A-G Ogun state v. Aberugba (1985)

[1985] 1.
A.-G. of Ogun State v. Aberuagba
395

THE ATTORNEY-GENERAL, OGUN STATE ………………………APPELLANTS

V.

1.ALHAJA AYINKE ABERUAGBA

2.ALHAJI ABUDU AINA

3.ALHAJA ADUNNI AKINSANYA

4.CHIEF OLUMUYIWA OKENLA

  1. ALHAJA AGBEKE SHOTE ……………………….. RESPONDENTS

6.MRS. L.O. ODUNSI

  1. ALHAJA AMUDATU SANNI (For themselves and on behalf of Wholesale Purchasers of Beer in Ogun State)

SUPREME COURT OF NIGERIA

SC. 20/1984

GEORGE SODEINDE SOWEMIMO, C.J.N.(Presided)

AYO GABRIEL IRIKFEFE, J.S.C.

MOHAMMED BELLO, J.S.C. (Read the lead Judgment)

KAYODE ESO, J.S.C.

AUGUSTINE NNAMANI, J.S.C.

MUHAMMADU LAWAL UWAIS, J.S.C.

ADOLPHUS GODWIN KARIBI-WHYTE, J.S.C.(Dissented)

FRIDAY, 12TH APRIL, 1985

CONSTITUTIONAL LAW – Legislative powers – Federal and State – Fiscal matters.

CONSTITUTIONAL LAW: – Ogun State Sales Tax Law – Whether tax imposed is excise duty within Item 15 of the Exclusive Legislative List.

CONSTITUTIONAL LAW – Item 61 of the Exclusive Legislative List – SalesTax Law – Whether an exercise of power with respect to trade and commerce.

CONSTITUTIONAL LAW – Constitutionality of provisions of Sales TaxLaw – Section 4 of the Constitution considered.

WORDS AND PHRASES – “In particular” in item 61 of the Exclusive Legislative List.

WORDS AND PHRASES – “Excise Duty” in Item 15 of the Exclusive Legislative List.

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Issues:

1.
Whether the omission to include item 38 of the 1963 and 1960 Exclusive Legislative List in the 1979 Constitution shows an intention to regard the Sales Tax Law as a residual subject or whether the power to legislate on all fiscal subjects have been vested in the Federal Government.

2.
Whether the tax imposed under the Sales Tax Law of Ogun State is an excise duty within the meaning of that term in Item 15 of the Exclusive Legislative List.

3.
Whether the enactment of the Sales Tax Law is an exercise of power with respect to Trade and Commerce in item 61 of theExclusive List.

4.
Is the Sales Tax Law valid and constitutional in so far as it imposes tax on purchasers of taxable goods?

5.
If the answer to question 4 is in the affirmative, are sections 4, 5and 8 valid and constitutional as being incidental to the execution of the Sales Tax Law?

Facts:

The House of Assembly of Ogun State enacted the Sales Tax Law 1982 which imposed a tax upon the purchase of specified goods and services and made provisions for the collection of the same. Section 3 of the Law provides:

3(1) A tax to be known as Sales Tax, shall be charged in accordance with the provisions of this law on all taxable products brought into the State and on the supply of goods and services in any inn not exempted from the requirement of registration under this Law at the rate specified opposite each class of goods or service in the First Schedule to this Law.

2.
The tax shall be under the care and management of the Board.

3.
All money and securities for money collected or received for or on account of the tax shall form part of the revenue of the State?

4.
The tax shall be due:

(i)
in the case of the supply of goods and services in an inn from the purchaser of goods and services at the time of the supply of such goods and services and shall be accounted for and remitted to the Board by the InnKeeper within such time and in such manner as are herein prescribed;

(ii)
in the case of any other taxable product by the purchaser at the time of entry into the contract of purchase of the taxable product with the wholesaler and shall be collected, accounted for and remitted to the Board by the wholesaler in the State, within such time and in such manner as are herein prescribed.

5.
The tax shall be a debt due to the Board and recoverable as such by the Board from the innkeeper or wholesaler whose duty it is to collect, account for and remit the tax to the Board.

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6.
The daily records of the tax shall be kept and shall be remitted monthly by the innkeeper or wholesaler to the Board on or before the l0th day of the month next following the month for which the tax is due.

7.
The Executive Council may from time to time by Order amend the list of products and services liable to Sales Tax and may also by Order alter the rate of tax payable on any taxable product or class of goods or taxable service.

By an Originating Summons the respondents, as plaintiffs, who are wholesale purchasers of beer in Ogun State for themselves and on behalf of wholesale purchasers in the state claimed inter alia;

“A declaration that sections 3(1), 3(4)(ii), 3(7), 4, 5, 8 and 21 of the Sales Tax Law 1982 are inconsistent with the provisions of the Constitution of the Federal Republic of Nigeria and accordingly void.”

The main provisions of the Constitution which the plaintiffs claimed to have been violated by the law are Section 4(2), (3) and items 15 and 61 of the Exclusive Legislative List.

Section 4 of the Constitution provides:

4(1) The legislative powers of the Federal Republic of Nigeria shall be vested in a National Assembly for the Federation which shall consist of a Senate and a House of Representatives.

(2)
The National Assembly shall have power to make laws for the peace, order and good government of the Federation or any part thereof with respect to any matter included in the ExclusiveLegislative List set out in Part I of the Second Schedule to thisConstitution.

(3)
The power of the National Assembly to make laws for the peace, order and good government of the Federation with respect to any matter included in the Exclusive Legislative List shall, save as otherwise provided in the Constitution, be to the exclusion of theHouses of Assembly of States.

(4)
In addition and without prejudice to the powers conferred by subsection (2) of this section, the National Assembly shall have power to make laws with respect to the following matters, that is to say –

(a)
any matter in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to this Constitution to the extent prescribed in the second column opposite thereto; and

(b)
any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution.

(5)
If any Law enacted by the House of Assembly of a State is inconsistent with any law validly made by the National Assembly, the law made by the National Assembly shall prevail, and that other Law shall to the extent of the inconsistency be void.

(6)
The legislative powers of a State of the Federation shall be vested in the House of Assembly of the State.

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(7)
The House of Assembly of a State shall have power to make laws for the peace, order and good government of the State or any part thereof with respect to the following matters, that is to say –

(a)
any matter not included in the Exclusive Legislative List set out in Part 1 of the Second Schedule to this Constitution;

(b)
any matter included in the Concurrent Legislative List set out in the first column of Part II of the SecondSchedule to this Constitution to the extent prescribed in the second column opposite thereto; and

(c)
any other matter with respect to which it is empowered to make laws in accordance with the provisions of thisConstitution.

Items 15 and 61 of the Exclusive Legislative list provide:

“15. Customs and Excise duties.”

“61. Trade and Commerce, and in particular –

(a)
trade and commerce between Nigeria and other countries including import of commodities from Nigeria, and trade and commerce between the States;

(b) 鈥︹€�.

                  (c)         

鈥︹€�.

(d) 鈥︹€�.

(e)

control of prices of goods and commodities designated by the National Assembly as essential goods or commodities; and

(f)
……..

The matter was fully argued before Craig, C.J. and in the course of hearing, counsel for the plaintiffs requested the High Court to refer the question as to the constitutional validity of the law to the Court of Appeal for determination pursuant to the provisions of Section 259(2) of the 1979 Constitution. The learned Chief Judge accordingly referred the matter to theCourt of Appeal which gave its decision as follows:

Question 1

Answer: The power to legislate on trade and commerce is vested in the Federal Government. The omission of Item 38 is covered by Item 15 and/or 61 of the exclusive legislative list in the 1979 Constitution.

Question 2

Answer: YES, it is; except as to the tax on the supply on goods and services in an Inn.

Question 3

Answer: Yes.

Question 4

Answer: No, but it imposes tax on products not on purchasers (of goods).

Question 5

Answer: The answer to question 4 above is negative. The second part of this question therefore does not arise.

The Defendant/Appellant was dissatisfied with the decision of the Court of

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Appeal and has therefore appealed to the Supreme Court.

Held: (By majority)

1.
A State has the power to impose tax on all matters in the concurrent list and residuary matters. However, the taxing power of a State over the concurrent matters is subject to the rule of inconsistency under Section 4(5) of the Constitution and the doctrine of covering the field.

2.
The Federation is entitled to levy Sales tax on any saleable matter within its competence. A State can also do the same within its competence. However, it is not within the competence of a State;

(1)
to make sales tax law affecting any of the matters in the Exclusive Legislative List; or

(2)
to make any sales tax law in the concurrent legislative list which is inconsistent with any law validly made by the Federation; or

(3)
to make any sales tax law on any matter in the concurrent list where any law validly made by the Federation has covered the field.

3.
The control of the Economy is not within the exclusive power of the Federation. Each Government (Federal, State and Local) has a share in the control. While the Constitution requires the Federation to control the national economy, it also empowers the State to participate in the development of the economy within the State and a Local Government in the development of the economy within its area of jurisdiction. Consequently, the power to legislate on all fiscal subjects have not been vested in the Federal Government (Eso, J.S.C. dissented).

4.
Since the Constitution does not confer on the Federation exclusive power over trade and commerce in Item 61, the words “In Particular” in item 61 are words of limitation. Consequently, the trade and commerce power of the Federation is limited to the sub items(a) to (f) therein. (Eso, J.S.C. dissented)

5.
International trade and commerce and inter-state trade and commerce are specifically reserved for the Federation, while trade and commerce within a State is left as a residuary matter to the States.

6.
Section 3(1) of the Ogun State Sales Tax Law in so far as it imposes sales tax on products brought into Ogun State is unconstitutional by offending Section 4(3) of the Constitution in that the tax is a discriminating tax directed against inter-state or international trade and commerce which are within the exclusive regulatory power of the Federation under Item 61(a).

7.
Since the Federal Government has controlled the prices of petrol, diesel oil and petroleum products under the Price Control Act 1977 and the Price Control Commodities Order22 of 1979 Constitution (which are existing laws) the sales tax of Ogun State on these products which is intended to increase the prices of these products is inconsistent with the Price Control Act and the order made there under it (the Sales Tax) is unconstitutional and void.

