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Attorney-Geneneral, Ogun State v. Attorney-General, Federation

ATTORNEY-GENERAL OF OGUN STATE & ORS.

V

ATTORNEY-GENERAL OF THE FEDERATION

SUPREME COURT OF NIGERIA

MUHAMMADU LAWAL UWAIS, CJN ( Presided )

SALIHU MODIBBO ALFA BELGORE, JSC

UTHMAN MOHAMMED, JSC

SYLVESTER UMARU ONU, JSC ( Read the Lead Judgment )

ANTHONY IKECHUKWU IGUH, JSC

SAMSON ODEMWINGIE UWAIFO, JSC

AKINTOLA OLUFEMI, EJIWUNMI, JSC

SUIT NOS. SC.137/2001 SC.189/2001

SC.253/2001

SC.277/2001

SC.296/2001

FRIDAY, 13TH DECEMBER, 2002

CONSTITUTIONAL LAW - Constitution of Federal Republic of Nigeria, 1999 , section 162(10) -Definition of revenue thereunder

CONSTITUTIONAL LAW - Constitution of Federal Republic of Nigeria, 1999 , section 162(5), (6) and (8) - Inconsistency of section 3, 6(1),

(2)  and (3) of the Allocation of Revenue (Federation Account etc ) Act Cap. 16 Laws of Federal Republic of Nigeria as amended by

Decree No. 106 of 1976 therewith - Effect

CONSTITUTIONAL LAW - Privatization of government enterprises, stamp duty, capital gain tax etc - Revenue accruing to or derived by the Federal Government from any other source - Whether ought to be paid to Federation Account

CONSTITUTIONAL LAW - Tax or duty imposed in respect of any of the matter specified in item D of Part II of the 2nd Schedule of the Constitution - Net proceed therefrom - How shared by the government

GOVERNMENT - Federal government - Whether legal and constitutional for the federal government to maintain and keep any other account for the purposes of receiving revenue collected by the federation other than as prescribed by section 162(1) of the Constitution

GOVERNMENT - Local government - Amount standing to the credit of local government in the federation account - Whether the federal government is entitle to pay same directly to the local government Illegality and unconstitutionality of paying same directly to the local government

INTERPRETATION STATUTE - Specific provision of statutes - Overriding interest of over general provision

JUDGMENT AND ORDERS - Orders made in vacuo - Need for court to avoid

REVENUE - Definition of under section 162(10) of the 1999 Constitution

REVENUE - Revenue accruing from privatization of government enterprises, stamp duty, capital gain tax and other income accruing to or derived by the federal government from any other source Whether ought to be paid into the federation account

REVENUE - Tax or duty imposed in respect of any of the matter specified in item D of Part II of the 2nd Schedule of the Constitution - Net proceed therefrom - How shared by the government

STATUTE - Specific provision of - Overriding interest of over general provision

TAXATION - Tax or duty imposed in respect of any of the matter specified in item D of Part II of the 2nd Schedule of the Constitution - Net proceed therefrom - How shared by the government WORDS AND PHRASES - ‘Revenue’ - Meaning of

Issue:

Whether or not the provisions of section 162, in particular and other relevant provisions of the Constitution of the Federal Republic of Nigeria, 1999 have been breached in the circumstances as by the defendant and whether the plaintiffs are not entitled to the reliefs sought in the event of such breach or violation being established.

Facts:

The Attorney-General of Ogun, Oyo, Ondo and Osun States severally brought this action against the Attorney-General of the Federation. In view of the fact that their claims are identical and in some respect the same, the several actions were consolidated on the 24th day of September, 2001. After pleadings were delivered by the plaintiffs to these consolidated suits, each of them went ahead to file and exchange briefs and in some other affidavit evidence verifying their cases with the defendant. The actions were filed before this court gave judgment in the case of Attorney-General of the Federation vs. Attorney-General of Abia State & 35 Ors. (No. 2) the plaintiff herein inclusive (now reported in (2002) FWLR (Pt. 102) 1- 310) delivered on 5th day of April, 2002. At the time hearings opened on this case, it became apparent that most of the claims in this case were repetitions of the counter-claims set up by some of the defendants in the former case. As a result, the plaintiffs herein had in the course of hearing of this case abandoned some of their claims. Thereafter, as the claims of the plaintiffs were the same, what to be decided were three declarations in claims 5, 7 and 12 in Lagos State’s suit and three prayers for injunction stated in claim 15  and claims XII and XIV of Ogun State respectively to wit :

