Recently, the Tax Appeal Tribunal (TAT) sitting at Enugu held that due process must be followed by tax authorities in demanding payment of taxes from taxpayers. This decision, made in the case of Polaris Bank PLC v Abia State Board of Internal Revenue (ABIR), reassures taxpayers that the tax authorities cannot impose demand notices on them, out of the blue.


In this case, Polaris Bank received a demand notice for Pay As You Earn (PAYE), Witholding Tax, etc. from the ABIR after ABIR completed a tax audit on Polaris for the years 2006 – 2011. Polaris made an objection to the demand notice but later paid a part of the demanded taxes.

ABIR later sent Polaris further demand notices and letters, giving Polaris seven (7) days in some instances and 48 hours in other instances, to pay up different taxes. ABIR stated that failure to pay the demanded sums would make the amounts final and binding on Polaris.

Polaris was aggrieved and took the matter to the TAT.


  1. TAT held that ABIR acted contrary to law by giving Polaris 7 days/48 hours to pay the demanded taxes, as the Personal Income Tax Act (PITA) in Section 58 allows a taxpayer to within 30 days, object to a demand notice.
  2. It also held that such demand notices could not be said to be final and conclusive because the law gives a taxpayer 30 days to object, and Polaris Bank objected within 30 days.
  3. TAT also held that the ABIR has no rights to collect Development Levy and Business Premises without any primary law of Abia State providing for imposition, assessment, collecting and accounting of Development Levy and Business Premises.
  4. Finally, TAT held that though penalty and interest on the money demanded by ABIR and undisputed by Polaris would have applied with respect to the 2006 -2011 years which the audit was carried on, bearing in mind that the demand notice in issue was issued in 2017, and that there is a six-year limitation on tax audit, only 2011 would have fallen within the six-year period. That is, the only penalty payable by Polaris was for 2011. It was however found that Polaris paid its taxes for 2011, so since it complied with the law in 2011, there was no penalty to pay. The TAT thus held that Polaris was off the hook for penalty and interest payments in relation to the audit.


Whenever the tax authorities issue anyone (e fit be you o) a demand notice, the law gives a number of days, usually 30 days, to object to the demand notice. This decision assures taxpayers that tax authorities cannot act outside the law. They must adhere to the statutory processes (and timelines) for collecting taxes from taxpayers or else, the TAT will put them in their place.

The decision also shows that tax authorities cannot just wake up one day and start imposing taxes that the law does not give them authority to collect. Polaris shined its eyes well and discovered that ABIR was trying to be fishy by imposing taxes that the law did not provide for. This case also shows that the TAT will protect taxpayers in this kind of situation and affirms the rule that “All taxes must be provided for, by law!”




Eniola Akinoso is the initiator of the TaxVille and an associate with the Tax Department at Olaniwun Ajayi LP. She is passionate about Tax.

Leave a Reply