Court throws out suit challenging stamp duty collection by banks

The Federal High Court siting in Lagos, on Thursday, May 30,
2019 struck out a suit filed against the Governor of the Central
Bank of Nigeria (CBN) challenging a circular issued by the CBN on
January 15, 2016 directing and authorizing all Deposit Money Banks
(DMBs) and other financial institutions to enforce collection of
₦50 stamp duty on electronic transfers and teller deposits from
₦1,000 and above (Eligible Bank Transactions).

The Applicants (Incorporated Trustees of Laws and Rights
Awareness Initiative & Mr. Victor Adeyon) had commenced the
suit against the Governor of CBN on February 9, 2017 praying the
Court for an Order of Mandamus to compel the Governor of the CBN to
issue another Circular redirecting DMB’s to stop deducting and
remitting ₦50 as stamp duty on eligible banking transactions.

The Applicants through a Motion filed by their Counsel, Olumide
Babalola, sought inter alia for a Declaration that by virtue of the
decision in CA/L/437A/2014 Standard Chartered Bank v Kasmal
International Services Ltd (Appeal No: SC/524/2016) delivered on
April 21, 2016, the Respondent ought to have issued another
Circular directing banks to stop deducting and remitting stamp
duties from cash deposits and/or electronic transfers over
₦1000.

The Respondent, through its Counsel, Professor Fabian Ajogwu,
SAN opposed the Applicants’ suit and challenged the legality of the
remedy being sought by the Applicants.

The Respondent had argued that that the Court was not vested
with the jurisdiction to entertain the matter as the claim is
statute barred, that the Judgment which the Applicants sought to
enforce is the subject of an appeal at the Supreme Court and that
the Respondent was an agent of a disclosed principal the Central
Bank of Nigeria amongst others.

In delivering his Judgment, Justice Chuka Obiozor, held that the
Applicants had failed to prove that they were entitled to an Order
of Mandamus compelling the Respondent to issue another Circular
directing deposit money banks to stop deducting and remitting stamp
duties from cash deposits and/or electronic transfers.

The Court further ruled that the Suit had been overtaken by
events by virtue of a prior Federal High Court decision on the same
subject matter in Suit No: FHC/L/CS/126/2016 – Retail Supermarkets
Nigeria Limited V. Citibank Nigeria Limited & Central Bank of
Nigeria.

The judge reasoned that since there was a subsisting judgment in
respect of the same subject matter it was unnecessary to grant the
Reliefs sought by the Applicants and consequently struck out the
Suit.

Subscribe ToNairalaw News!