The recent Finance Act 2023 (FA3)1 ushered in numerous fiscal changes in Nigeria. Just like previous Finance Acts, the FA3 amended several legislations.2 In particular, sections 18 and 19 of the FA3 amended the provisions of sections 51, 52 and 53 of the Petroleum Profit Tax Act (PPTA) (as amended)), and amongst other things prescribed administrative penalties for the violation of the provisions of the PPTA or the offences contained in the PPTA. This article examines the propriety of those administrative penalties from the purview Constitutional provisions and concludes that they do not have constitutional basis. This is because they do not only encroach on the judicial powers of courts, they constitute a legislative infringement on the fundamental human rights to fair hearing. The article is divided into four parts. This introduction which is the first part is immediately followed by the second part which highlights the judicial powers of the Court and the fundamental right to fair hearing. The third part analyses the provisions of sections 18 and 19 of the FA3 as well as their resultant implications on the judicial powers of Courts and the fundamental right to fair hearing. The last part is the conclusion.

Judicial Powers of the Court and the Fundamental Right to Fair Hearing:

The Constitution of the Federal Republic of Nigeria 1999 (as amended) (Constitution) is supreme. This amongst other things, entails that the Constitution prevails over any other laws in Nigeria and if any law is inconsistent with the provisions of the Constitution, that law shall, to the extent of the inconsistency, be void.3

Also, in line with the universal democratic principles, the Constitution recognized the doctrine of separation of powers4 and made provisions for the peoples' fundamental rights.5 Specifically, section 6 (1) of the Constitution vests the judicial powers of the federation in the Courts established under the Constitution while section 6 (6) declares the extent of the said judicial powers vested in the Court.6 Furthermore, section 36 of the Constitution amongst other things, guarantees the fundamental rights of persons to fair hearing, and provisions for the procedures, rules and principles that must be followed before a person can be convicted and punished for any crime.

Summarily, section 6 of the Constitution established the Courts and guarantees the locus standi of individuals to approach the courts to determine any question relating to their civil rights and obligation, while section 36 of the Constitution goes a step further by ensuring that such Court or tribunal to be empanelled for that purpose must hear all the parties within a reasonable time, and must be independent and impartial,7 in addition to observing other relevant safeguards and procedures stipulated in the section.

Courts have rightly held the above provisions as sacrosanct. Accordingly, it was affirmed that the Court would not allow the provisions of enactment to be read in such a way as to deny access to Court by a citizen pursuant to sections 6(6) and 36(1) of the Constitution.8 In Ikpeazu vOgah & Ors,9 the Court emphatically declared that; "every citizen is entitled to ventilate their grievances and the Courts are obliged by section 6(6) of the 1999 Constitution to give the opportunity to each litigant so to do. This right cannot be taken away under any guise by any person or authority."

It follows that before a person or entity can be found guilty of any crime and thereby liable to punishment, the person or entity must have been given fair hearing or trial in accordance with the prescriptions of the Constitution. In MFA v. Inongha10, the Supreme Court held as follows:

"Fair hearing within the meaning of section 36(1) of the Constitution of the Federal Republic of Nigeria, 1999 means a trial or hearing conducted according to all legal rules formulated to ensure that justice is done to the parties. It requires the observance of the twin pillars of the rules of natural justice, namely: audi alteram partem and nemo judex in causa sua" Nemo judex in causa sua simply means that no Judge should preside over a matter in which he has personal interest or involvement."

The judicial powers of the courts and fundamental right to fair hearing are, therefore, constitutionally entrenched and cannot be taken away by implication or speculation any authority whatsoever – except by the Constitution itself.11 What then are the effects of sections 18 and 19 of the FA3 on those constitutional provisions?