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8.
“Excise” within the purview of Item 15 of the Exclusive LegislativeList is a duty tax charged on goods manufactured or produced inNigeria whether in the process of their manufacture or production or their storage or distribution before their sale to the consumers in Nigeria but does not include a tax imposed on the sale of goods on a distributor, retailer or consumer. Therefore, “Excise” is a tax on the goods while sales tax is a tax on their sale. (Nnamani, J.s.c. dissented).

9.
The sales tax imposed under Section 3(1) and 3(4)(ii) of the Ogun State Sales Tax Law is not an excise duty. The mere appointment of wholesalers, which include manufacturers, as the tax collectorsis not sufficient to change the character of the sales tax to Excise.(Nnamani, J.S.C. dissented)

10.
The Constitution should be interpreted in such a manner as to satisfy the susceptibilities of the Nigerian society for whom it was made and to meet the needs of the Nigerian Constitution. (Per Bello, J.S.C.); and words must be given their ordinary, plain and natural meaning (Per Eso, J.S.C.); moreso, the construction which will best serve the purpose of the Constitution should be placed on the words (Per Uwais, J.S.C.).

Editor’s note:

Karibi-Whyte, J.S.C. dissented from the entire majority judgment.

Eso, J.S.C. dissented in paragraphs 3 and 4.

Nnamani, J.S.C. dissented in paragraphs 8 and 9.

Nigerian Cases Referred to in the Judgment:

Adesanya v. President of Nigeria (1981) 5 SC. 112

Attorney-General, Ogun State v. Attorney-General of the Federation (1982) 3 NCLR 166

Awo v. Shagari (1979) 6/9 SC. 51

Bronik Motors Ltd. v. Wema Bank (1983) 6 SC. 158

Ifezue v. Mbadugha (1984) 1 SCNLR. 427

Rabiu v. State (1980) 8/11 SC. 130

Uwaifo v. Attorney-General, Bendel State (1982) 7 SC. 124

Foreign Cases Referred to in the Judgment:

Amagnano Co. v. Hamilton 292 US. 210

Anderson’s Pty. Ltd. v. Victoria (1964) 111 CLR. 353

Aryan v. Akers 308 US. 581

Associated Steamships Pty. Ltd. v. Western Australia (1969) 120 CLR92

Atlantic Smoke Shops Ltd. v. Conlon (1943) AC. 550

Attorney-General, British Columbia v. Canadian Pacific Rly. (1927)AC. 934

Attorney-General, British Columbia v. Kingcome Navigation Co.(1934) AC. 934

Attorney-General, British Columbia v. MacDonald Board (1938) 60CLR. 263

Attorney-General, British Columbia v. McDonald Murphy LumberCo. Ltd. (1930) AC. 357

[1985] 1.
A.-G. of Ogun State v. Aberuagba
401

Attorney-General, Manitoba v. Attorney-General, Canada (1925) AC.561

Bailey v. Drexel Furniture Co. 259 US. 20

Bank of England v. Vagliano Brothers (1891) AC. 107

Bank of New South Wales v. Commonwealth (1947-48) 76 CLR.l

Bolton v. Madsen (1963) 110 CLR. 264

Brown v. Houston 114 US. 622

Brown v. Maryland 12 Wheat 419

Citizens Insurance Co. of Canada v. Parson (1881) 7 AC. 96

Clampham v. National Assistance Board (1961) 2 QB 77

Commonwealth & AN. v. South Australia (1926) 38 CLR. 408

Dass v. Wealth Tax Officer (1965) A.I.R. 138

Dean Milk Co. v. City of Madison 340 US. 349

Dikenson’s Arcade Pty. Ltd. v. State of Tasmania & Anor. (1974) 13 CLR. 177

Dennis Hotels Pty. Ltd. v. Victoria (1961) 104 CLR. 529

Eisner v. Macomber 252 US. 189

Flint v. Stone Tracy & Co. 220 US. 107

Fox v. Robbins (1909) 8 CLR. 115

Gilbons v. Ogden 9 Wheat (22 US. 1)

Governor-Gen. v. Madras (1945) A.I.R. (P.C.) 98

Joseph v. Carter (1947) 330 US. 422; 67 S.CT.,815

Loan Association v. Topeka US. 20 Wall 655

Lower Mainland Dairy Products v. Crystal Dairy Ltd. (1933) AC. 168

Mathews v. Chicory Marketing Board 60 CLR. 263

McCullock v. Maryland 4 Wheat 316 (1819)

Navindra v. Commissioner of Income Tax (1955) A.I.R. (S.CT.) 58

Nippert v. City of Richmond 327 U.S. 416

Overseas Aviation Engineering Ltd., Re (1963) Ch. 24

Parton v. Milk Board (1949) 80 C.L.R. 229

Patton v. Brady 46 L.ED. 713

Peterswald v. Bartley (1904) 1 CLR. 497

R. v. Petters (1886) 16 QBD. 636

Richfield Oil Corporation v. State Board of Equalization 329 US. 69

Sing v. State of Uttar Pradesh (1962) A.I.R. 1563

State of New South Wales v. Commonwealth (1909) CLR. 179

Sunshine Antracite Coal Co. v. Adkins 310 US. 381 (1940)

United States v. Darby 312 US. 100

United States v. Kahrigher 345 US. 22 (1953)

United States v. South-Eastern Underwriters Association 322 US. 533

United States v. Wrightwood Dairy Co. 315 US. 110 (1942)

Western Australia v. Chamberlain Industries Pty. Ltd. 121 CLR. 1

Western Live Stock v. Bureau of Revenue (1939) 303 US. 250

Wickard v. Filburn 317 US. 111 (1942)

Nigerian Statutes Referred to in the Judgment:

    Brewing Regulations 1959 - Regulations 6, 7 and 12(1)

    Constitution of Nigeria 1960 - Item 38

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Constitution of the Federal Republic of Nigeria 1963 – Item 38

Constitution of the Federal Republic of Nigeria 1979 – Items 7, 8, 9, 10; Section D of the Concurrent Legislative List Item H18 of Part II Concur-rent Legislative List Items 6, 11, 15, 22, 31,38, 57, 58, 61(a)-(f), 67 of the Exclusive Legislative List

Sections 4, 4(2), 4(5), 7(1), 7(3), 7(5), 16, 259(2), 274(4)(b), 277(4)

Constitution (Suspension and Modification) Decree No. 1 1984 Section1(1)

Commodities Board Decree (No. 29) 1977

Customs and Excise Management Act 1958 – Sections 34, 35, 82(4), 85,101, 107, 116(1), 119, 119A, Part IV, 198

Customs and Excise Management (Amendment) Act 1960 – Section 14

Customs Tariff Act 1965

Excise Ordinance Cap 65 Laws of the Federation 1958 – Sections 2, 15, 24(1), 29

Excise (Control and Distillation) Act, 1964

Excise Tariff Ordinance 1958 – Sections 2 and 7

Excise Tariff (Consolidation) Act, 1973 – Section 6

General Excise Regulations (No. 55) 1958

Interpretation Act 1964

Price Control Board Act, 1977

Price Control (Control of Commodities) Orders L.N. 21 and 22, 1979

Produce Sales Tax Law, Cap. 99 Laws of Western Nigeria, 1959

Sales Tax Law 1982 – Sections 3(1), 3(4)(Li), 3(7), 4, 5, 8 and 21

Tobacco Excise Duties Ordinance 1933 – Section 6

Foreign Statutes Referred to in the Judgment:

British North America Act 1867 – Section 91, Heads 2 and 3 Section 92 Heads 2 (Canada)

Australia Constitution – Sections 90 and 93 (Australia)

United States Constitution – Article 1 Section 8 (U.S.A.)

Nigerian Rules of Court Referred to in the Judgment:

Court of Appeal Rules – Order 2 Rule 1

Books Referred to in the Judgment:

Black’s Law Dictionary

Blackstone: Commentaries on the Laws of England Vol. 1 Page 318

Chambers Twentieth Century Dictionary

Jowitts Dictionary of English Law Second Edition

Maxwell on Interpretation of Statutes 12th Edition page 64

Mozley and Whiteley’s Law Dictionary, Eight Edition

Oxford Advanced Learner’s Dictionary for Current English

Oxford English Dictionary

Oxford Universal Dictionary

Webster’s Dictionary Page 364

Webster’s New 20th Century Dictionary Page 1934

[1985] 1.
A.-G. of Ogun State v. Aberuagba
(Bello J.S.C.)
403

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Appeal:

This was an appeal from the decision of the Court of Appeal (Nasir, P. Phil-Ebosie, Kazeem, Ete and Uche Omo, JJ.CA.) on questions of reference to it from the High Court of Abeokuta by Craig, C.J. on the constitutionality of the Ogun State Sales Tax Law 1982. The defendant/appellant was dissatisfied with the answers given to the questions by the Court ofAppeal and has therefore appealed to the Supreme Court.

In the judgment of the Supreme Court, the appeal partly succeeded and partly failed.

History of the Case:

Supreme Court:

Appeal No: SC.20/1984

Date of Judgment: 12th day of April, 1985

Names of Justices in the Appeal: Sowemimo, C.J.N. (Presided), Irikefe, TS.C., Bello, J.S.C. (Read the lead judgment), Eso, J.S.C., Nnamani, J.S.C., Uwais, J.S.C., Karibi-Whyte, J.S.C.

