The Federal High Court in Abuja has ordered the Central Bank of Nigeria (CBN) to pay Kasmal International Services N579,130,698,440 with 10% interest per annum on the judgment sum for the period from January 1, 2015, to January 31, 2020, for its role in stamp duty collection.
The judgment was delivered on Friday, October 11, 2024, by Justice Inyang Ekwo, in a case instituted by Kasmal against the CBN and the Attorney General of the Federation.
Naijaonpoint previously reported that the CBN had filed a preliminary objection against a legal action instituted by Kasmal International Services, which sought a court order barring it from disbursing all accrued deposits paid into the CBN NIPOST stamp duty collection account by all commercial banks.
The applicant’s lawyer, Dr. Alex Izinyon SAN, submitted that his client was appointed by the Nigerian Postal Service (NIPOST) to represent NIPOST in the collection of N50 on all receipts given by any bank or financial institution in acknowledgement of services rendered concerning electronic transfers and teller deposits of N1,000 and above, in compliance with the Stamp Duties Act and the Nigeria Financial Regulations 2009.
He added that the terms of the agreement between NIPOST and the plaintiff included the remuneration of N7.50 from every N50 deduction.
In documents seen by Naijaonpoint, the senior lawyer stated that his client’s percentage has not been fully paid as agreed.
He argued that if disbursement is done to the exclusion of the plaintiff’s percentage, the plaintiff will be highly prejudiced and will suffer irreparable losses.
The court document states:
“The plaintiff has become aware through public disclosures by the Governor of the CBN that after the initial payment of N10.367 billion to the plaintiff, which did not reflect the total value of all accrued deposits that ought to have been paid into the 1st Defendant NIPOST Stamp Duty Collection Account No. 3000047517 from January 1, 2015, to January 31, 2020, further remittances were made from the DMBs’ NIPOST STAMP DUTIES ACCOUNTS to the 1st Defendant NIPOST Stamp Duty Collection Account No. 3000047517 in the tune of over N370.7 billion, which were amounts that accrued within the period from January 1, 2015, to January 31, 2020.
“Currently, a total of N3.8 trillion stands in the Stamp Duty Collection Account, ready for distribution among the Federal Government, State Governments, Local Governments, the Federal Inland Revenue Service (FIRS), Coordinating Consultants, and other bodies.
“That the plaintiff’s 15%, amounting to N579,130,698,440, is part of the N3.8 trillion in the Stamp Duty Collection Account.
“The defendants/respondents have started taking steps to disburse and transfer the whole of the N3.8 trillion in the Stamp Duty Collection Account without consideration of the outstanding payments due to the plaintiff.”
The applicant then partly prayed for the following orders against the CBN:
“An order directing the 1st and 2nd Defendants to pay the plaintiff the sum of N579,130,698,440 or any other sum as may be adjudged by this Court upon the production of the records relating to the collection of stamp duty between January 1, 2015, and January 31, 2020, representing 15% of all accrued deposits paid into or which ought to have been paid into the CBN NIPOST Stamp Duty Collection Account No. 3000047517 by all Deposit Money Banks (DMBs).
“An order directing the 1st (CBN) and 2nd Defendants to pay the plaintiff an interest payment of 10% per annum on the sum of N579,130,698,440 or any other sum as may be adjudged by this Court upon the production of the records relating to the collection of stamp duty between January 1, 2015, and January 31, 2020, representing 15% of all accrued deposits paid into or which ought to have been paid into the CBN NIPOST Stamp Duty Collection Account No. 3000047517 by all Deposit Money Banks (DMBs).”
The lawyer earlier asked the court to restrain the 1st and 2nd Defendants, either by themselves, agents, privies, assigns, or whatsoever called, from disbursing, distributing, transferring, depleting, or doing anything whatsoever with all accrued deposits paid into or which ought to have been paid into the CBN NIPOST Stamp Duty Collection Account by all Deposit Money Banks (DMBs) pending the hearing and determination of the case.
The lawyer earlier asked the court to restrain the 1st and 2nd Defendants, either by themselves, agents, privies, assigns, or whatsoever called, from disbursing, distributing, transferring, depleting, or doing anything whatsoever with all accrued deposits paid into or which ought to have been paid into the CBN NIPOST Stamp Duty Collection Account by all Deposit Money Banks (DMBs) pending the hearing and determination of the case.
