F with the notice, it was held by the Court that G was under no obligation to serve B with a notice prior to serving F with the notice. G was at liberty to notify B of the garnishee order “at the Commissioner-General’s convenience” by interpreting Section 60(2) of Act 915 which provided that this service of notice to B had to be done “as soon as practicable after” and not before serving F with the order. In conclusion, the Court ruled that B did not properly invoke the jurisdiction of the Court by failing to fully exhaust the “domestic remedies” under Act 915. B’s suit was therefore dismissed in its entirety and G’s application was granted as prayed.