Court of Appeal:

Division of the Court of Appeal from which the appeal was brought: Court of Appeal, Ibadan

Names of Justices that sat in the judgment: Mamman Nasir,P.C.A., John Aniemeka Phil-Ebosie, J.C.A., Boonyamin Oladiran Kazeem, J.C.A., Sunday James Ete, J.C.A., UcheOmo, J.C. A. (Read the lead judgment)

Date of Judgment: 13th day of September, 1983Appeal No: FCA/1/34/83

High Court:

Name of the High Court: Abeokuta High CourtName of Judge: Hon. Justice Craig, C.J,

Date of Decision: 15th day of December, 1982Suit No. :M/18/82

Counsel:

Chief A. Adaramaja, (with him A. Singua, Mrs. M.O. Ononuga) – for the Appellants

Chief F.R.A. Williams, S.A.N., (with him B.O. Babalakin, F.R.A.Williams, (Jnr.) – for the Respondents

BELLO, J.S.C.: The principle of the division of legislative powers of government enshrined in the Constitution of the Federal Republic of Nigeria 1979, hereinafter referred to as the Constitution, is the base of the dispute in this case on appeal. So it is pertinent to state the principle from the onset. It may also be observed that the case was decided before the Constitution (Suspension and Modification) Decree 1984 No. 1 with retrospective effect from 31st December, 1983 and for this reason the appeal must be determined in accordance with the relevant provisions of the Constitution as

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The legislative powers of Nigeria were shared between the Federation and the component States by section 4 of the Constitution in these terms:

“4(1) The legislative powers of the Federal Republic of Nigeria shall be vested in a National Assembly for the Federation which shall consist of a Senate and a House of Representatives.

(2) The National Assembly shall have power to make laws for the peace, order and good government of the Federation or any part thereof with respect to any matter included in the ExclusiveLegislative List set out in Part I of the Second Schedule to thisConstitution.

(3) The power of the National Assembly to make laws for the peace,order and good government of the Federation with respect to any matter included in the Exclusive Legislative List shall, save as otherwise provided in the Constitution, be to the exclusion of theHouse of Assembly of States.

(4) In addition and without prejudice to the powers conferred by subsection (2) of this section, the National Assembly shall have power to make laws with respect to the following matters, that is to say –

(a) any matter in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to this Constitution to the extent prescribed in the second column opposite thereto; and

(b) any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution.

(5)

If any Law enacted by the House of Assembly of a State is inconsistent with any law validly made by the National Assembly, the law made by the National Assembly shall prevail, and that otherLaw shall to the extent of the inconsistency be void.

(6)
The legislative powers of a State of the Federation shall be vested in the House of Assembly of the State.

(7)

The House of Assembly of a State shall have power to make laws for the peace, order and good government of the State or any part thereof with respect to the following matters, that is to say –

(a)
any matter not included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution;

(b)
any matter included in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to thisConstitution to the extent prescribed in the second column opposite thereto; and

(c)
any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution.”

The provisions of section 4 which has been suspended by the Decree1984 No. 1, were clear. The National Assembly was vested with exclusive legislative powers in respect of all the matters specified in the Exclusive

[1985] 1.
A.-G. of Ogun State v. Aberuagba
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Legislative List and, save as expressly provided in the Constitution, theHouse of Assembly of a State had no legislative power in respect of any of the matters in the Concurrent Legislative List but legislations made by theNational Assembly on matters within the Concurrent List had supremacy over State’s legislations on the same matters. In this respect a Law enacted by a State might be void either on the ground of inconsistency as per Section4(5) above or on the ground of covering the field where identical legislations, without any inconsistency, on the same subject matter were validly made by the State and the Federation. In such situation the State’s Law must give way to the Federal legislation: Attorney-General of Ogun State v. Attorney-General of the Federation (1982) 3 N.C.L.R. 166 at 179.

A careful perusal and proper construction of section 4 would reveal that the residual legislative powers of government were vested in the States. By residual legislative powers within the context of section 4, is meant what was left after the matters in the Exclusive and Concurrent Legislative Lists and those matters which the Constitution expressly empowered the Federation and the States to legislate upon had been subtracted from the totality of the inherent and unlimited powers of a sovereign legislature. The Federation had no power to make laws on residual matters.

Now, the defunct House of Assembly of Ogun State enacted the SalesTax Law 1982 which imposed a tax upon the purchase of specified goods and services and made provisions for the collection of the same. Section 3 of theLaw reads:

“3(1) A tax to be known as Sales Tax, shall be charged in accordance with the provisions of this Law on all taxable products brought into the State and on the supply of goods and services in any inn not exempted from the requirement of registration under thisLaw at the rate specified opposite each class of goods or service in the First Schedule to this Law.

(2)
The tax shall be under the care and management of the Board.

(3)
All money and securities for money collected or received for or on account of the tax shall form part of the revenue of the State.

(4)
The tax shall be due:

(i)
in the case of the supply of goods and services in an inn from the purchaser of goods and services at the time of the supply of such goods and services and shall be collected and accounted for and remitted to the Board by the inn keeper within such time and in such manner as are herein prescribed;

(ii)
in the case of any other taxable product by the purchaser at the time of entry into the contract of purchase of the taxable product with the wholesaler and shall be collected, accounted for and remitted to the Board by the wholesaler in the State, within such time and in such manner as are herein prescribed.

(5)
The tax shall be a debt due to the Board and recoverable as such by the Board from the inn keeper or wholesaler whose duty it is to collect, account for and remit the tax to the Board.

(6)
The daily records of the tax shall be kept and shall be remitted monthly by the inn keeper or wholesaler to the Board on or

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before the 10th day of the month next following the month for which the tax is due.

(7)
The Executive Council may from time to time by Order amend the list of products and services liable to sales tax and may also by Order alter the rate of tax payable on any taxable product or class of goods or taxable service.” (Italics mine)

Under section 2 of the Law –

“the Board” means the State Tax Board established under theIncome Tax Law;

“wholesaler” means any person in the State whether he is the manufacturer or not of the goods who sells a taxable product to a person who carries on a business of selling goods of that class again;

“taxable product” means any product specified in Part I, II or III of the First Schedule hereto.

In the First Schedule to the Law, it was provided as follows:

FIRST SCHEDULE

(Sections 2 and 3)

PART I

Products Rate of Tax

Petrol ……………………………………………….. 1 kobo per litre

Diesel Oil ……………………………………………….. 1 kobo per litre

Petroleum products other than Petrol

and diesel oil ………………………………………………. 1 kobo per litre

PART II

Products ………………………………………………. Rate of Tax

Drinks (Beer and Alcoholic spirits) ……………………. 10% of Retail price

Tobacco ………………………………………………. 10% of Retail price

PART III

Products Rate of Tax

Paints ………………………………………………. 5%o of Retail price

PART IV

Products Rate of Tax

Sales and Services provided in Inns

to lodgers and others ……………………………………. 10% of the gross

Customers ………………………………………………. Charges of the Inn”

In order to facilitate effective and efficient management in the administration of the Law and particularly to ensure that the tax collected reach the Board, the Law requires the inn keepers and wholesalers who are appointed as the tax collectors to register with the Board, to keep and maintain proper books and accounts of all transactions by them on taxable pro-duct or service and to render monthly account of their collections together with the tax collected to the Board. It is an offence for any person who is not registered to collect sales tax.

With the foregoing preamble, the facts and circumstances of the case on appeal may now be stated. By an originating summons the Appellants as

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plaintiffs, who are wholesale purchasers of beer in Ogun State instituted the suit in the High Court of Ogun State for themselves and on behalf of wholesale purchasers in the State claiming against the defendant nowRespondent, as follows:

(i)
A declaration that Section 3(1), 3(4)(ii), 3(7) , 4, 5, 8 and 21 of theSales Tax Law 1982 are inconsistent with the provisions of theConstitution of the Federal Republic of Nigeria and accordingly void.

(ii)
An injunction restraining all officers servants and agents of theGovernment of Ogun State from executing any of the provisions of the said enactment or from requiring the Plaintiffs or any of them to implement or otherwise carry out the said provision.

(iii)
Such further or other reliefs as to the Court may deem just.”

The matter was fully argued before Craig, C. J. In the course of hearing,

learned counsel for the plaintiffs requested the High Court to refer the question as to the constitutional validity of the Law to the Court of Appeal for determination pursuant to the provisions of section 259(2) of the Constitution. After hearing submissions of counsel on all the issues, the learned Chief Judge delivered a well considered Ruling in which he expressed his opinion that substantial questions of law of urgent public importance were involved in the suit. Accordingly, in pursuance of section 259(2) of the Constitution he referred to the Court of Appeal the following questions:

(1)
Whether the omission to include item 38 of the 1960 and 1963Exclusive Legislative List in the 1979 Constitution shows an intention to regard the Sales Tax Law as a residual subject or whether the power to legislate on all fiscal subjects have been vested in the Federal Government.

(2)
Whether the tax imposed under the Sales Tax Law is an excise duty within the meaning of that term in item 15 of the ExclusiveLegislative List.

(3)
Whether the enactment of the Sales Tax Law is an exercise of power with respect to Trade and Commerce in item 61 of theExclusive List.

(4)
Is the Sales Tax Law valid and constitutional in so far as it imposes tax on purchasers of taxable goods?

(5)
If the answer to question 4 is in the affirmative, are sections 4, 5and 8 valid and constitutional as being incidental to the execution of the Sales Tax Law?”

In his lead judgment (with which Nasir, P., Phil-Ebosie, Kazeem and Etc, JJ.C.A. concurred) Omo J.C.A., after he had extensively considered the submissions of learned counsel and reviewed the Australian and Canadian cases cited by counsel in support of their submissions, answered the questions on reference as follows:

“In view of my findings above, I will answer the questions refer-red to this Court, and set out by the learned trial judge in the court below, seriatim as follows:

QUESTION 1

Answer: The power to legislate on trade and commerce is vested

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in the Federal Government. The omission of Item 38 as set outdoes not show any intention to regard the Sales Tax Law as a residual subject. Power conferred on the states by Item 38 is covered by Item 15 and/or 61 of the exclusive legislative list in the 1979 Constitution.

QUESTION 2

Answer: YES, it is; except as to the tax on the supply on goods

and services in an Inn.

QUESTION 3

Answer: Yes.

QUESTION 4

Answer: No, but it imposes tax on products not on purchaser (of goods).

QUESTION 5

Answer: The answer to question 4 above is negative. The second part of this question therefore does not arise.”

