EXPORT FINANCE COMPANY LTD V. GHANA REVENUE AUTHORITY & ANOR

Citation: Unreported Judgment of the Supreme Court (Civil Appeal No. J1/07/2021) dated 30th November 2022

Digital Citation: [2022] GHASC 96

Brief Facts:
The plaintiff, Export Finance Company Ltd, sought declarations against provisions in the Revenue Administration Act, 2016 (Act 915) and Order 54 rule 4 of the High Court (Civil Procedure) Rules, 2004 (C.I. 47). The challenge focused on the constitutionality of Section 42(5) of Act 915, which requires taxpayers disputing a tax assessment to pay all outstanding import duties or 30% of other taxes before their objection is heard, and Order 54 rule 4 of C.I.47 which mandates partial tax payment before appealing tax decisions to the High Court.

Grounds of Appeal
The plaintiff invoked the jurisdiction of the Supreme Court to determine the inconsistency of Section 45 (2) of Act 915 and Order 54 rule 4 of C.I 47 that violated the right to a fair hearing (Article 19(13)), imposed discriminatory conditions (Article 17), and restricted access to the courts (Article 33) of the 1992 Constitution.

Issues

  1. Whether or not Section 42(5) of Act 915, requiring partial tax payment before entertaining objections, is unconstitutional?
  2. Whether or not Order 54 rule 4 of C.I. 47, mandating tax payment before an appeal, is consistent with the constitutional rights to fair trial and access to the court?

Areas of Tax Law Considered

  1. Tax assessment
  2. Dispute resolution
  3. Appeals in relation to import duties and general taxation

Arguments

 Appellant (Taxpayer)

  1. Section 42(5) violates constitutional guarantees of access to courts and a fair hearing.
  2. Order 54 rule 4 imposes an unfair and burdensome condition on taxpayers.
  3. Discretion granted under Section 42(6) to waive or vary payment creates inequality.

Taxpayers should not have to “pay now, argue later” without alternatives to safeguard rights.

Respondent (Ghana Revenue Authority)

  1. Tax collection relies on “pay now, argue later” to prevent frivolous objections.
  2. Section 42(6) provides safeguards by allowing discretionary waivers, ensuring fairness.
  3. Tax laws aim to balance taxpayer rights with the public interest in efficient revenue mobilization.

Ruling

The Supreme Court dismissed the plaintiff’s claims, holding that both Section 42(5) of Act 915 and Order 54 rule 4 of C.I. 47 were constitutional.

Reasoning

  1. Section 42(5) does not violate constitutional rights because it is part of a comprehensive dispute resolution system, including judicial review and appeals.
  2. Order 54 rule 4 complements Section 42, ensuring taxes are not indefinitely delayed. However, the rule of court always yields to the statutory legislation. Thus, where an appellant to a tax assessment complies with section 42 of Act 915, that appellant will not be required to comply with order 54 (4) of C.I.47.
  3. Public policy justifies temporary restrictions on access to courts to prevent tax evasion and delay tactics.
  4. The “pay now, argue later” rule is a proportional limitation that balances individual rights and public interest.
  5. Comparative jurisprudence, including South Africa’s Metcash Trading Case and decisions from the Uganda’s Courts, are persuasive and relevant to the apex Courts decision.

Principles for Tax Practitioners
The right of appeal is guaranteed for a taxpayer but the tax prepayment conditions provided by the law and rules of court ensured the balance between taxpayer rights and public revenue needs. While access to justice is a fundamental right, it can be limited by reasonable and necessary public policy measures to ensure efficient tax collection. The ruling reinforces that procedural fairness and safeguards are embedded within Ghana’s tax dispute resolution framework

References

Constitutional:  

  • Articles 2, 17, 19(13), 23, 33, 130 of the1992 Constitution of Ghana:

Statutory references

  • Sections 42(5), 42(6) of the Revenue Administration Act, 2016 (Act 915)

Procedural Rules

  • Order 54 rule 4 High Court (Civil Procedure) Rules, 2004 (C.I. 47):

Case Law

  • Beiersdorf Gh. Ltd vrs The Commissioner General, Ghana Revenue Authority [H1/140/2019 (unreported) 5th December 2019]
  • Fan Milk Limited v Commissioner General, Ghana Revenue Authority [CM/TAX/0004/18 (unreported) 7th April 2022]
  • Fuelex (U) Ltd. V. Uganda Revenue Authority [Constitutional Petition No.3 of 2009]
  • Kwasi Afrifa v. Ghana Revenue Authority [2022] GHASC (unreported)
  • Metcash Trading Ltd v. Commissioner for SARS [2001] 1 BCLR 1
  • Tuffour v Attorney General GLR 637
  • Uganda Project Implementation and Management Centre v. Uganda Revenue Authority (SC Constitutional Appeal no. 2 of 2009)