Impacts of sections 18 and 19 of the Finance Act 2023 on the Judicial Powers of the Court and the Fundamental Right to Fair Hearing:

In a deliberate attempt to drive compliance with the provisions of the PPTA,12 sections 18 and 19 of the FA3 amended the provisions of sections 51, 52 and 53 of the PPTA which are the punishment sections of the PPTA by increasing the prescribed punishment for any act or omission in contravention of the provisions the PPTA. Thus, with the amendment, section 51 (1) & (3) PPTA now stipulates that;

"(1) A person who fails to comply with the provisions of this Act or any Regulations made under this Act for which no other penalty is specifically provided, shall be liable to an administrative penalty of N10,000,000, and where the default continues beyond a period stipulated by this Act or Regulations, the person shall be liable to a further administrative penalty of N2,000,000 for each day the default continues or such other sum as may, by order, be prescribed by the Minister of Finance.


(3) A person who –(a) fails to comply with the requirements of a notice served on him under this Act; (b) fails to comply with the provisions of section 30 of this Act; (C) without sufficient cause fails to attend or answer to a notice or Summons served on him under this Act or having attended fails to answer any question lawfully put to him; or (d) fails to submit any return required to be submitted under sections 30 or 33 of this Act, shall be liable to administrative penalty prescribed under subsection (1) of this section or upon conviction, be liable to penalty prescribed under subsection (2) of this section..."

Similar administrative penalty provisions can be found in sections 52 (1) and 53 (1) (b) i to iii of PPTA (as amended). Thus, the new provisions grant the relevant regulatory agency13 the powers to impose administrative penalty upon the commission of the offences proscribed in the Act14.

It is not in doubt that sections 51, 52, 53 of PPTA (as amended)constitute penal provisions. By way of definition, a penal provision is a statutory provision that prohibits an act or omission and makes the doing of the act or the making of the omission punishable.15 Similarly, section 2 of the Criminal Code Act clearly defines offences as; "acts or omissions which render the person doing the act or making the omission liable to punishment under this code."16

Also, the provisions of sections 51, 52, and 53 of PPTA (as amended) satisfy the twin requirements under section 36 (12) of the Constitution to the effect that a person shall not be convicted of an offence unless that offence is defined, and the penalty thereof prescribed in a written law.17

However, the question that readily comes to mind is; whether the relevant agency can, pursuant to any of the provisions of sections 51, 52, and 53 of PPTA (as amended)impose administrative penalties without satisfying the constitutional and legal requirements for conviction and sentencing of persons that contravened the provisions? The answer is no.

Courts' decisions abound to the effect that judicial powers are exclusively vested in courts and sentence in terms of fines, penalties, imprisonment, etc., can only be imposed upon a conviction after the defendant has been given a fair hearing. In other words, the trial must be manifestly seen to have been conducted in accordance with all legal rules formulated to ensure that justice is done to the parties.18 In NOSDRA v. Exxonmobil19 the Appellant wrote a sanction notification letter asking the Respondent to pay a cumulative statutory fine of N10,000,000.00 (Ten Million Naira) as penalty for the persistent breaches of the provisions of the NOSDRA Act, 2006 and its regulation.20 The Appellant followed up with a letter of demand, and an action to enforce the payment of the fine against the Respondent. Upon a challenge by the Respondent, the Trial Court struck out the action. The appeal also failed. The Court of Appeal, affirmed the decision of the Trial Court and amongst other things declared as follows:

"... By the imposition of the fine, the Appellant acted in a judicial capacity which they are not imbued with under the Constitution. By so doing, the Appellant became a Judge in its own cause, the Complainant as well as the Judge, contrary to the maxim "nemo judex in causa sua". The Courts will not allow any authority to act ultra vires its powers under the Constitution. To this end, Sections 1 and 6 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) empowers the Courts to declare any Act of the National Assembly inconsistent with the provisions of the Constitution, null and void...Penalties or fines are imposed as punishment for an offence or violation of the law. The power as well as competence to come to that finding belong to the Courts and the Appellant is not clothed with the power to properly exercise that function in view of the law creating the Appellant (NOSDRA). There is therefore a Lacuna in that law creating the Appellant."