“5. A declaration that the Federal Government is mandatorily obliged by the combined effect of section 162(i)  and (iv) of the 1999 Constitution to pay into the Federal Account all the proceeds and income, save those exempted under section 162(i), accruing from the privatisation of government enterprise, from stamp duties, capital gains tax and other income accruing to or described by Federal Government from any other source.

7. A declaration that the defendant is not entitled within the proper meaning of section 162(5), (6) and (8) of the Constitution of the Federal Republic of Nigeria, 1999 to pay the amount standing to the credit of the Local Government Councils in the Federation Account directly to the Local Government Councils and that such payments by the defendant is illegal and unconstitutional.

12.       A declaration that sections 3 and 6(1), (2) and (3) of the

Allocation of Revenue (Federation Account) Act (Cap.

16)  Laws of the Federal Republic of Nigeria as amended by Decree No. 106 of 1992 are inconsistent with section 162(5), (6)  and (8) of the Constitution of the Federal Republic of Nigeria, 1999 and are invalid, unconstitutional, null and void and of no effect.

15. An order of injunction restraining all officers, servants and functionaries of the Government of the Federal Republic of Nigeria or any other public officer whomsoever and howsoever from keeping and/or maintaining or sustaining any other Account save the Federation Account for the purpose of receiving all revenue, as defined by section 162(10) of the Constitution, collected by the Government of the Federation.

(xii) An order of perpetual injunction restraining the defendant by itself, agents, officers or privies from repeating or further committing such or similar unconstitutional acts in violation of any of the provisions of section 162 of the Constitution.

(xiv) A further order compelling the defendant to pay to the plaintiff its legitimate and correct share of the Federation Account less all monies already paid to the plaintiff from the said account, within the period 29th May, 1999 till the date of judgment in this suit.”

The Supreme Court considered the following sections of the 1999

Constitution sections 162(1), 162(10), 163; Item D of Part II of the Second Schedule (paragraph 7 - 10) under the concurrent Legislative List, which provides as follows:

“162(1)

The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the

Federal Capital Territory, Abuja.”

“162 (10)

For the purposes of subsection (1) of this section, “revenue” means any income or return accruing to or derived by the Government of the Federation from any source and includes -

(a)           any receipt, however described, arising from the operation of any law;

(b)          any return, however described, arising from or in respect of any property held by the Government of the

Federation;

(c)           any return by way of interest on loans and dividends in respect of shares or interests held by the Government

of the Federation in any company or statutory body.’

“163

Where under an Act of the National Assembly, tax or duty is imposed in respect of any of the matters specified in item D of Part II of the Second Schedule to this Constitution, the net proceeds of such tax or duty shall be distributed among the States on the basis of derivation and accordingly -

(a)           where such tax or duty is collected by the Government of a State or other authority of the State, the net proceeds shall be treated as part of the Consolidated Revenue Fund of that State;

(b)          where such tax or duty is collected by the Government of the Federation or other authority of the Federation, there shall be paid to each State at such times as the National Assembly may prescribe a sum equal to the proportion of the net proceeds of such tax or duty that are derived from that State.” “Par. 7.

In the exercise of its powers to impose any tax or duty on -

(a)           capital gains, incomes or profits of persons other than companies; and

(b)          documents or transactions by way of stamp duties the National Assembly may, subject to such conditions as it may prescribe, provide that the collection of any such tax or duty or the administration of the law imposing it shall be carried out by the Government of a State or other authority of a State.”