The Appellant was not satisfied with the decision of the Court ofAppeal and so he has appealed to this Court on the two grounds of appeal,which read:

(1) The Federal Court of Appeal erred in law in holding that the Ogun State Sales Tax Law 1982 by imposing Sales tax on taxable products brought into the state imposes excise tax within the meaning of Item 15 of the exclusive legislative list of the 1979 Constitution.

PARTICULARS OF ERROR

(a)
The Sales Tax Law 1982 is not a tax on production of goods but upon the consumer who is the ultimate payer of the tax.

(b)
Excise tax is an indirect tax while Sales Tax is a direct tax on the consumer.

(c)
Excise tax is paid by the manufacturer who cannot be reimbursed while sales tax if paid by the manufacturer is reimbursed by the consumer who is the ultimate payer.

(2)
The Federal Court of Appeal erred in law when it held that SalesTax comes within “Trade and Commerce” in Item 61 of the Exclusive Legislative List to the 1979 Constitution.

PARTICULARS OF ERRORS

(a)
Trade and Commerce as provided within Item 61 of the Exclusive Legislative List relate only to the matters clearly enumerated in paragraphs (a)-(f) of Item 61 and these relate to international and inter states trade and commerce.

(b)
Sales Tax being intra state trade and commerce is not withinFederal legislative competence.

(c)
Sales Tax having been omitted from the legislative lists is residual to the States who have sole legislative competence.”

The relief sought in this Court is:

“To set aside the said judgment of the Federal Court of Appeal and substitute an order answering the questions referred to the Federal Court of

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Appeal as follows:-

QUESTION 1: The power to legislate on all fiscal subjects have not been vested in the Federal Government. The omission of items38 of the 1960 and 1963 Exclusive Legislative List in the1979 Constitution shows an intention to regard Sales Tax asa residual subject.

QUESTION 2: No.

QUESTION 3. No.

QUESTION 4: Yes.

QUESTION 5: Yes.

As the appeal raised very important constitutional issues concerning the Federal and States’ taxing powers, we invited all the Attorneys-General in the Federation as amici curiae to file briefs of argument on the issues and to appear for oral argument at the hearing. The Attorney-General of theFederation and the Attorneys-General of ten States responded to the invitation. In the line-up for the legal battle, nine Attorneys-General or their representatives namely of the Benue, Cross River, Gongola, Kaduna, Lagos, Ondo, Kwara, Plateau and Rivers States, joined issue on the side of the Appellant. The Attorney-General of the Federation and the Attorney-General of Oyo State pitched their tents on the side of the Respondents. In parenthesis, I should like to express my appreciation for the assistance given to the Court by learned counsel for the parties and learned amici curiae.From the divergent and varied views expressed in their submissions, it is;manifest that they had put a lot of industry and learning in the presentation of their respective cases. The totality of their effort is highly commendable.

I think, it is pertinent to start with the 1st Question on reference to theCourt of Appeal which for convenience sake may be repeated. The Question is:

“(1) Whether the omission to include item 38 of the 1960 and 1963Exclusive Legislative List in the 1979 Constitution shows an intention to regard the Sales Tax Law as a residual subject or whether the power to Legislate on all fiscal subjects have been vested in the Federal Government.”

One may observe that the Question has two limbs. The first limb is specific, i.e. whether sale tax is a residuary matter. The second limb, as to whether the power to legislate on all fiscal subjects have been vested in theFederal Government, is too wide and it smells as an academic question which a court would refrain to answer on reference. The word “fiscal” is defined by the Oxford Universal Dictionary as “of or pertaining to the treasury of a state; of or pertaining to financial matters.” The second limb of theQuestion should therefore be limited to the context of the facts and circumstances of the case on appeal.

In his lead judgment, Omo J.C. A. stated his reasons for his answers to both limbs of the Question in these words:

“It has been submitted by the defendant, that the effect of the omission of Item 38 on the exclusive list of the I960 and 1963 Constitutions from the 1979 Constitution, is to make the subject-matter of sales tax therein given to the States, a residual matter on which they can legislate. The arguments in support of this submission

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had been set out in detail earlier I must reject this sub-mission and prefer that of the learned Federal Attorney-General that the power to legislate on same remains with the FederalGovernment. This must be so because in my view the subject-matter of sales tax does in fact fit into that contemplated in Item15 (as I have just found), possibly (sic) item 58, and most certainly item 61 of the Exclusive Legislative List. There is therefore no vacuum which will make the subject-matter residual. Rather it has been provided for elsewhere in the Constitution.”

“In my view the plain effect of the phrase “in particular” as set out in Item 61 is one of emphasis and not limitation. It unequivocally means that the “trade and commerce” without any limitation is the exclusive legislative province of the FederalGovernment. Again, Professor Nwabueze puts it as follows:”

“But the context of the trade and commerce provision in theNigerian Constitution really puts it beyond question that the Federal power over the matter extends to trade and commerce (as defined) within each state The particularisation of international and interstate trade and commerce shows that,the power is not limited to it but extends also to trade and commerce within each state.”

The conclusion that this must be the intention of Item 61 is also buttressed by the effect of the provisions of sections 4,16,40(3) and paragraph F of the Third Schedule as submitted earlier by the Federal Attorney-General, to wit, that the economic control ‘of the Federal Government is fairly comprehensive. I also accept his submission that with the control of trade and commerce goes the inherent right of taxation on that item.

Since the sale of products within the state (intra-state) or into the state(inter-state) is “trade and commerce,” the imposition of tax on such trade is therefore within the exclusive purview of the Federal Government. The Ogun State Sales Tax Law which imposes tax on such trade is therefore ultra vires null and void.”

Chief Adaramaja, learned counsel for the Appellant, submitted that the Court of Appeal was wrong in its interpretation of the provisions of item61 in holding that all aspects of trade and commerce are exclusive to the Federation and a State has no power whatever over trade and commerce, he said the Constitution does not intend the Federal Government to concern itself with petty matters, such as control of street trading, regulation and collection of market fees, licensing of beer parlours, control of advertising etc.which are the responsibilities of a State or a local Government. For this reason, counsel contended, item 61 should be construed as to limit the exclusive powers of the Federation therein to the matters specifically listed in paragraphs (a) to (f) inclusive. The words “in particular” are words of limitation and not of particularisation. Since the Constitution makes no specific provision for Sales Taxing Power, it was intended to be a residuary matter which is within the competence of a State.

However, learned counsel conceded that because of the Price ControlBoard Act 1977 (which is an existing law by virtue of section 274 of the Constitution) as amended by Price Commodities Orders, L.N. 21 and 22 of 1979,

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the Law in question is void in so far as it imposes sales tax on petroleum pro-ducts because of the exclusive Federal power to control prices under item 61(c). He said the schedule to the Law was amended to exclude petroleum products but he did not produce the amendment Law.

   I have earlier indicated that Attorneys-General of nine States associated themselves with the submission of Chief Adaramaja. In order to avoid repetition I would only refer the submissions of those Attorneys-General who amplified Chief Adaramaja's contention. The Attorney-General of Benue State contended that the only matters that are within the exclusive taxing powers of the Federation are matters of customs and excise (item 15),export duties (item 22) stamp duties (item 57), trade and commerce (item 61), taxation of incomes, profits and capital gains (item D of the ConcurrentList). From the purview of the whole Constitution, he said. States are perfectly entitled to regulate the carrying on of any business or trades within their boundaries or even if they think fit, to prohibit particular trade - such as the sale and consumption of alcohol. He stated that if the converse were true, then all the existing States Ministries of Trade and commerce would be illegal. He concluded that Sales tax is a residual matter within the legislative competence of the States. He relied on Uwaifo v. Attorney-General Bendel (1982) 7 S.C. 124 at 184 Rabin v. State (1980) 8-11 S.C. 130 at 195 and Awolowo v. Shagari (1979) 6-9 S.C. 51 at pages 66-68.

While endorsing the views that by the omission of sales tax in the Exclusive and Concurrent Lists sales tax was intended to be a residuary matter and that items 61 should be given a restrictive meaning, the Attorney-General of the Cross River State pointed out other areas of trade and commerce which were specifically conferred on the Federal Government. He mentionedBanks and Banking (item 6). Commercial and Industrial Monopolies (item 11 incorporation of companies (item 31) insurance (item 32) and many others. It appears, according to his contention, that the makers of the Constitution specifically set out those matters on which they intended the Federal Government to have legislative rights, and left the rest open to theStates; and sales tax is one of the matters left out.

In his submission, the Attorney-General of the Rivers State raised the very important question as to whether the States have any power at all to enact sales tax on matters which are not exclusively reserved to the Federation. He submitted that if sales tax on whatever matter is an excise duty as has been held by the Court of Appeal, then it would be wrong to say that sales tax falls under items 58 and 61 when excise duty is expressly confined to item15. He further submitted that if the words “trade and commerce” in item 61 were intended to cover all aspects and ramifications of trade and commerce to be within the Exclusive List then it would not have been necessary to make any of the other provisions in the Exclusive List which are connected with trade and commerce.

Chief Williams prefaced his response by stating that since the matters,under reference depended on the scope of certain items in the ExclusiveLegislative List, the Court should read the List as a whole with section 4(2) of the Constitution. He pin-pointed the words “with respect to” in the sub-section which he said refer to the width and generality of the items in theList. He referred to The State of New South Wales v. The Commonwealth

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(1909) C.L.R. 179 at 186; Navindra v. Commissioner of Income Tax (1955)A.I.R. (S.C.) 58 at 61; Sing v. The State of Uttar Pradesh (1962) A.I.R. 1563 and 1568 and Dass v. Wealth Tax Officer (1965) A.T.R. 1387 at 1389 where in the significance of the phrase “with respect to” was severally considered.Learned counsel urged us to interprete broadly the scope of the Federal powers in the Exclusive List in accordance with the principle stated in Rabiu v. The State (1982) 2 N.C.L.R. 293 at 326.