Also, in Ahmed & Ors v. Odutola21, the Court of Appeal did not hesitate to affirm the decision of the Trial Court and declare invalid the administrative imposition of fines by the Appellants. The Court of Appeal also affirmed the supremacy of the constitution and declared that sections 12 (2)(b), 3, 5(a), 85 (b), 13 (3), 14 (1), 85 (2) of the Lagos State Traffic Management Agency Law which seem to confer judicial powers on LASTMA, is in contradiction with the 1999 Constitution on the powers of the judiciary.

The forgoing decisions are in line with the constitutionally recognized doctrine of separation of powers, with the accompanying mechanisms for checks and balances amongst the organs of the government. The doctrine of separation of powers requires that the legislature, the executive, and the judiciary should be independent and confined to their specific functions. Any invasion of the other's turf is regarded as a breach, and consequently unconstitutional.22

Furthermore, the administrative penalties imposed by sections 51 (1) & (3), 52 (1) and 53 (1) (b) i to iii PPTA (as amended)cannot be validated by the provisions of Section 36 (2) of the Constitution. This is notwithstanding the fact that Section 36 (2) of the Constitution recognizes that a law shall not be invalidated by reason only that it confers on any government or authority power to determine questions arising in the administration of a law that affects or may affect the civil rights and obligations of any person. The provision prescribed two qualifications, hence any such the law must–

"(a) Provide for an opportunity for the persons whose rights and obligations maybe affected to make representations to the administering authority before that authority makes the decision affecting that person; and

(b) Contain no provision making the determination of the administering authority final and conclusive."

Contrary to the prescribed qualifications, the new provisions of sections 51 (1) & (3), 52 (1) and 53 (1) (b) i to iii PPTA (as amended)presupposethatthe administrative penalty to be imposed by the relevant agency for the alleged breach or contravention are not only final and conclusive, there is reservation for the right of the defendant to make representation to the agency before the imposition of the penalty. Indeed, only section 51 (3) PPTA (as amended)scarcely recognized that the administrative penalty may beimposed by the Court as an alternative. This article, therefore, is of the firm view that upon a challenge, the penalty sought to be imposed and the sections authorizing same are respectively liable to be set aside and declared void by the Court.23 It strongly recommends that our tax appeal tribunal and courts should prioritise justice considerations in interpreting tax statutes. Indeed, there is a presumption against the legislature intending what is unreasonable and inconvenient in interpreting the statute.24 Thus common-sense must be applied in construing statutes, and the construction agreeable to justice and reason must be adopted.25 What is more, for a Court or tax tribunal hold otherwise, within the context of the provisions under review amounts to abdication of judicial responsibility and breach to taxpayers' right to fair hearing.

Additionally, it is to be always noted that tax statutes naturally encroach on the personal and proprietary rights of taxpayers and are therefore interpreted strictly so as to respect the personal and proprietary rights.26


This paper acknowledges the significance of taxation to government's budgetary needs, with the accompanying need to encourage steady remittances of tax liabilities or compel compliances with tax obligations. However, while seamless tax collection, compliance, and enforcement measures which will help the government to realize its projected revenue are desirable, the principles of constitutionalism, rule of law and respect to fundamental rights cannot be the opportunity costs. This paper submits, therefore, that so long as the Constitution prioritises the principles of separation of powers under which judicial powers are vested in courts and the fundamental human rights to fair hearing, nothing in tax statutes should usurp the powers or infringe on the right.

Accordingly, this paper concludes that the recent administrative penalty provisions have no constitutional basis. It is thus expected that when the administrative penalty provisions come before the Court for interpretation, the Court will exercise its powers to invalidate the provisions. It is also hoped that the legislature will seize the opportunity during a subsequent enactment of the Finance Act to amend or delete the provisions.


