Judgment summary
This is an appeal against a ruling of the High Court, Commercial Division, Court 8, delivered on 5th April 2022, which struck out and dismissed the Appellant's tax appeal as incompetent for being filed out of time (1.0).
The Court of Appeal, in a judgment delivered by Koranteng, JA (with Sowah, JA and Archer, JA concurring), examined the relevant provisions of the Revenue Administration Act, 2016 (Act 915), particularly sections 37, 39, 41, 42, 43, 44 and 45, together with Order 54 rules 1 and 2 of the High Court (Civil Procedure) Rules, 2004 (C.I. 47).
The Court dismissed all grounds of appeal and held that the appeal was without merit, thereby affirming the High Court's decision to strike out the Appellant's notice of tax appeal.
Background
The Appellant was a subcontractor to Tullow Ghana Limited, providing a drilling unit and associated drilling services under a Petroleum Agreement dated 10th March 2006, to which Tullow Ghana Limited and its JV Partners, the Government of the Republic of Ghana and the Ghana National Petroleum Corporation were parties (2.1).
The Respondent is the head of the Ghana Revenue Authority, a statutory body established by the Ghana Revenue Authority Act, 2009 (Act 791) (2.2).
In 2019, the Respondent conducted a tax audit on the Appellant's business operations from January 2012 to December 2018 (2.3). By a letter dated 8th November 2019, the Respondent assessed the Appellant's tax liability at US$305,606,164.19 (the first assessment) (2.4).
The Appellant objected by a letter dated 11th December 2019 (2.5). As a condition precedent to hearing the appeal, the Appellant was required to pay an objection deposit of 30% of the assessed tax; its application for reduction resulted in a payment of US$12,500,000.00, representing 4.09% of the tax in dispute (2.6).
By a letter dated 8th July 2020, the Respondent reduced the Appellant's tax liability to US$10,222,849.35, considering the US$12,500,000.00 already paid (the Objection Decision) (2.7). The Appellant objected again on 28th July 2020 (2.8). By a letter dated 1st December 2020, served the same day, the Respondent further reduced the assessed liability to US$5,448,152.65, this figure excluding the objection deposit of US$12,500,000.00 (2.9).
Still dissatisfied, the Appellant lodged a further objection on 30th December 2020 (the third objection) (2.10). By a letter dated 24th March 2021, the Respondent disallowed the third objection, stating that the Commissioner-General had no power to further review the request and that the request was not supported by any law (2.11). The Respondent maintained this position in a further letter dated 8th October 2021 (2.9 [second numbering]).
On 8th November 2021 the Appellant filed a notice of appeal against the tax assessment at the Commercial Division of the High Court, Accra, and on 26th November 2021 filed an application for interlocutory injunction (2.10). The Respondent, on 23rd November 2021, filed an application to strike out and dismiss the notice of appeal, contending it was filed out of time and in contravention of section 44 of Act 915 and Order 54 rule 2(1) and (2) of C.I. 47 (2.11).
On 5th April 2022, the trial judge upheld the Respondent's objection and struck out the Appellant's appeal as incompetent (2.14). The Appellant, aggrieved, filed a Notice of Appeal to the Court of Appeal on 25th April 2022 (2.15).
Core dispute
The central issue was whether the High Court was right in striking out the Appellant's notice of tax appeal as being filed out of time, in contravention of section 44 of the Revenue Administration Act, 2016 (Act 915) and Order 54 Rule 2(1) of the High Court (Civil Procedure) Rules, 2004 (5.0).
The Appellant argued, across Grounds I to III, that the Respondent's letter dated 1st December 2020 was a tax decision (an amended tax decision under section 42(9) of Act 915) that could itself be objected to, and that the Respondent had power under sections 37(5)(b)(ii) and 39(3) of Act 915 to adjust its tax decisions.
Under Ground IV, the Appellant contended that its letter of 30th December 2020 was a valid objection to a tax decision, and that Act 915 does not limit a taxpayer to a single objection.
Under Ground V, the Appellant contended that the Respondent's letter of 8th October 2021 was itself an objection decision under section 43 of Act 915, notwithstanding that it disallowed the objection.
The Respondent maintained that only the first objection (11th December 2019) was a valid objection to a tax decision, that subsequent letters were objections to objection decisions (which do not qualify as tax decisions), and that the trial judge had correctly applied sections 41, 42 and 43 of Act 915.
