Judge cites bias, lack of fair hearing in ruling that resets long-running dispute between AEDC and FIRS
The Federal High Court in Abuja has overturned a Tax Appeal Tribunal (TAT) ruling that ordered Abuja Electricity Distribution Plc (AEDC) to pay the Federal Inland Revenue Service (FIRS) more than N5.3 billion in alleged Value Added Tax (VAT) and Withholding Tax (WHT) liabilities dating back to 2013.
Delivering judgment on Monday, Justice Umar Mohammed set aside the tribunal’s December 14, 2023 decision after finding evidence of “bias” and a breach of AEDC’s right to fair hearing. He subsequently directed that the matter be retried by a different panel.
Why the Judgment Was Reversed
In suit No. FHC/ABJ/TA/01/24, AEDC had asked the court to nullify the tribunal’s ruling and return the case for a fresh hearing. The company argued that enforcing the N5.3 billion tax bill would cripple its operations and threaten electricity supply to customers in Kogi, Nasarawa, Niger and the Federal Capital Territory.
More significantly, AEDC alleged that a member of the tribunal, Honourable Ajayi Julius Bamidele, was a former FIRS staff member who had taken decisions related to the company’s tax audit during his time at the agency. The company said this compromised the integrity of the tribunal’s verdict.
FIRS lawyers dismissed the claim, arguing that AEDC should have raised the objection earlier. But Justice Umar disagreed.
Judge Rules Bias Was Proven
Justice Umar held that AEDC’s deposition, supported by a sworn statement from KPMG partner Martin A. was never rebutted by FIRS. The evidence showed that Bamidele had supervised the FIRS tax audit team that reviewed AEDC’s records for the period under dispute.
Quoting directly from the KPMG affidavit, the judge read:
“I liaised with the tax audit team of the FIRS, which reported to Mr. Julius Bamidele Ajayi, who was at that time the coordinating director at the FIRS and responsible for tax audit.”
According to the court, this uncontested claim raised a valid issue of “likelihood of bias,” which strips any tribunal of jurisdiction. Justice Umar emphasized that under the principle of natural justice, no one is permitted to sit in judgment over a matter in which they have had prior involvement.
He added that once fair hearing is compromised, the entire decision becomes “null and void,” regardless of the quality of the tribunal’s reasoning.
Case Returned for Fresh Trial
The court therefore set aside the TAT’s ruling and remitted the case back to the tribunal for a complete retrial before a properly constituted panel.
Background to the Dispute
The matter dates back to a five-member TAT panel led by Hon. Iriogbe Alice in suit No. TAT/ABJ/APP/330/2022. Following a joint investigation by FIRS and the Economic and Financial Crimes Commission (EFCC) covering the 2013–2017 tax years, FIRS issued a tax assessment claiming billions in unpaid VAT and WHT.
AEDC contested the assessment, insisting that FIRS did not provide a lawful basis for the claimed liabilities. But the tribunal disagreed and ordered AEDC to pay:
- N4.53 billion in VAT for 2013–2017
- N780.3 million in WHT for 2013 and 2016
- N100,000 as costs to FIRS
With Monday’s judgment, the entire tribunal decision has now been vacated and the dispute will begin afresh.
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