1. The Finance Act 2023 was made on the 28th of May 2023.

2. The Act amended 11 Legislations to wit: Capital Gains Tax (CGT) Act, Companies Income Tax (CIT) Act, Customs, Excise Tariff, Etc. (Consolidation) (CET) Act, Personal Income Tax (PIT) Act, Petroleum Profits Tax (PPT) Act, Stamp Duties (SD) Act, Value Added Tax (VAT) Act, Tertiary Education Trust Fund (Establishment, etc) Act, Corrupt Practices and Other Related Offences Act, Public Procurement Act, and the Ministry of Finance Incorporated Act.

3. See section 1 (1) & (3) of the Constitution.

4. Sections 4, 5 and 6 of the Constitution respectively donated the powers of the federation to the three distinct arms or organs of the government; that is the Legislature, the Executive, and the Judiciary.

5. See Chapter IV (sections 33 to 46) of the Constitution guarantees fundamental human rights.

6. See section 6 (1) & (6) (a-b)

7. I. Ujah, "The Propriety of the 'Comply Before Complain Rules': wherein lies the Fundamental Rights of the Taxpayers?" published in Gravitas Review of Business & Property Law Vol.13 No.3, 2

8. Fidelity Bank Plc v Monye & Ors [2012] LPELR-7819 (SC) 34 [C]-[D].

9. 2016] LPELR-40843(CA) 37 [F]-[A]

10. (2014) 4 NWLR (Pt.1397) 343 at 375

11. Global Excellence Communications Ltd & Ors v Duke [2007] LPELR-1323 (SC) 26 [A]-[D], Aqua Ltd v Ondo State Sports Council [1988] LPELR-527 (SC) 52[A]-[B].

12. See footnote 1 above.

13. The relevant regulatory agency could be the Nigerian Upstream Petroleum Regulatory Authority, the Nigerian Midstream and Downstream Petroleum Regulatory Authority or the Federal Inland Revenue Service; depending on the petroleum operations or companies' activities that led to the commission of the offence.

14. Similar imposition of administrative penalties can be found in Regulations 13(7) & (8), 14 (4) & (5), 15 (3), 16 (5) & (8) and 17 (5) of the Income Tax (Transfer Pricing) Regulations, 2018, and Regulations 11, 12 and 13 of the Income Tax (Country-By-Country Reporting) Regulations, 2018

15. The punishment could be fine, imprisonment terms, combination of fine and imprisonment terms, or such other terms as the statute may prescribe. See also Proprietary Articles Trade Association v. Attorney General for Canada (1931) A.C 310.

16. See also Penal Code (Northern States) Federal Provisions Act, s.4

17. See Aoko v. Fagbemi & Anor (1961) 1 ALL NLR 400 and Idris v. FRN (2018) LPELR-44713(CA) (Pp 7 – 7 Paras B – C)

18. MFA v. Inongha (supra)

19. (2018) LPELR-44210(CA) (Pp 5 – 9 Paras E – C)

20. The letter was written pursuant to Section 6 (2) of the NOSDRA Act which provides that "an oil spiller is by this Act to report an oil spill to the Agency in writing not later than 24hours after the occurrence of an oil spill, in default of which the failure to report shall attract a penalty in the sum of five Hundred Thousand Naira (N500,000.00) for each day of failure to report the occurrence."

21. (2019) LPELR-51022(CA)

22. See Chevron (Nig) Ltd v. Imo State House of Assembly & Ors (2016) LPELR-41563(CA) (Pp 87- 88 Paras F – A). See also A-G. Oyo State & Ors. v. L.O. Adeyemi (Alafin of Oyo) & 5 Ors (1982) 3 NCLR 846 at pages 847 – 848.

23. The 1999 Constitution, s1(3).

24. I. Ujah, op. cit., page 146

25. ibid

26. See Citi Bank v FIRS, 2017 30 TLRN and Abioye & Ors v Yakubu & Ors [1991] LPELR-43(SC)

Originally published 2023-08-23

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