Referring to item 61, Chief Williams submitted that “trade and commence” are not restricted to sub-items (a) to (f) therein which are not exhaustive. He urged us to hold, as the Court of Appeal had done, that the words “in particular” are words of emphasis and not of limitation. He said item 61 covers all aspect of trade and commerce and, consequently, a State has no power to regulate trade or make sales tax law. With regard to the 1960 and 1963 Constitutions which conferred general legislative power on theFederal government and limited power on the Regions to make sales tax law,learned counsel contended that power has been taken away from the States by the present Constitution and the provisions of the former Constitution cannot be imported into the present Constitution.

While relying on Clampham v. National Insurance Board (1961) 2 Q.R602, Maxwell on Interpretation of Statutes 12th Edition P. 64 and in ReAviation Engineering limited (1963) Ch. 24 at 37 in support of the view that the present Constitution must be interpreted independently of the previousConstitutions and that upon the correct interpretation of the present Constitution a State has no power whatever over “trade and commerce” or to make sales tax law, the learned Attorney-General of the Federation advanced a very powerful alternative submission. He contended that even if the Federal “trade and commerce” power under item 61 is limited to the matters set out in sub-items (a) to (f) therein, the Sales Tax Law of Ogun State is unconstitutional and void because it infringes the provision of “trade and commerce between the States” of item 61(a). He submitted that theFederal Government having been given the power to regulate inter-State trade and commerce by item 61(a), any State law having the possibility of interfering with trade and commerce between the States is null and void.

    The Constitution does not allow a State to impair the freedom of inter-State trade, and commerce by means of its taxing power. Reliance was placed onFox v. Robbins (1909) 8 C.L.R. 115; Associated Steamships city Ltd. v. Western Australia (1969) 120 C.L.R. 92; Western Live Stock v. Bureau ofRevenue (1939) 303 U.S. 250 at 255 and Joseph v. Carter (1947) 330 U.S. 422 at 429.

Now, from a simplistic approach to the solution of the issue, iris very tempting to accept the view that since the 1960 and 1963 constitutions specifically shared the power to make sales tax law between the Federation and the Regions and since that power is omitted in the Exclusive and ConcurrentLists of the present Constitution, then there is a presumption that sales taxis left as a residuary matter to the States. It is also equally appealing to agree with the contrary view that since trade and commerce under item 61 are exclusively reserved for the Federation and that since by its very nature, sales tax is an incident of trade and commerce, then it follows that sales tax is an incidental matter within the exclusive power to the Federation under item

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  1. As attractive as both views appear to be, neither can withstand the test of the principle for the construction of the constitution stated in Adesanya v. President of Nigeria (1981) 5 S.C. 112, to wit, that all its provisions relating to an issue must be read together and not disjointly.

It follows from the foregoing that for the correct determination of the issue, all the provisions of the Constitution which have bearing on the taxing power and trade and commerce power of the Federation should be read together with those provisions relating to the taxing power and trade and commerce power (if any) of the States.

By virtue of section 4, section 150 and item D of Part II of the Second Schedule to the constitution the Federation has the power to impose tax on any of the matters in the Exclusive and Concurrent lists. Similarly, pursuant to section 4 and item D9 of Part II of the Second Schedule, which provides:

“9. A House of Assembly may, subject to such conditions as it may prescribe, make provisions for the collection of any tax, fee or rate ,”

a State has the power to impose tax on all matters in the Concurrent List and residuary matters. However, it must be noted that the taxing power of a State over the concurrent matters is subject to the rule of inconsistency under section 4(5) and the doctrine of covering the field, which I have stated at the beginning of this judgment.

It is axiomatic that in the absence of any constitutional provision,express or implied, to the contrary the respective taxing power of the Federation and of a State includes sales taxing power. Accordingly, the Federation is entitled to levy sale tax on any saleable matters within its competence. A state can also do the same within its competence. It must, however, be emphasized that it is not within the competence of a State:

(1)
to make sales tax law affecting any of the matters in the Exclusive Legislative List; or

(2)
to make any sales tax law in the Concurrent Legislative List which is inconsistent with any law validly made by the Federation; or

(3)
to make any sales tax law in the Concurrent Legislative List on any matter in the Concurrent List where any law validly made by the Federation has covered the field.

It is in pursuance of the above stated constitutional law that several States in the Federation enacted Sales Tax Laws. Although the validity of the Ogun State Sales Tax Law is the only question in issue on this appeal, the validity of all the Sales Tax Laws of the other States are indirectly involved because of the proposition that sales tax is a matter within item 61. This brings me to the examination of item 61, which reads:-

  1. Trade and commerce, and in particular –

(a)
trade and commerce between Nigeria and other countries including import of commodities into and export of commodities from Nigeria, and trade and commerce between the States;

(b)
establishment of a purchasing authority with power to acquire for export or sale in world markets such agricultural produce as may be designated by the National Assembly;

(c)
inspection of produce to be exported from Nigeria and the

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enforcement of grades and standard of quality in respect of produce so inspected;

(d)
establishment of a body to prescribe and enforce standards of goods and commodities offered for sale;

(e)
control of the prices of goods and commodities designated by the National Assembly as essential goods or commodities, and

(f) registration of business names. “

It is common ground that the scope of item 61 depends on the meaning of the words “in particular” within the context therein. It is also conceded by all counsel that the words are capable of two meanings. The dispute revolves on which meaning should be preferred.

I think, for the correct resolution of the dispute, I consider it pertinent to reiterate the general principles for the interpretation of our Constitution which I stated in Ifezue v. Mbadugha (1984) 5 S.C. 79 at 101 in these terms:

“The fundamental principles is that such interpretation as would serve the interest of the constitution and would best carry out its object and purpose should be preferred. To achieve this goal, its relevant provisions must be read together and not disjointly; where the words of any section are clear and unambiguous, they must be given their ordinary meaning unless this would lead to absurdity or be in conflict with other provisions of the Constitution and effect must be given to those provisions without any recourse to any other consideration; and where the constitution has used an expression in the wider or in the narrower sense the court should always lean where the justice of the case so demands to the broader interpretation unless there is something in the content or rest of the constitution to indicate that the narrower interpretation will best carry out its object and purpose. In other words, where the provisions of the. Constitution are capable of two meanings the court must choose the meaning that would give force and effect to the Constitution and promote its purpose.”

In deciding that the words “in particular” are words of emphasis, the Court of Appeal heavily relied on the fundamental objective and directive principle of State policy under section 16 of the constitution which directs the Federation to control the national economy in such manner as to ensure maximum welfare, freedom and happiness of every citizen. But the Court of Appeal did not advert its mind to item H 18 of Part II of the secondSchedule, which reads:

“18. Subject to the provisions of this Constitution a House ofAssembly may make laws for that State with respect to industrial, commercial or agricultural development of the State.”(Italics mine)

Furthermore, the Court of Appeal did not consider at all the provisions of section 7(3) of the Constitution, which says:

“(3) It shall be the duty of a local government council within theState to participate in economic planning and development of the area referred to in subsection (2) of this section and to this end an economic planning board shall be established by a Law enacted

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by the House of Assembly of the State.” (Italics mine)

It is clear from the foregoing that the control of the economy is not within the exclusive power of the Federation. Each government (Federal,State and Local) has a share in the control. While the constitution requires the Federation to control the national economy, it also empowers the State to participate in the development of the economy within the State and a

Local Government in the development of the economy within its area of jurisdiction. It is therefore wrong for the Court of Appeal to conclude that because section 16 obliges the Federal Government to control the national economy and since trade and commerce is an integral part of the national economy, the words “in particular” are words of emphasis and, accordingly as it held a State has no power to regulate any aspect of trade and commerce.With all due respect, this conclusion is inconsistent with the provisions of item H 18 of Part II of the Second Schedule and section 7(3) of the Constitution.

Again, the court of Appeal did not advert to section 7(1) which provides:

“7(1) The system of local government by democratically elected local government councils is under this Constitution guaranteed;and accordingly, the Government of every State shall ensure their existence under a Law which provides for the establishment, structure, composition, finance and functions of such councils.” (italics mine)

Section 7(5) states that the functions to be conferred shall include those set out in the Fourth Schedule to the constitution. The functions set out therein include control and regulation of outdoor advertising and hoarding, control and regulation of shops, kiosks, restaurants and other places for sale of food to the public, laundries and the development of agriculture and natural resources. These functions, in my view, are invariably matters relating to trade and commerce. That being the case, the Constitution having specifically empowered a State to confer trade and commerce power on its Local Governments, it must be inferred that the Constitution reserves some trade and commerce power to a State. Otherwise, it would be ridiculous for theConstitution to oblige a State to give what it does not possess.

For the above reasons, having regard to all the relevant provisions of the Constitution, I am of the firm view, that the Constitution does not confer on the Federation exclusive power over trade and commerce in item 61. I hold that all the Governments (Federal, State and Local) have been accorded their respective shares to control trade and commerce. Accordingly, I would construe the words “in particular” in item 61 to be words of limitation and that the trade and commerce power of the Federation is limited to the sub-items (a) to (f) therein. For the avoidance of any doubt, I may emphasize that the Federal Government had power to make law on the items specified in sub-items (a) to (f). In this respect international trade and commerce and inter-State trade and commerce are specifically reserved for the Federation. While trade and commerce within a State is left as a residuary matter to the States.

Accordingly, I would not invalidate the Sales Tax Law of Ogun State by reason of the proposition that, having regard to the generality of item 61, a State has no power at all over trade and commerce. I reject the proposition

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because it has no constitutional basis.

I shall now deal with the narrow question as to whether the Law is contrary to section 4(3) of the Constitution in that it purports to impose sales taxon inter-State commerce. The provisions of subsection (3) are clear that, save as otherwise provided by the Constitution, a State has no power over inter-State commerce. However, because of the saving clause of the subsection, the whole of item H of Part II to the Second Schedule is pertinent and is hereby set out:

“17. The National Assembly may make laws for the Federation or any part thereof with respect to –

(a)
the health, safety and welfare of persons employed to work in factories, offices or other premises or in inter-State transportation and commerce including the training, supervision and qualification of such persons;

(b)
the regulation of ownership and control of business enterprises throughout the Federation for the purpose of promoting,encouraging or facilitating such ownership and control by citizens of Nigeria;

(c)
the establishment of research centres for agricultural studies;and

(d)
the establishment of institutions and bodies for the promotion or financing of industrial, commercial or agricultural projects.

