FHC Refuses FIRS’ Application To Enlarge Time To Appeal Against Judgment Of TAT On The Tax Treatment Of Fees Incurred On Gas Flaring

Federal High Court Refuses FIRS’ Application To Enlarge Time To Appeal Against Judgment Of TAT On The Tax Treatment Of Fees Incurred On Gas Flaring


On 15th May 2018, in Suit No.: FHC/L/10A/2016 between FIRS v. Chevron Nigeria Limited, the Federal High Court in Lagos delivered a ruling dismissing FIRS’ application for enlargement of time to appeal against the decision of the TAT that the expenses incurred by Chevron Nigeria Limited (CNL) as gas flaring fees are tax deductible.

CNL filed the appeal at the TAT to challenge a tax assessment issued by FIRS disallowing its treatment of expenses incurred as gas flaring fees on the ground that same amounted to penalty because no written permission of the Minister of Petroleum Resources was obtained prior to the flaring of the gas in accordance with the Associated Gas Re-injection Act. FIRS did not appeal against the judgment within the time provided for under applicable laws and thus brought an application to enlarge time within which to appeal. While the Notice of Appeal was filed over six months after the judgment was delivered, the Notice of Appeal and the application for enlargement of time were served on CNL close to two years after the judgment of the TAT.

Position Of The Parties

The reasons advanced by FIRS for its failure to appeal within the 30 days limited by law are as follows:

  • It did not have a substantive Executive Chairman and Director of Legal Services Department at the time Judgment was delivered;
  • FIRS was reviewing all its cases with a view to determining which to resolve and proceed with; and
  • It could not get a copy of the Judgment on time.

In opposing the application, CNL contradicted FIRS’ positions as follows:

  • The Executive Chairman of FIRS was appointed before the TAT delivered the judgment (relying on a Guardian Newspaper publication canvassed);
  • That the substantive Director of Legal Services Department was actually appointed the same period the Judgment was delivered;
  • That within the period the office of the Director of Legal Services Department, FIRS was allegedly vacant, FIRS filed other appeals at the Federal High Court and the TAT.

Decision Of The Court

The court held that FIRS did not provide sufficient reasons why its judicial discretion should be exercised to enlarge time and thus dismissed the application.

The court by its decision has made the judgment of the TAT final and conclusive against FIRS. The implication of the above is that FIRS cannot raise any issue relating to the tax treatment of expenses incurred on gas flaring in respect of the respective year of assessment against CNL.

It is therefore advisable for a party who is dissatisfied with the decision of the TAT to act timeously by filing an appeal within 30 days set out by law and where it is unable to meet the deadline to give good and cogent reasons for failing to so do.  It should be noted that an application for enlargement of time is not granted as a matter of course.

For more information, contact:

Maxwell Ukpebor, Olumayowa Oluwole
Adebiyi Tax & Legal
House 20 Wema Terrace
Udi Street Ikoyi


+234 803 960 0520

This Legal Alert contains information on tax /legal issues. It does not constitute legal or professional advice on such issues. Where specific legal advice is needed, the services of a solicitor/tax adviser should be sought.

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