In response, counsel for the CBN and the Attorney General of the Federation, Chief Adeniyi Akintola SAN, told the Federal High Court Abuja that the purported appointment of the plaintiff by NIPOST was void from the onset because stamp duty charges on bank transfers and deposits are a tax that is exclusively administered by the Federal Government through the Federal Inland Revenue Service (FIRS).
In their preliminary objection to the suit marked FHC/ABJ/CS/335/2024, Akintola told the court that the agency contract the plaintiff allegedly had with NIPOST is illegal, adding that only the Federal, State, and Local Governments are entitled to share the revenue in the Federation Account.
He contended that NIPOST is not the revenue collection agency for stamp duties and hence has no authority to appoint the plaintiff to represent it as a collection agent for the Federal Government.
Furthermore, he stated that NIPOST lacks the powers to appoint the plaintiff as a revenue-generating collector concerning stamp duty, thus rendering the legitimacy of the underlying contract faulty.
He referred the court to a subsisting judgment which did not bind the CBN to any contract deals between NIPOST and the plaintiff.
He also urged the court to dismiss the case, criticizing the plaintiff for not joining NIPOST as a defendant in the matter.
The lawyer urged the court to hold that it is the responsibility of the Accountant General of the Federation to disburse, distribute, allocate, or transfer all such accrued revenues in the Federation Account.
“The non-joinder of NIPOST, which purportedly appointed the plaintiff as a collection agent, robs the Honorable Court of the requisite jurisdiction to entertain the claims as presently constituted;
“The purported agency contract between NIPOST and the plaintiff, which is the basis for the plaintiff’s authority, is not placed before the court; hence the court cannot give effect to the said agency contract merely because it was mentioned in passing in paragraph 5(e) of the plaintiff’s affidavit in support of the originating summons.”
“The revenue being challenged belongs to the entire Federation, the collection and remittance of which goes to the Federation Account, and any amount standing to the credit of the Federation Account can only be distributed among the Federal, State, and Local Government Councils in each State. The court lacks jurisdiction to entertain this suit in relation to sharing the said money in the Federation Account.”
“The Stamp Duties Act makes no provision for the delegation of the collection of stamp duties by any other body other than NIPOST under the NIPOST Act, and subsequently, the said stamp duties relate only.”
The court subsequently fixed today for judgment.
On Friday, the judge said the submission of the CBN and AGF that NIPOST lacks the statutory power to collect stamp duties and that the agency agreement entered into with the plaintiff “does not hold water.”
The judge observed that a previous judgment concerning stamp duty that favoured the plaintiff is still subsisting and has not been overturned by a higher court.
Ekwo held that the submission of the CBN and the AGF that the reliefs sought by the plaintiff in this suit cannot be granted, as all revenues accruing to the Federation, including the stamp duties, the subject of this matter, are remitted into the Federation Account, which can only be distributed among the tiers of government as provided in the Constitution, is incorrect.
He observed that the CBN had paid the plaintiff the sum of N10.3 billion, representing 15% of remitted stamp duty by all Deposit Money Banks (DMBs) between January 1, 2015, and January 31, 2020, from the CBN NIPOST Stamp Duty Collection Account No. 3000047517.
“I find at the end that the CBN and AGF have not effectively controverted the case of the plaintiff, and the plaintiff, having made a credible case, ought to succeed on the merit, and I so hold,” he said.
“It is my opinion that this case is predicated on the fact that the 1st and 2nd Defendants have had transactions with the plaintiff before by paying the plaintiff the sum of N10.3 billion, being 15% of remitted stamp duty.”
The judge subsequently granted the reliefs of the plaintiff, ordering the CBN to pay over N579 billion with associated interest within the stipulated period.
Stamp duty is an indirect tax imposed on several financial transactions. In 2023, Naijaonpoint recalls that a former CBN governor, Godwin Emefiele, revealed that the total revenue collected as stamp duty on behalf of the Federal Government in six years, from 2016 to 2022, was N370.686 billion.
The applicant approached the court to determine its percentage from the agreed terms with relevant agencies, particularly NIPOST.