18.
Subject to the provisions of this Constitution a House of Assembly may make Laws for that State with respect to industrial, commercial or agricultural development of the State. (Italics mine)

19.
Nothing in the foregoing paragraphs of this item shall be construed as precluding a House of Assembly from making Laws with respect to any of the matters referred to in the foregoing paragraphs.”

I have already considered the scope of Item H 18 as enabling a State to regulate trade and commerce within its borders. I do not think the law making power conferred on a State by item H 19 in respect of the matters specified in item H 17(a) to (d), which includes inter-State commerce, can reasonably be construed so as to include the power to tax products of inter-state commerce as such.

In the interpretation of the inter-State commerce clause of the Constitution of the United States, the Supreme Court has consistently held the taxing of goods coming from other States as such to be unconstitutional because such tax is a regulation of inter-State commerce and to leave theStates free to tax inter-State commerce would result to intolerable discriminations and unneighbourly regulations: Nippert v. City of Richmond 327 U.S. 416; Carter v. Clark 67 S.Ct. 815. In Brown v. Houston 114 U.S. 611 at 630 the Court had this to say:

“No State has power to make any law or regulation which will affect the free and unrestricted intercourse and trade between the States, or which will impose any discriminating burden or tax upon the citizens or products of other States coming or brought within its jurisdiction.”

However, the Court upheld the validity of the State tax law in that case

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because the particular product of inter-State commerce that had been brought into the State had intermingled with the local products and the tax was imposed on both the inter-State product and the local products. It was not a discriminating tax.

The High Court of Australia took similar stance in the interpretation of section 92 of their Constitution which guaranteed freedom of inter-State trade and commerce. Thus in Fox v. Robbins (1909) 8 C.L.R. 115 the Court declared unconstitutional a State licensing law which imposes higher fee for the sale of wine brought into the State than the fee for the sale of local wine.

Unlike our Constitution, the Constitution of the United States did not specifically prohibit a State from making laws which would interfere with the freedom of inter-State commerce. The guarantee was secured by judicial interpretation. Our Constitution is specific. In clear terms section 4(3) prohibited the States from making laws with respect to any matter in the Exclusive List, which includes inter-State trade and commerce.

Now, section 3(1) of the Law imposes sales tax on products brought into Ogun State. The products are petrol, diesel oil, petroleum products, beer and alcoholic spirits, tobacco and paints. Since the sales tax is only chargeable on the products brought into the State and because the products can only be brought into Ogun State from another State or from outside Nigeria, it follows that the tax is a discriminating tax directed against inter-State or international trade and commerce which are within the exclusive regulatory power of the Federation under item 61(a). Accordingly, I hold that in so far as the Law purports to impose sales tax on taxable products brought into the State, it offends the provision of inter-State or international trade and commerce and contravenes section 4(3) of the Constitution. I declare the law unconstitutional to that extent.

Furthermore, item 61(e) empowers the Federation to control the prices of goods and commodities. Under the Price Control Act 1977 and the Price Control Commodities Order 22 of 1979, the Federal Government has controlled the prices of petrol, diesel oil and petroleum products. I have earlier shown that the Act and the Order are existing laws. Since the sales tax is intended to be paid by the consumer, it tantamounts to an increase – in my view in the prices of the taxable products, namely petrol, diesel oil and petroleum the prices of which have been controlled by the Federal Government. That being the case, I hold the sales tax to be inconsistent with the Price Control Act and the Order made thereunder. Consequently, the sales tax on petrol, diesel oil and other petroleum products is unconstitutional, null and void. I do not treat beer as a controlled commodity because under Order No. L.N. 21 of 1979 it has been approved as a commodity subject to the resale price maintenance agreement between the manufacturer and the seller. There is no evidence of such agreement in the record of appeal. So it is with tobacco.

Having regard to the foregoing, I may summarise that the Federation has implied exclusive power to make sales tax law in all matters Within the Exclusive and Concurrent Lists while the States have implied or residuary power to enact sales tax law on all matters outside the said Lists. The Answer to the first limb of question is therefore partly No and partly Yes.

I have already shown that the second limb of Question 1 is too wide and

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is misconceived. The Answer to it is an obvious emphatic No. If all the powers to legislate on all fiscal subjects, as the Question suggests, have been vested in the Federal Government then none of our States would survive for one day because none would have a budget and Appropriation Law having regard to the dictionary meaning of the word “fiscal” I have earlier on indicated.

In my consideration of Question 1, I have also covered all the issues relating to Question 3.1, accordingly, answer Question 3 as follows:

In so far as the Sales Tax Law purports to impose sales tax on the taxable products, it is an exercise of power with respect to inter-State or international trade and commerce in item 61(a) of the Exclusive List. The Answer to the Question is therefore Yes to this extent.

Now, Question 2 on reference (which is whether the sales tax is an excise duty) together with its subsidiary Question 4 may now be considered.

While dealing with Question 2, after he had extensively considered the decisions in the Australian and Canadian cases cited by counsel in support of their submissions, Omo, J.C.A. answered Question 2 as follows:

"I am persuaded by the submission that the definition of "excise" as shown by the authorities considered above, are applicable to the definition of the same word in Item 15 on the exclusive legislative list of our 1979 Constitution.

        Applying the authorities set out above to the Ogun State Tax Law,there is no doubt that it is a tax on the sale and distribution of goods by a"wholesalers." "Wholesaler" is defined in section 2 of the Act as meaning:-

“and person in the state whether he is a manufacturer or not of the goods who sells a taxable product to a person who carried on a business of selling goods of that class again.” (Italics mine)

By this definition a mere retailer appears to be exempted. It is without doubt a tax on the product itself, not merely on the consumption thereof. It provides for the registration of the business premises of the wholesaler and prescribed a penalty for failure to comply with the various provisions of the Act as to registration, payment of tax, keeping of records etc. In my view the arm of the Act (Law), which provides for the taxation of all taxable products brought into the state, is an imposition of excise tax within the meaning of Item 15 of the exclusive legislative list of the 1979 Constitution. It is therefore to that extent ultra vires the Ogun State House of Assembly and must accordingly be adjudged null and void.”

In challenging the decision of the Court of Appeal that the sales tax is an excise duty as being an error in law, Chief Adaramaja contended that in the Nigerian context “excise duty” is a tax imposed on production of goods at the place of production and the tax is paid by the producer before the entry of the goods into the market and that excise duty is not imposed on distribution. On the other hand, according to learned counsel, a sales tax is a tax imposed on a consumer at the time of the sale of the goods and the fact that a wholesaler is appointed as a collecting agent would not affect the

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character of the sale tax. He relied on Atlantic Smoke Shop Ltd. v. Conlon (1943) A.C. 550 at 561 and Dickenson Arcade Ply Ltd. v. The State of Tasmania & Anor. (1974) 13 C.L.R. 177 to buttress his contention. He said theOxford English Dictionary meaning of “excise” and the one ascribed to it by the Canadian cases are too wide for our purpose. He urged us to hold that the tax in question is not an excise duty.

In his contribution, the Legal Draftsman for Kaduna State referred to Governor-General v. Madras (1945) A.I.R. (P.C.) 98 and contended that in deciding whether a tax is an excise duty or a sales tax, two tests should be applied i.e. (1) when is the tax due and

(2)
who is liable to pay the tax.

Applying the tests, he concluded that an excise duty is due for payment at the place of manufacturing and is paid by the manufacturer who must pay whether he sold the goods or not; that sales tax is due for payment at the point of sale and the consumer pays. Since the Law of Ogun State clearly shows that the sales tax is payable by the consumer, it is not an excise duty.

Referring to the definition of “excise” in Mozley and Whiteleys LawDictionary 8th Edition, Jowitt’s Dictionary of English Law 2nd Edition and Stroud’s Judicial Dictionary, the Attorney-General of Lagos State submit-ted that the dictionary meanings of the word are conflicting and do not meet the Nigeria context. She also stated that the Australian decisions, on which the Court of Appeal relied were based on the interpretation of section 90and the. transitional provision of section 93 of the Australian Constitution which reflected the history of customs and excise duty in that country. She submitted that no decision of an Australian court can do justice to the word in the context of the Nigerian situation. The learned Attorney then proceeded to evolve her own definition within the Nigerian context as follows:Excise “is a duty or tax payable on an article or commodity produced locally within the country.” Applying her definition of “excise” and the definition of “sale tax” in Chambers Twentieth Century Dictionary to the Law of Ogun State, she asked us to hold that the Law is intra vires the House of Assembly of Ogun State.

While responding, Chief Williams urged the Court to adopt the OxfordEnglish Dictionary meaning of “excise” as “a duty charged on home goods either in the process of their manufacture or before their sale to home consumers.” He indicated that for practical reasons, it is obviously easiest and most effective to collect the duty immediately on their production and before distribution to wholesalers, distributors, retailers or ultimate consumers. It was the convenience of the collection of excise duty at the point of production, according to learned counsel, that led to the erroneous impression that “excise duty” is limited only to duty imposed on goods at the point of their production in the factory. Referring to Tobacco CigarettesExcise Duty Ordinance No. 23 of 1933, the Excise Ordinance Cap 65 Laws of the Federation 1948, the Customs and Excise Management Act No. 55 of1958, Customs Tariff Act 1965, the. General Excise Regulations No. 55 of 1958, Excise (Control and Distillation) Act 1964 and the Customs andExcise Management (Amendment) Act, 1960, learned counsel submitted that the excise laws in Nigeria demonstrate that “excise duty” is simply and purely a tax on manufactured goods and its collection at the point of manufacture

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is purely a matter arising from practical considerations of effective collection.

