This was part of the judgment of the Tax Appeal Tribunal (TAT) sitting in Abuja.

The five-member panel of TAT, chaired by Mrs Alice Iriogbe, entered the judgment in the terms of settlement agreed to by parties in the appeal.

The News Agency of Nigeria (NAN) reports that the NLNG Ltd had, in the appeal marked: TAT/ABJ/APP/331/2022, filed a notice of appeal dated and filed on April 21, 2022.

The company, an appellant, had sued the FIRS, a Federal Government’s revenue agency, as sole respondent.

The NLNG prayed the tribunal to restrain the revenue agency from collecting the sum of $141. 75 million dollars from it as CIT for the year under review.

It challenged the FIRS’ notice of additional assessment dated Dec. 15, 2021, and the notice of refusal to amend (NORA) dated March 22, 2022.

In the appeal, NLNG argued that by the provisions of Clause 8(A) of the TCPAs (Time Charter Party Arrangements), the appellant Is contractually obligated to pay for the use and hire of the vessels.

This is at a daily hire rate, which consist of the Fixed and Variable Elements from the time of delivery of the vessels to the appellant and continuing until the time and date of redelivery i.e., handover date of the vessels by the appellant to BGT (Bony Gas Transport) at the end of the lease.”

The company said although the parties to the TCPAs agreed that the lease and the attendant lease payments will continue until the redelivery dates of the vessels which were to occur at the end of the agreed tenure of the lease, it became expedient and necessary for the appellant to replace the old steam vessels with more efficient Dual Fuel Diesel Engine vessels in order to reduce the appellant’s operating expenses.

It said in line with its business objectives, the firm entered into a termination agreement with BGT to exit the TCPAs prior to the expiration of the leases.

It said that the FIRS however took the position that the terminal costs were not reasonably and necessarily incurred for its business operations.

The NLNG therefore sought seven reliefs including “a declaration that, having regard to the TCPAs, the refit and drydock payments in the sum of 141.7 million dollars were ultimately incurred by the appellant without any duplication in the books of BGT.

“A declaration that the provision of Section 90 of the CITA (Companies Income Tax Act) Is inapplicable to the appellant in this appeal.

“A declaration that having regard to the provisions of the CITA, the TCPAs, the International Accounting Standard 16 and 17 and other applicable laws, the respondent was wrong in its decision to refuse to set aside/discharge the notice of additional assessment reference number: PDBA/CIT/AUD/16/207 dated 15th December, 2021.”

The gas company therefore sought an order setting aside the FIRS’ Notice of Additional Assessment for the reasons set out in grounds one to four and the accompanying particulars contained in this notice of appeal.

It equally sought an order of injunction restraining the FIRS, its agents, officers or privies, from further assessing the company to tax for the 2016 year of assessment as set out in the demand note reference number: PDBA/CIT/AUD/16/207 dated December 15, 2021, among other reliefs.

Delivering the judgement, the tribunal observed that parties had engaged in process of settlement even when the trial was ongoing in  the matter.

The TAT, in the certified true copy of the judgement, which was delivered on Thursday and made available to News Agency of Nigeria (NAN) on Tuesday, said: “On the 10th July, 2024, parties filed a term of settlement in the tribunal.”

The panel held that in the terms of settlement signed by parties, the NLNG agreed to pay FIRS “the sum of USD$27,500,000 (Twenty-Seven Million, Five Hundred Thousand Dollars) as Full and final settlement of the Revised CIT Assessment and the subject matter of this appeal if payment is made on or before Friday, 12th July 2024.

“In furtherance of the above the appellant (NLNG) on Monday 8th July, 2024, duly remitted the said sum of USD$27,500,000 (Twenty-Seven Million, Five Hundred Thousand Dollars) to the respondent (FIRS), being the full and final settlement amount agreed upon by the parties.

“In the circumstance, the terms contained in the terms of settlement have been adopted and made judgement of this Honourable Tribunal.

“This is the judgment of this Honourable Tribunal.”

Earlier, in a ruling, the tax panel dismissed the NLNG’s interlocutory motion seeking to disqualify the tribunal from further sitting on the grounds that the company did not have confidence in the tribunal to adjudicate on the matter.

In the motion filed, the company had asked the tribunal to direct the chair person, Mrs Iriogbe, and another member in the person of Mr Ajayi Bamidele, who were former staff of FIRS before retirement, to recuse themselves from further participation in hearing of the matter as their presence in the panel posed likelihood of bias against the applicant.

Delivering the ruling, the tribunal said it had gone through the application and cannot see any cogent reason for it.

It agreed with the FIRS lawyer’s argument citing Section 59 of the FIRS Establishment Act 2007 (as amended) and Paragraph 8 of the 5th Schedule of the same Act.

“The appellant (NLNG) counsel also said that he does not have any reason to suspect that the panel would be biased but that other people out there might have a contrary view.

“However, in view of the statutory provisions quoted above, the only option probably open to the applicant would be to seek to invalidate the statutory provisions in a superior court of law.

“In view of the foregoing, this tribunal sees this application as being frivolous and it is hereby dismissed with no order as to cost,” the TAT ruled.

NAN