REPUBLIC VRS. VENUS OIL COMPANY LTD AND ANOTHER (CRT/03/2022) [2024] GHAHC 461 (28 October 2024)

IN THE SUPERIOR COURT OF JUDICATURE, IN THE HIGH COURT OF JUSTICE, CRIMINAL COURT 4, HELD IN ACCRA ON MONDAY, THE 28TH DAY OF OCTOBER, 2024, BEFORE HER LADYSHIP, COMFORT KWASIWOR TASIAME, JUSTICE OF THE HIGH COURT. CASE NO.: CRT/03/2022 THE REPUBLIC VRS. 1. VENUS OIL COMPANY LTD 2. MOHAMMED LAMIN ACCUSED PERSONS – A2 PRESENT AND REPRESENTS A1 __________________________________________________________ J U D G M E N T The brief facts in this case are that, Complainant is the Ghana Revenue Authority, an institution charged with the responsibility of assessing, collecting and accounting for taxes and levies as provided under the Tax Laws of Ghana. The 1st Accused person, Venus Oil Company Limited is into transportation, distribution, storage and retailing of petroleum products. The 2nd Accused person, Mohammed Lamin is the Managing Director of the 1st Accused Company. According to the GRA, a review of the tax records on petroleum products lifted by the Venus Oil Company Limited established that the company has defaulted in the payment of its tax liabilities to the tune of 1 | P age GH¢10,694,051.86. That demand notices were sent to the company to notify it of its obligation under the Tax Laws to settle the indebtedness to the state but the Accused persons have so far failed to comply. Based on the facts, the Accused persons were charged with the following offence and arraigned before the court for trial. COUNT ONE STATEMENT OF OFFENCE Failing to pay tax contrary to Section 80 of the Revenue Administration Act, 2016 (Act 915). PARTICULARS OF OFFENCE 1. Venus Oil Limited, 2. MOHAMMED LAMIN: For that you, in Madina, Accra in the Greater-Accra Region of Ghana and within the Jurisdiction of this court, the Company and the Managing Director of Venus Oil company Limited, did fail to pay to the State by the due dates the taxes and levies, namely, Special Petroleum Tax, Energy Debt Recovery Levy, Road Fund Levy and Energy Levy due on various petroleum products lifted by the company. The unpaid taxes and levies as at September, 2021 stand at GH¢10,694,051.86 BURDEN OF PROOF Article 19(2) (c) of the Constitution, 1992 requires that: “A person charged with a criminal offence shall be presumed to be innocent until he is proved or has pleaded guilty.” Proof in criminal matters is very high and the standard is beyond a reasonable doubt. It is stated in section 11(2) of the Evidence Act, 1975, NRCD 323, that: “In a criminal action, the burden of producing evidence, when it is on the prosecution as to a fact which is essential to guilt, requires the prosecution to produce sufficient evidence so that on the 2 | P age totality of the evidence a reasonable mind could find the existence of the fact beyond a reasonable doubt.” The prosecution thus has the onus to lead evidence to persuade the Court in proof of the offences with which a person is charged. It is clearly imperative for the prosecution's evidence at the close of its case, to give rise to a presumption of guilt against the accused person. Accused persons have been charged under Section 80 of the Revenue Administration Act, 2016 Act 915. Section 80 provides that “A person who fails to pay tax by the date on which the tax is payable commits an offence and is liable on summary conviction (a) where the failure relates to an amount exceeding two thousand currency points, to a fine of not less than two hundred penalty units and not more than one thousand penalty units or to a term of imprisonment of not less than three months and not more than one year or to both; and (b) in any other case to a fine of not less than fifty penalty units and not more than two hundred penalty units or to a term of imprisonment of not less than one month and not more than three months or to both. The Learned Prosecutor in his closing address submitted as follows: Section 1 of Act 899 (Energy Sector Levies Act), 2015 imposes liability on anyone who trades in petroleum products to pay tax to the state. It provides: “Section 1 – Imposition of levy There is imposed by this Act, the levies specified in the first column, at the rates and on items specified in the second column and for the purpose specified in the third column of the first schedule.” “Section 2 – Collection of levies 3 | P age 2(1) The agencies specified in 4th column of the first schedule shall collect the levies imposed under section 1. 