Chief Williams further contended that, because of our common law heritage, the interpretation given to the word “excise” in the Australian andAmerican Constitutions will be of persuasive authority in the interpretation of our Constitution. For this reason, he relied on the interpretation given to the word “excise” in Australian decisions such as Matthews V; Chicory Marketing Board 60 C.L.R. 263 (especially per Dixon J., at p. 293 gave a history of the expression in English Law), Parton v. Milk Board 80 C.L.R. 229 per Dixon at 259-260, Western Australia v. Chamberlain Industries Property Ltd. 121 C.L.R. 1 at 12-13 and 15-17 and Dickinson’s Arcade Pty. Ltd v. Tasmania (supra). Citing Black’s Law Dictionary, learned counsel said the meaning of “excise” is much wider in America.

Finally, he urged us to confirm the Answers given to the Questions by the Court of Appeal.

On his journey to discover the meaning of “customs and excise” in item15, the Attorney-General of the Federation referred to several dictionaries and judicial decisions in Attorney-General for British Columbia v. Kingcome Navigation Co. (1934) A.C. 45 at 50, Attorney-General, British Columbia v. Macdonald etc. Co. (1930) A.C. 357, Matthews v. Chicory Marketing Board (1949) 80 C.L.R. and Brown v. Maryland 12 Wheat 419 and submitted that by going through all the meanings of “customs and excise” so far preferred it will be found that “customs” or “excise” are taxes imposed either on imported goods or goods manufactured locally. He further contended that as the Sales Tax Law of Ogun State imposes tax on goods either imported into Nigeria or manufactured in Nigeria and brought into Ogun State, the Law comes within “customs and excise” in item 15 and it is ultra vires the House of Assembly of Ogun State. He concluded that the argument that the sales tax is paid when the goods are sold while customs duties are paid when the goods are imported or exported or the excise duty is paid when the goods are manufactured is only a distinction without a difference. It does not matter what stage the tax is paid because once it is a tax on goods, it qualified either as customs or excise.

I am in full agreement with the unanimous submission of counsel that the word “excise” within the context of item 15 is not defined in the Constitution nor in the Interpretation Act 1964 which, by virtue of section 277(4) of the Constitution, applied for the purposes of interpreting its provisions. Consequently, it falls on the court to determine the constitutional meaning of the word. For guidance, the Court may refer to dictionaries and judicial decisions in other jurisdictions to see the meaning of the word. In this respect, the dictum of Lord Coleridge in R. v. Peters (1886) 16 Q.B.D. 636 at 641, cited by the Attorney-General of the Federation, is apt. He said:

“I am quite aware that dictionaries are not to be taken as authoritative exponents of the meaning of words used in Acts ofParliament, but it is a well-known rule of Court of law that words should be taken to be used in their ordinary sense, and we are therefore sent for instruction to these books.”

Now, let us see the dictionary meanings of “excise”.

The Oxford English Dictionary defines it as:

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“A duty charged on home goods, either in the process of their manufacture or before their sale to home consumers.”

While the Chambers Twentieth Century Dictionary defines it as “A tax on certain home commodities and on licences for certain trades”, the OxfordAdvanced Learner’s Dictionary of Current English defines it as “Government tax on certain goods manufactured, sold or used within a country.”

Yet, Jowitt's Dictionary of English Law defines it as "a duty on certain commodities charged in most cases on the manufacturer." In the Stroud's Judicial Dictionary it is defined as "duties charged on articles or com-modifies produced or manufactured in the United Kingdom."

The definition in Mozley and Whiteleys Law Dictionary is wider. It defines “excise” as:

“a name formerly confined to the imposition upon beer, ale,cider and other commodities manufactured within the realm being charged sometimes upon the consumption of the commodity but more frequently upon the sale of it, under recent acts ofParliament, however, many other impositions have been classed under excise, such is the case with regard to the licence which must be taken out by every one who keeps a dog, uses a gun ordeals in game.”

Again, in America, Black’s Law Dictionary defines it thus:

“Tax laid on manufacture, sale or consumption of commodities or upon licences to pursue certain occupations or upon corporate privileges. In current usage the term has been extended to include various licence fees and practically every internal revenue tax except the income tax.”

I shall now consider summarily the judicial interpretations given to the word “excise” under the Constitution of some of the common law countries.

In Commonwealth & Anor. v. South Australia (1926) 38 C.L.R. 408, the High Court, sitting as a full court of seven, Duffy J. dissenting, invalidated the State Law which imposed a tax of three pence per gallon on the first sale of petrol refined in the State. The Court was of the view that because the tax was calculated by reference to the quality of petrol refined and the tax was payable by the first seller, who, was the producer, the tax was an excise. I think the dictum of Isaacs J. in that case on the question whether”excise duties” within the meaning of section 90 of the Australian Constitution should be construed as widely as the law regards it in England is very material to the case in hand. He said:

“The question as to this limb is whether the tax is an “excise duty”within the meaning of section 90 of the Constitution. The Court was asked by the plaintiffs to say that the view expressed as to the meaning of that phrase in Peterswald v. Barley (4) was too narrow, and that the expression “excise duties” should be construed as widely as the law regards it in England. If that were acceded to the term “excise duties” would embrace such things as a dog tax a vehicle tax, a hawker’s licences tax, a tax for publicans’ licences or wine licences or pawnbrokers’ licences. All these come with in the recognized range of excise duties as defined by English legislation, although some are licences merely. The concatenation of

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the three branches of finance, customs, excise and bounties (not mining), in the Australian Constitution, their evident inter-dependence and mutual action and reaction, would lead me to the clear conclusion, even if it were res nova, that the words “excise duties” are not used in the Constitution in the extended sense suggested. I arrive at that conclusion notwithstanding the expression was in Australia before Federation, as in Victoria, some-times used in sense large enough to include, brewers’ and wine licences.

Licences to sell liquor or other articles may well come within an excise duty law, if they are so connected with the production of the article sold or are otherwise so imposed as in effect to be a method of taxing the production of the article. But if in fact unconnected with production and imposed merely with respect to the sale of the goods as existing articles of trade and commerce, independently of the fact of their local production, a licence or tax on the sale appears to me to fall into a classification of governmental power outside the true content of the words “excise duties” as used in the Constitution. Such taxing regulations are, in my opinion, not “withdrawn” from the States, however they might stand in presence of relevant Commonwealth legislation respecting foreign or inter-State trade. I agree with the reasoning in Peterswald v. Bartley (1). Therefore, if the taxation by the State Act under section 4 were simply on motor spirit as an existing substance in South Australia and not subject to any foreign or inter-State operation of trade or commerce, it would not be open to the challenge here made. That, however, is not the nature of the legislation.”

Again, in Matthews v. Chicory Marketing Board (Vic.) (1938) 60C.L.R. 263 where the State of Victoria imposed a tax of 拢1.64 for every half acre of chicory planted, it was held by a majority of three to two that the tax was an excise. In that case at page 303, Dixon J. stated the primary meaning of the word “excise” as follows:

“The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities.”

Thereafter, he proceeded to advance a wider definition at page 304 in these terms:

“To be an excise the tax must be levied ‘upon goods’, but those apparently simple words permit of much flexibility in application. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce.”

The decision in Parton v. Milk Board (Vic.) (1949) 80 C.L.R. 229 was concerned with a levy of 1/8 penny per gallon imposed by a Law of the State of Victoria on distributors of milk. The levy was not imposed on the producers nor on the owners of milk shops who sold to the consumers. The HighCourt by a majority of three to two held the levy to be an excise within the

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meaning of section 90 of their Constitution by reason of the fact that the levy was imposed by reference to the quantity of the production, i.e. the milk,distributed. The Court nullified the Law.

However, in Anderson’s Pty. Ltd. v. Victoria (1964) 111 C.L.R. 353, the High Court unanimously held valid the Victorian legislation which imposed a stamp duty on certain agreements, such as hire purchase agreements, wherein the amount of the stamp duty was calculated by reference to the amount of the price to be paid by instalmental payments. The Court held that the stamp duty was not an excise duty. The dictum of Kitto J. at page 373 in that case is germane to the issue before us. He said:

“It is now established, as the Court said in Bolton v. Madsen (1),that for constitutional purposes duties of excise are taxes directly related to goods (i.e. goods originating in Australia), imposed at some step in their production or distribution before they reach the hands of consumers. This does not exclude a tax imposed, as is the duty now in question, upon the final step in distribution, by which goods reach the hands of consumers. The crucial question in the case of such a tax is whether it is “directly related to goods” in the sense in which that and similar expressions, such as “upon” goods, are used in the lengthening line of judgments which have been delivered in this Court upon the subject. What is referred to may, I think, be described as a relation consisting in this, that some conduct is selected by the relevant legislation as being a step in the production, manufacture or distribution of goods and in that character is made of essence of the tax. A tax must necessarily be made payable by a person; but it is not a duty of excise unless the criterion of the person’s liability is the fact that some act of his possesses the quality of a contribution either to the physical character of goods as subjects of commerce or to the sequence of events which results in their being available, as in the hands of a consumer, to be put to their ultimate purpose. The reason is that a duty of excise is, at bottom, a burden upon home production or manufacture. Obviously it is such a burden if it is payable upon a step in production or manufacture in its character of such a step. Not so obviously but just as certainly, it is such a burden if it is payable upon a step in distribution in its character of such a step; for in that case from the time the goods come into existence the law makes it inherent in their nature, as goods requiring distribution in order to become available to fulfil their purpose, that the tax shall be paid. This is the point that Rich and Williams, JJ. made by saying in Parton v. Milk Board (Viet.) (1),that to be an excise duty a tax must be imposed “so as to be a method of taxing the production or manufacture of goods”. At whatever point before consumption a duty of excise becomes payable it must burden production or manufacture.”