Court findings
The Court held that appeals are by way of rehearing, with the Court of Appeal seized of jurisdiction over the whole proceedings as though instituted before it as a court of first instance, citing Mamudu Wangara v Gyato Wangara [1982-83] GLR 639, Koglex Ltd (No.2) v Field [2000] SCGLR 175, Tuakwa v Bosom [2001-2002] SCGLR 61 and Djin v Musah Baako [2007-2008] SCGLR 686, together with Rules 8(1) and 31 of the Court of Appeal Rules, 1997 (C.I. 19).
The Court noted that a right of appeal is a creature of statute and must be exercised within the four corners of the relevant statute and procedural rules, citing Sandema-Nab v Asangalisa and Others [1996-97] SCGLR 302, Nye v Nye (1967) GLR 76 CA, and Bosompem & Others v Tetteh Kwame {2011} 1 SCGLR 397.
On Grounds I, II and III, the Court held that after an objection decision under section 43 of Act 915 is made, a subsequent adjustment or amendment of that objection decision does not convert it into a fresh 'tax decision'. Section 41(1)(d) of Act 915 expressly excludes an objection decision under section 43 from constituting a tax decision. The reference in section 42(9) to a 'tax decision' meaning 'the tax decision objected to, as may have been amended by an objection decision' was found to refer back to the original tax decision as amended, not to create a new tax decision each time an objection decision is amended.
The Court found the Appellant's contrary interpretation unreasonable, noting that if every amended objection decision became a fresh tax decision, the Appellant would have been obliged under section 42(5) of Act 915 to pay 30% of the tax in dispute as a fresh objection deposit each time; there was no evidence that the Appellant paid such a deposit in respect of its letters of 28th July 2020 or 30th December 2020. The only objection deposit on record was paid on 13th December 2019 in respect of the first objection filed on 11th December 2019 (Exhibit PM5). Grounds I, II and III were dismissed as unmeritorious.
On Ground IV, the Court held that the Appellant's letter of 30th December 2020 was not an objection to a tax decision, since the only tax decision was the original one objected to on 11th December 2019, and the 1st December 2020 letter was an objection decision, not a fresh tax decision. The Court rejected the Appellant's argument based on legitimate expectation, holding that specific statutory provisions on tax dispute resolution cannot be sidestepped for an expectation not backed by law. Ground IV was dismissed.
On Ground V, having found that the 30th December 2020 letter did not constitute a valid objection, the Court held that the Respondent's letter of 8th October 2021 could not be considered an objection decision either. Both the 8th October 2021 and 24th March 2021 letters maintained the position outlined in the 1st December 2020 letter, which was the true objection decision. Ground V was dismissed.
The Court concluded that the objection decision was the Respondent's letter dated 1st December 2020, served on the Appellant the same day. Instead of filing an appeal within thirty days as required by section 44 of Act 915 and Order 54 Rules 1 and 2 of C.I. 47, the Appellant instead sought a review of that decision. The Learned Judge was therefore not in error in striking out the appeal as having been filed out of time.
Outcome
The Court of Appeal dismissed all grounds of appeal (Grounds I to V) as unmeritorious and held that the appeal was without merit.
The decision of the High Court striking out the Appellant's notice of tax appeal as incompetent, for having been filed out of time, was upheld.
The appeal was dismissed, with Koranteng, JA delivering the lead judgment, and Sowah, JA and Archer, JA both concurring.
Major issues / areas of contention
- Whether the High Court was right in striking out the Appellant's notice of tax appeal as being filed out of time, in contravention of section 44 of Act 915 and Order 54 rule 2(1) of C.I. 47.
- Whether the Respondent's letter dated 1st December 2020 was a 'tax decision' under Act 915 that could itself be objected to, or whether it was an objection decision under section 43.
- Whether an amended or adjusted objection decision converts into a fresh tax decision capable of being objected to under section 42(9) of Act 915.
- Whether the Appellant's letter of 30th December 2020 constituted a valid objection to a tax decision.
- Whether the Respondent's letter of 8th October 2021 constituted an objection decision under section 43 of Act 915.
- Whether the Commissioner-General's powers to adjust an assessment under sections 37(5)(b)(ii) and 39(3) of Act 915 permitted repeated objections by the taxpayer to each adjustment.
- Whether the Appellant could rely on legitimate expectation to argue that its subsequent letters constituted valid objections.