2(2) The collection agencies specified in the 4th column of the first schedule shall within 14 days of receiving moneys under the Act pay the moneys collected into the accounts specified in the 5th column of the 1st schedule.” He submitted further that, the prescribed petroleum pricing formula under Act 899 includes: (a) Energy debt recovery levy (b) Energy fund levy (c) Road fund levy Per section 2 of Act 899 and the 1st Schedule of the Act, The Ghana Revenue Authority (GRA) is the designated agency to collect these levies as above mentioned. The Customs Division of Ghana Revenue Authority is mandated to collect all taxes imposed on petroleum products. The law is trite that, prosecution must prove ingredients/elements of the offence charged and per the charges under section 80 of Act 915 are as follows: 1. That there must be a taxpayer. 2. That person/entity must have been assessed for the payment of tax. 3. That the tax liability must have been due or the tax has become a debt. 4. That the accused has failed to pay the tax liability on the due date. Who is eligible to pay tax? Per Section 58(1) of Revenue Administration Act, 2016(Act 915) provides “Where an entity fails to pay tax on time, a person who is or has been a manager of the entity 4 | P age during the relevant time is jointly and severally liable with the entity for payment of the tax. Sub-section 1 applies irrespective of whether the entity ceases to exist. So per section 58(1) of Act 915, a manager of the entity is liable to pay tax. The next question is, who is a manager? Section 58(7) of Act 915 provides for who a manager is. It states “in this section ‘manager’ of an entity includes a person purporting to act as a manager of that entity; and The next question is what is an entity for the purposes of Tax? Section 108 defines an ‘entity’ to mean a company or other corporation, partnership, trust, government agency or, to the extent recognized as a person or taxable person by another tax law, any other entity but excludes an individual. And a “manager”, in relation to an entity to mean a Councilor, director, manager, member, officer or other person who participates or may participate, whether alone or jointly with other persons, in making senior management decisions on behalf of the entity and includes… PW1 testified that, A1 company registered as a company limited by guarantee and it is an entity liable to pay tax. He testified further that between the years 2017 and 2019, the 1st Accused lifted petroleum products and incurred a tax liability of GH¢11,731,294.13. Exhibit 4 tendered by A2 is a Certificate of Incorporation of a company by name Venus Oil Company Ltd. This company was incorporated under the Companies Act, 1963, Act 179 on 19th day of June, 2014. The Principal Activity and nature of business is Production of petroleum and marketing of petroleum products. With this information on the certificate, it is the case that, A1 is a company registered under the laws of Ghana. A1 company was also registered with GRA for the purposes of tax. 5 | P age It is the holding of this court that A1 company is entity liable to pay tax on the oil lifted and sold. According to Exhibit 4, A2, Mr. Mohammed Lamin Dawuda is the Director of the A1 company. So, within Section 108 of Act 915, the 2nd accused person who was charged together with A1 company and who testified as a Managing Director and a majority shareholder of A1 company is liable to pay tax for and on behalf of A1 company. That means the right persons are before the court for the purposes of the offence charged. CASE OF THE PROSECUTION The first Prosecution Witness (PW1) was Napoleon Simons. He is Principal Revenue Officer with the Policy Programs Unit of the Customs Division that works with the Petroleum Unit of the Ghana Revenue Authority (GRA). He testified further as follows; Between the year 2017 and 2019, the 1st Accused lifted petroleum products and incurred a tax liability of GH¢1,731,294.13, (attached hereto and marked as Exhibit A is a copy of petroleum products lifted by the accused persons). The 1st Accused acting through the 2nd accused subsequently applied to the GRA in May 2019 to request for rescheduled payment of taxes, (attached hereto and marked as Exhibit B is a copy of request letter from the accused dated 20th May 2019.) GRA in a letter dated 12th July, 2019 granted the Accused persons the reschedule request on agreed terms over a twelve-month period, however the accused persons failed/refused to honor their obligations under payment reschedule which was granted them. (attached hereto and marked as Exhibit C is a copy of the letter rescheduling the payment of the petroleum taxes from the accused persons dated 12th July, 2019). Upon the refusal to honor their obligation under the payment reschedule, GRA then served a final demand notice on the accused person in a letter dated 19th April, 2021 6 | P age for the accused person to settle their tax liabilities. (attached hereto and