THE COURT of Appeal in Abuja on Wednesday nullified the Federal High Court’s (FHC) judgment directing the Central Bank of Nigeria (CBN) to pay Kasmal International Services Limited N579 billion for its role in stamp duty collection.
In a majority ruling, Justice Adebukola Banjoko upheld the CBN’s argument that Kasmal lacked the legal right to have been engaged by the Nigerian Postal Service (NIPOST) in the first instance.
The case originated from an October 11, 2024, ruling by Justice Inyang Ekwo of the FHC, which ordered the CBN to pay Kasmal N579,130,698,440 in interest within a stipulated period. The court had also mandated a 10% annual interest on the judgment sum from January 1, 2015, to January 31, 2020.
Justice Ekwo had ruled that the CBN had previously paid Kasmal N10.3 billion, representing 15% of stamp duties remitted by Deposit Money Banks (DMBs) between 2015 and 2020, through a designated CBN-NIPOST account. He held that the CBN could not renege on its contractual obligations with Kasmal and NIPOST.
Kasmal’s counsel, Alex Izinyon, SAN, argued that his client was appointed by NIPOST to collect a N50 charge on receipts issued by banks for electronic transfers and teller deposits of N1,000 and above, in line with the Stamp Duties Act and the Nigerian Financial Regulations 2009.
However, the CBN and the Attorney General of the Federation (AGF) filed an appeal on October 24, 2024, contesting the lower court’s decision. Their lead counsel, Chief Niyi Akintola, SAN, argued that the judgment was erroneous, as the funds in question were public monies belonging to the Federation Account under Section 162 of the 1999 Constitution (as amended). He maintained that stamp duties should be remitted to the Federation Account for distribution among the three tiers of government.
In its ruling, the appellate court, in a 2-1 decision, held that Kasmal lacked the legal standing (locus standi) to initiate the suit or claim any entitlement. Justice Banjoko declared the suit “fundamentally defective,” setting aside the lower court’s judgment in its entirety.
She emphasized that NIPOST had no statutory authority to collect stamp duties and could not delegate such powers to Kasmal. “You cannot give what you don’t have,” she stated.
In a dissenting judgment, Justice Okong Abang disagreed with the majority, stating that the CBN and AGF, having ratified the contract and paid N10.3 billion to Kasmal, could not later disown the agreement. He cited the doctrine of unjust enrichment, arguing that the appeal lacked merit and should be dismissed.
The News Agency of Nigeria (NAN) reports that stamp duty is an indirect tax on financial transactions. Former CBN Governor Godwin Emefiele had disclosed that N370.686 billion was collected as stamp duty between 2016 and 2022.
Kasmal had approached the FHC seeking clarification on its share under its agreement with NIPOST and other relevant agencies. The appellate court’s ruling has now overturned the earlier decision in favor of the CBN and AGF. (NAN)