The two conflicting decisions of the High Court in Dickenson’s Arcadepty. Ltd. v. Tasmania (1973-1974) 130 C.L.R. 177 were based on a very strict application of legalistic nicety. The Tasmania Tobacco Act imposed tobacco consumption tax and provided two ways for paying the tax. Under

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the first scheme, the consumer would buy the tobacco, collect it and pay his own tax after consumption. The Court upheld the validity of the Act in this respect, McTiernan J. alone dissented, as being a tax on consumption and not an excise duty. However, under the alternative scheme for payment, the consumer would pay the tax to the retailer at the time of purchase. By a majority of 4 to 2 the Court nullified the Act as being an excise duty in so far as it permitted collection of the tax by the retailer.

In parenthesis, I may observe that payment of the tax by a consumer after consumption might work in Australia but it would certainly be unrealistic in Nigeria to expect a person, who purchased a bottle of beer in Ogun State, to go to the Tax Office to pay the sales tax after he had consumed the beer.

Now, the constitutional meaning of “excise” in Australia may be summarised: it is any tax imposed at any stage “in a process of bringing goods into existence or to a consumable state, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer” per Kitto J. in Dennis Hotels Pty. Ltd. v. Victoria (1961) 104 C.L.R. 529 at 559 or if the tax is “directly related to goods imposed at some step in their production before they reach the hands of the consumer”: Bol-ton v. Madsen (1963) 110 C.L.R. 264 at 271. Since sales tax is generally payable at the time of sale, it falls within the two definitions of the word excise and the States in Australia have no power to enact sales tax law as such. However, within its constitutional power, a State has the right to impose its tax even if the tax is in some way associated with goods provided the tax is imposed on the use, consumption or ownership of goods in the hands of the final purchaser. In their attempt to settle the incessant controversy over consumption, which is the line of demarcation between the Federal and the States’ taxing powers, Australian judges have expressed conflicting and divergent views.

I have painstakingly considered these Australian cases because the Court of Appeal, wrongly for reasons which I shall state later in this judgment, relied heavily on them in declaring the sales tax under the Ogun State Law to be an “excise” within the purview of item 15.

In Canada, the dispute has always been on the question whether a particular tax is “direct taxation” which a Province has power to levy under section 92 of the British North American Act or “excise duty” which is within the competence of the Federal Government under section 122 of the Act.

In Attorney-General for British Columbia v. Murphy Lumber Co. Ltd.(1930) A.C. 357 a Provincial tax upon all timber cut in the Province was held to be an “excise” but in Attorney-General for British Columbia v. Kingcome Navigation (1934) A.G. 45 and Atlantic Smoke Shops Ltd. v. Conlon (1943) A.C. 550, the Privy Council upheld the validity as “direct tax” of Provincial Acts which imposed a tax upon every consumer of fuel oil according to the quantity which he had consumed and a sales tax imposed on the purchase of tobacco payable to a retailer by a purchaser at the time of the sale because it was a tax which was to be paid by the last purchaser of the article, and, since there was no question of further resale, the tax could not be passed on to any other person by subsequent dealing. So it was “direct taxation.” In the latter case at page 564 the Privy Council had this to say about the meaning

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of the word “excise”:

“Excise” is a word of vague and somewhat ambiguous meaning. Dr. Johnson’s famous definition in his dictionary is distinguished by acerbity rather than precision. The word is usually (though by no means always) employed to indicate a duty imposed on home manufactured articles in the course of manufacture before they reach the consumer. So regarded, an excise duty is plainly indirect. A further difficulty in the way of the precise application of the word is that many miscellaneous taxes, at any rate in this country, are classed as “excise” merely because they are for convenience collected through the machinery of the Board of Excise the tax on owning a dog for example.”

It remains to consider “excise” within the conception of Nigerian Statutes. I must emphasize, however, that a statutory provision is not an aid in the construction of the Constitution but may be a guide in discovering the intention of its framers.

The first excise law in Nigeria was the Tobacco Excise Duties Ordinance 1933 which imposed duties of excise on tobacco and cigarettes. The Ordinance did not define “excise duty” but section 6 provided that:

“Such duties as are required to be paid under this Ordinance shall be paid in the manner and at the time prescribed.”

The Ordinance was repealed and replaced by the Excise Ordinance, Cap 65 Laws of Nigeria 1948. Section 2 defined “excise duty” as “includes any duty other than an export duty of customs imposed on any goods manufactured in Nigeria.” (Italics mine). With respect to the place of payment of the duty and the person liable to pay it, sections 29, 15 and 24(1) provided:

“29. Subject to the provisions of the excise laws, it shall be lawful for the Comptroller to permit any manufacturer to remove excisable goods from his factory to a warehouse and no duty shall be payable on any such goods while in any such warehouse, save in such cases where a contrary provision shall be made by law.

  1. All goods made or deposited in any factory or warehouse without payment of duty shall upon being delivered therefrom for consumption in Nigeria or upon being used in such factory or warehouse he subject to the rate of duty in force at the time when the same are delivered or used as aforesaid save in any case where special provision shall otherwise be made by law.

24(1). The excise duty on any goods shall become due and payable to the Comptroller by the manufacturer of such goods before the same are delivered from the factory of the manufacturer or from a warehouse, if the same are goods permitted by the Comptroller to be warehoused without payment of duties thereon, or before any such goods are used by the manufacturer in his factory or in a warehouse for any purpose, or otherwise as specially provided by law:

   Provided that the Comptroller may upon the manufacturer giving such security by bond or otherwise as he may require defer the payment of duty upon such terms as he may allow."

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The Customs and Excise Management Act 1958, as amended by several Acts, repealed the former Ordinance and is an existing law within section 274 of the Constitution. The Act does not define “excise duty” but it defines”duty” as “includes any royalty or cess (sic) leviable by the Board by virtue of any enactment.” In Part IV, the Act makes comprehensive provisions for the storage of goods in warehouses and, subject to the exceptions stated therein, prohibited the removal of any goods from warehouses without payment of duty: sections 82(4) to 85. Except as otherwise permitted by theBoard of Customs and Excise, the excise duty chargeable on manufactured tobacco shall become due and payable by the tobacco manufacturer on delivery of such tobacco from the factory: section 107. Distress may be levied on the goods of a manufacturer for the payment of an excise duty: section 119.

In order to ensure that manufacturers render full account of their production for the payment of the excise duty, the Act requires them to keep books of accounts.

By the combined effect of Sections 85, 116(1) and 119A of the Act any goods unlawfully removed from a factory or a warehouse without payment of an excise duty or lawfully removed but subject to any condition imposed by the Board and the condition is thereafter contravened, then in either case the goods shall be forfeited. It appears that before the enactment of the Customs and Excise Management (Amendment) Act 1972, the Board had discretion to charge the person in whose possession the goods had been found to pay the unpaid excise duty instead of forfeiting the goods. Under section14 of the Amendment Act, forfeiture is now mandatory.

It follows from the foregoing that under the provisions of our statutes”excise duty” has always been levied on goods manufactured within the country and the tax is payable by the manufacturers before the goods are removed from the factories or warehouses. It was only on the happening of the two events, which I have shown in the foregoing paragraph, that excise duty was formerly imposed on goods that had left the factories or warehouses and had entered into the process of distribution. Such goods are now automatically forfeited. Liability for the payment of excise duty has never been imposed on distributors or retailers of manufactured goods.

What then is the constitutional meaning of “excise” in item 15? I think,the meanings given to the word by other common law countries would hardly assist in finding the answer to the question because each meaning was decided within the context of the Constitution of the country concerned.Hence there is no universal meaning of the word. Each case must be viewed through the spectacles of its constitutional perspectives.

The Parliament of England is a sovereign legislature with unlimited power to make any law imposing tax on any matter whatsoever and call it an”excise.” This has resulted in the very wide meaning of the word given to it in Mozley’s Dictionary. Such wide meaning was held to be inappropriate forAustralian situation: Commonwealth & Anor. v. South Australia (supra)and also for the Canadian one: Atlantic Smoke Shop Ltd. v. Conlon (supra). In my view, it would not meet the demand of our Constitution to put to the word “excise” the wide meaning given to it in England. Neither the Federation nor a State is sovereign in respect of the taxing power in Nigeria. As I

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have earlier shown, the Constitution has shared the taxing powers between the Federation and the States and neither should trespass over the right of the other. Accordingly, a narrow interpretation should be placed on the word “excise” in accordance with the principle stated in Rabiu v. The State(supra). For this reason the meanings of the word in Mozley’s and Black’sDictionaries are inapplicable to item 15.

As we have seen a tax paid by the consumer after consumption is a sales tax in Australia but if it is paid to a retailer as a collector by the consumer’ then it is an excise: Dicken’s Arcade v. Tasmdnia (supra). It is a sales tax inCanada if it is paid by the purchaser to a retailer but apparently it is an excise if it is paid to a distributor by a retailer who would pass it on to a consumer:Atlantic Shop v. Conlon (supra). These fine distinctions were necessitated by the construction of their Constitutions. In Australia a State has no power at all to make sales tax law while in Canada a Province has such power but the tax imposed therein must be “direct taxation.” Our Constitution is different. Under it, as I have earlier shown, a State has the power to make sales tax law and the power is not limited to “direct taxation.” So it is wrong, as the Court of Appeal has done, to rely on Australian and Canadian decisions in the interpretation of our Constitution.

Our Constitution should be interpreted in such a manner as to satisfy the susceptibilities of the Nigerian societies for whom it was made and to meet the needs of the Nigerian institutions: Senator Adesanya v. The President (supra). It would be, in my respectful view, an exhibition of the highest degree of absurdity, folly and ridicule by a State to follow the example of Australia and make Sales Tax Law which would require a person, who purchases a stick of cigarette from a hawker, to go to the State Tax Office for the purpose of paying the sales tax after he has smoked the cigarette. The State of Tasmania resorted to this device in order to evade the prohibition against the States from making sales tax law.

The Canadian precedent would also be, in my opinion, an exercise in futility in Nigeria. In the developed countries where retail trade is carried on in departmental stores, supermarkets, drug-stores and shops where all sales are accounted for and the business addresses registered, it is convenient and safe for any government to appoint retailers as its agents鈥�

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