marked as Exhibit D is a copy of the final demand notice by GRA). The Accused person acknowledged their tax liability to GRA in a letter dated 10th May, 2021 and pleaded with GRA for some time to settle their tax liabilities. (attached hereto and marked as Exhibit E is a copy of letter from the accused person acknowledging its tax liability to the GRA). The Accused persons after some payment by an insurance Company there was still outstanding tax liability of GH¢8,904,493.60 (attached and marked as Exhibit GRA F is a copy of the statement of account of the accused persons indicating their outstanding tax liability). Whether or not A2 has been assessed for the payment of tax. From Exhibit A as tendered by the Prosecution, A1 lifted oil and failed to pay tax which was assessed as they testified, incurred a tax liability of GH¢ 11,731,294.13. Section 46 (1) of Act 915 provides as follows: “Tax is payable at the time specified in the tax law under which the tax is charged.” According to the particulars of offence and testimony of PW1, this tax was due the state from 2017 to 2019 when the Petroleum products were lifted. The said products were lifted but taxes were not paid on them. Prosecution in their closing address submitted that, the standard practice is that the GRA grants a taxpayer 21 days after lifting petroleum products, with an additional 4-day grace period, for a total of 25 days to pay the taxes due. To this end the Accused person had twenty-five days (25) to pay their taxes to the GRA after lifting of Petroleum product. The period for the lifting spans from 2017 to 2019. As at September, 2021 when the Republic issued the Criminal summons against the Accused person, their liability stood at GH¢10, 694,051.86. The time for the payment 7 | P age long elapsed and the tax had become a debt before the criminal summons was issued. Demand notice was sent to the A2 for the payment of the tax debt. He wrote a letter back to the GRA dated 20th May, 2019 requesting for the rescheduling of the Tax debt. Exhibit B is the Re-scheduling of the Petroleum Tax debt. It was written and signed by A2, Mohammed Lamin Dawuda, Managing Director. The letter reads “We hereby write requesting for our outstanding petroleum taxes including interest in the sum of Eleven Million, Seven Hundred and Thirty-One Thousand, Two Hundred and Ninety-Four Ghana Cedis, Thirteen Pesewas (GH¢11,731,294.13) to be rescheduled for payment. This outstanding amount is for petroleum products liftings for the period between 16th November, 2017 to 31st December, 2018. Exhibit C shows that on the 12th July, 2019, GRA again wrote to A1 through A2 rescheduling the amount of GH¢11,731,294.13 to be paid from August, 2019 to July, 2020. Exhibit D shows that on the 19th April, 2021 GRA wrote final demand notice to A1 company stating that out of the GH¢11,731,294.13, Insurance has paid GH¢2,225,280.00 leaving an amount of GH¢9,168,771.86 to be paid by the Venus Oil company. Exhibit D indicated the time for the payment of the amount had lapsed but Accused persons were granted seven days within which to settle their indebtedness to the State. Upon receipt of Exhibit D, A2 authored Exhibit E. Exhibit E states in part “We refer to your letter dated 19th April, 2021 with the above subject and will like to put it on record that, the letter was received on Friday, May 7th, 2021. We fully accept our debt liabilities with the Ghana Revenue Authority but not on the said amount in the letter. Exhibit G is a letter written on 07/10/2021 by A2, it is headed “Use of landed property as a guarantee for outstanding tax liability.” It reads “In connection with our outstanding tax liability, we would like to propose the following: A landed property located in Accra, consisting of a fuel filling station, one storey block warehouse, an office on parcel no. 47 block 1 section 075 and an empty plot of land. All together make up one acre land size. The property is located in Adjiringanor caterpillar junctions, a suburb of East Legon. A conservative estimation of its value is $1.7 million united states dollars. 