MOVELLE COMPANY LTD VRS GHANA REVENUE AUTHORITY (On Appeal).

(ON APPEAL TO THE COURT OF APPEAL)

Citation: Judgment of the Court of Appeal referenced ….

Brief Facts:
Movelle Company Ltd (the Appellant) is a company engaged in the importation and trading of frozen meat products. The Appellant imported 1,750 metric tons, which was claimed to be about 58 forty-footer containers of frozen chicken and chicken parts, into Ghana between December 2013 and January 2014. As a matter of Government policy, such importations required import permits before importation and clearance of the products. The Appellant obtained an import license, but there was a delay in clearing goods at the port of Tema.
The Ghana Revenue Authority (the Respondent) auctioned twenty-one (21) forty-foot containers of frozen chicken on 17th April 2014, followed by another auction of twenty (20) containers on 20th June and 12th August 2014. The Appellant claimed that the forty-one (41) containers were unlawfully seized and auctioned, and the auction did not follow laid down procedures. The Appellant also claimed that the total value of the 41 containers was US$3,894,750.00.
The trial High Court found the seizure and sale of the goods unlawful but did not grant all of the reliefs sought by the Appellant. The trial judge accepted a statement of account filed by the Respondent after judgment, and the Appellant applied to set this aside. The Appellant then appealed the judgment of the trial court.

Grounds of Appeal

The trial judge erred in holding that the Appellant failed to prove that the seized and auctioned containers were valued at US$3,894,750.00.
The trial judge erred in accepting the statement of account filed by the Respondent after judgment was delivered.
The trial court did not have jurisdiction to accept a statement of account after it had delivered judgment on the substantive matter, as it was functus officio.

Issues

Whether or not the seizure and auction of the Appellant’s forty-one (41) footer containers of frozen chicken was unlawful?
Whether or not the Appellant proved the value of the forty-one (41) containers of frozen chicken?
Whether or not the Respondent failed to follow mandatory statutory and administrative customs procedures regarding the seizure and auction of goods?
Whether the Appellant had a property interest in the auctioned products and the proceeds of the auction?
Whether the trial judge erred in accepting the statement of account filed by the Respondent after judgment was delivered and was functus officio in dealing with the statement of account after judgment was given?
Whether or not the value of the containers was admitted by the Respondent in their pleadings.

Areas of Tax Law Considered

the legality of the seizure and auction of goods and the proper procedure to follow in accounting for the proceeds
Minor consideration on customs procedures, which are related to taxation on imported goods.

Arguments

Appellant

The seizure and auction of the forty-one (41) containers were unlawful as the Respondent failed to follow the correct procedures.
The Appellant has a proprietary interest in the auctioned goods and is entitled to the proceeds.
The trial judge was wrong to accept the statement of account filed by the Respondent after judgment was given.
The trial judge was functus officio and had no jurisdiction to deal with the statement of account after judgment.
The value of the seized containers was US$3,894,750.00 and this was admitted by the Respondent in their pleadings.
The Appellant had no obligation to prove the value of the seized goods.

Respondent (Ghana Revenue Authority)

The Respondent denied any liability for the refund of monies to the Appellant.
The Appellant failed to obtain the required permit to clear the goods, which was the Appellant’s responsibility.
The goods were perishable and did not need any notice before being auctioned.
The money realised from the sale was paid to the government, after covering costs.
The Respondent contended the statement of account was accurate.

Ruling
The appeal was substantially successful.

The Court of Appeal found that the trial High Court Judge erred in accepting the statement of account after delivering judgement because the trial judge was functus officio.
The court ruled that the trial court made a wrong finding that the appellant had not proved the value of the 41 containers, when the value had in fact been admitted in the Respondent’s pleadings.
The Court of Appeal ordered the Respondent to properly file a statement of account backed by necessary documentation including duties, expenses and obligations, within 21 days of the judgment.
The Court determined and subsequently ordered that the value of the containers seized amounting to US$3,894,750.00, less expenses, should be refunded to the Appellant.

Reasoning

The trial High Court Judge’s acceptance of the statement of account filed after judgment was delivered was contrary to law and thus made him functus officio. This meant that a Judge could no longer exercise his power to change or alter a decision once it is final.
The court noted that the trial judge should have dealt with the issues concerning the statement of account as part of the proceedings, rather than as an ancillary matter after judgment.
The Court found that the trial judge’s ruling that the appellant failed to prove the value of the 41 containers was wrong because the Respondent had admitted the value in its pleadings. The Court clarified that a party’s admission of fact in pleadings does not need to be proved by the other party. In this regard, the value of the containers was in fact proven through invoices which amounted to $3,914,750, which was a value higher than the amount claimed by the Appellant. The court underscored the need for a fair accounting for the proceeds of the sale.
The court highlighted that a statement of account must be backed by documentation, not just figures.
The Court held that the seizure and auction of the goods was lawful because the goods were perishable.

Principles for Tax Practitioners

When a policy requires compliance by a person, there should be careful adherence to the policy to avoid legal consequences.
The principle of functus officio prevents a judge from revisiting a decision after final judgment is delivered, especially to determine matters of substance.
A statement of account filed after final judgment cannot be admitted by the Court.
A party’s admission of fact in pleadings does not require additional proof from the other party and is generally accepted as evidence of that fact.
When goods are sold under legal authority, the proceeds must be properly accounted for, with expenses and other charges deducted, and the balance paid to the owner of the goods.
Statements of accounts should be backed by proper documentation and should be authentic.
A party is permitted to appeal against two decisions of a lower court in the same case.

References

Statutory

Sections 5, 8, 136, and 178(4) of the Evidence Act, 1975 (NRCD 323),
Rule 20(4) and Rule 31 of the Court of Appeal Rules, 1997 (C. I. 19)
sections 116, 117 and 118 of the Customs Excise and Preventive Service (Management) Act, PNDCL 330,

Caselaw

Adams Addy v Solomon Mintah Arkaah (unreported) Suit No: J4/19/2021.
Asante v Bogyabi (1966) GLR 232.
British Columbia (Director of Forfeiture) v Sanghera 2017 BCSC 1519.
Dam v J. K. Addo & Brothers (1962) 2 GLR 200.
Faroe Atlantic Ltd v Attorney-General Civil Appeal Number (unreported) J4/22/2004. (26^th January 2005)
In Re Asere Stool; Nikoi Olai v Amontia IV SCGLR 637.
Nana Ampofo Kyei Barfour v Justmoh Construction Ltd 2 SCGLR 288.
Opanin Nantwi Ababio v Pastor Nana Edusei (unreported).Civil Appeal Suit No: J4/19/2014.
Peter Egyin Mensah v Intercontinental Bank Ltd (unreported) Suit No: J4/13/2009.
Qiu v Minister of Citizenship & Immigration 2019 FC 389.
R. T. Briscoe v Amponsah (1969) CC 99.
Stanley Kotei Hammond v Agbleze (unreported). Civil Appeal suit no J4/13/2021
West African Enterprise Ltd v Western Hardwood Enterprise 1 GLR 155.