8 | P age The value is over and above our outstanding liability. We are pleading with your high office to accept it in order for us to resume business.” Exhibit G1 is the land certificate No. TD.2376 volume 019 Folio 1015. At the end of Prosecution’s case, this court ruled that, accused person has a prima facie case to answer. This term, prima facie simply means that the charge or allegation is sufficiently supported by evidence as to call for an answer or an explanation from the accused. Thus, in Sher Singh v. Jifendranath Sen (1931) I.L.R calc.275 at 286 Ghose J. defined Prima facie to mean that “there is a ground for proceeding …, proof is nothing but belief according to the conditions laid down in the evidence Act (in our case NRCD 323). Please see page 140 of The Ultimate Lawyer by Godfred Adjabeng. Where the prosecution is able to establish a prima facie case against an accused person, which means nothing more than a case that points accusing fingers at the accused in the absence of any explanation to the contrary, then the accused is required to offer an explanation or to raise doubts in the prosecution’s case if the accused person wants to escape conviction. In the case of ATSU v. THE REPUBLIC [1968] GLR 716 @719 CA, it was said; “As a general rule, evidence from the defence is not taken until the court has held that the prosecution has established a prima facie case. This is based upon the well-known principle that it is the prosecution which has an onus to prove the guilt of the person they accuse of an offence, and not the accused who should establish his innocence, the accused should therefore not show his hands until the need arises.” In considering the defence of the accused person, I will like to be guided by the case of Faisal Mohammed Akilu v. Republic (Criminal Appeal No. J3/8/2013) [2017] Unreported SC (05 July, 2017). It was held that, In the case of Luterodt v. COP [1963] GLR 429 SC, this court settled on three stages that every court had to go through in determining the guilt of an accused at the close of a criminal trial. The court held that: 9 | P age “where the determination of a case depends upon facts and the court forms an opinion that a prima facie case has been made, the court should proceed to examine the case for the defence in three stages: i. Firstly, it should consider whether the explanation of the defendant is acceptable. If it is, that provides complete answer and the court should then acquit the defendant; ii. If the court should find itself unable to accept or if it should consider the explanation to be not true, it should then proceed to consider whether the explanation is nevertheless reasonable probable; if it should find it to be, the court should acquit the defendant; and iii. Finally, quite apart from the defendant’s explanation or the defence taken by itself, the court should consider the defence such as it is together with the whole case; i.e. the prosecution and defence together, and be satisfied of the guilt of the defendant beyond reasonable doubt before it should convict, if not it should acquit. This means, upon applying the above authorities that the burden of proof will shift upon the accused person, to be called upon to answer to the charges. However, the burden carries a lower standard than that of the prosecution. The accused persons, within the framework of the law, would each have the burden of only raising a reasonable doubt. Accused person gave evidence on oath and called no witness. In the defence of the 2nd Accused person, he contested the amount owed as well as denied owing any tax. Exhibit 6 tendered by A2 is a letter which invited A2 to a meeting at Revenue Assurance and Compliance Enforcement (RACE) secretariat to review accused persons lifting of petroleum products from January, 2015 to July, 2020. According to the attached document 10 | P age to Exhibit 6, RACE put outstanding amount owed GRA by Venus Oil after reconciliation of amounts paid by accused persons through GCB, ECOBANK, BANK OF GHANA at GH¢3,198,026.49. GRA also contested amount reached by RACE. They are of the view that, RACE has no authority under the laws to do reconciliation of Accounts on behalf of GRA who is legally mandated to demand and collect revenues for the Government. A2 testified that the 1st Accused company is an Oil Marketing Company that sells petroleum products in the downstream. That he is also the MD of the 1st accused company. A2 denied owing any tax liability to the state. During evidence in chief of A2 for and on behalf of A1 and himself, this is what ensued: Question: You are before this court on the charge that the 1st accused company owes a tax liability in the sum of GHC10,694,051.86 as per the charge sheet of the prosecution, is that correct? Answer: Yes. Question: The State witness has also indicated that out of the amount of GH¢10,694,051.86, GH¢8,904,493.60 is outstanding tax liability of the 1st Accused company, is that correct? Answer: Yes. Question: Does the 1st accused company owe that tax liability to the state? Answer: No. Contrary to the evidence of A2 that A1 owes no tax to the state, Exhibit 6 is a letter heavily relied upon by A2 during cross-examination of the prosecution witness by learned counsel for the Accused. In this letter, A2 was invited to a meeting at Revenue Assurance and Compliance Enforcement (RACE) secretariat to review A1’s lifting of petroleum products from January, 2015 to July, 2020. Attached to Exhibit 6 is RACE’s outstanding 11 | P age balance amount owed by A1 to GRA after reconciliation of amounts paid by accused persons through GCB, ECOBANK, BANK OF GHANA amounting to GH¢ 3,198,026.49. GRA also contested this amount reached by RACE. They testified that their figure is the right figure to be considered. This is what ensued during cross-examination of A2 by the Republic; Question: Per your own calculations or company records of Exhibit 1, how much is A1 owing to GRA in terms of unpaid taxes on Petroleum lifting between 2017 and 2019? Answer: I have given sufficient explanations inside this box that A1 does not owe GRA any liabilities and if the reconciliations were done the way A1 had reached, it is rather GRA who has to refund A1. Q: You said A1 does not owe GRA, so on what basis was Exhibit B dated 20th May, 2019 written to GRA? A: I said here in this court earlier that, I wrote this letter only for A1 to get out of the red zone, for A1 to resume business whiles the reconciliation is ongoing. That is why you will see in subsequent letter that A1 is pointing out that it is not owing GRA. Question: I put it to you that there is no evidence before this court that A1 is not owing GRA. Kindly point to this court to conclusive evidence that A1 is not owing GRA? Answer: In Exhibit E written on 10th May, 2021, in that letter we did state our position. Exhibit B is a letter written by A2 requesting GRA to reschedule the tax owed to the State. In this letter A2 admitted owing the State an amount of GH¢11,731,294.13 for the period of 16th November, 2017 to 31st December, 2018 and proposed to pay the money in instalment. 12 | P age Exhibit E is letter, a reply to final demand notice from GRA. In Exhibit E written on 10th May, 2021, A2 again admitted owing GRA/State and pleaded for time to settle the tax debt. After the understanding in Exhibit E, A2 again authored Exhibit G. Exhibit G is a letter dated on 07/10/2021 by A2, it is headed “Use of landed property as a guarantee for outstanding tax liability.” It reads “In connection with our outstanding tax liability, we would like to propose the following: A landed property located in Accra, consisting of a fuel filling station, one storey block warehouse, an office on parcel no. 47 block 1 section 075 and an empty plot of land. All together make up one-acre land size. The property is located in Adjiringanor caterpillar junctions, a suburb of East Legon. A conservative estimation of its value is $1.7 million united states dollars. The value is over and above our outstanding liability. We are pleading with your high office to accept it in order for us to resume business.” Exhibit G1 is the land certificate No. TD.2376 volume 019 Folio 1015. After a close study of all the testimonies as well as the documents on record, it is quite clear that they are fraught with inconsistencies. The law is settled that a witness whose evidence on oath is contradictory to a previous statement made by him, whether sworn or unsworn, is not worthy of credit and his evidence cannot be regarded as being of any importance, unless he is able to give a reasonable explanation: Please see the case of GYABAAH V. THE REPUBLIC [1984-86] 2 GLR 461. The charge sheet in this matter was filed on 12th October, 2021 charging the accused persons with failure to pay tax. A2 now testified that A1 company owes no tax liability. When his own exhibits also show that he owes tax. All the letters written to GRA to reschedule the tax liabilities were written voluntarily by A2. None was written when accused was under arrest. There is evidence that Exhibit G was written when his fuel 13 | P age stations were closed down. His explanations that he wrote the letters admitting the debt and asking for re-schedule to enable GRA to open his stations for business are afterthought and not accepted by this court. Accused person is hereby convicted as charged. PLEA IN MITIGATION: Counsel for the Accused: We want to seek this court to exercise utmost discretion as justice requires and we plead the court to look at the accused person as a first-time offender. We pray accordingly. Prosecution: This is a case that has gone through full length of trial. The GRA has given the accused several opportunities to settle the tax debt however, the accused person failed to take the opportunity and contested the republic and denied owing any liability to GRA. Section 80 of the revenue Administration Act spelt out the punishment that the court ought to impose on a convicted accused person. (b) in any other case to a fine of not less than fifty penalty units and not more than two hundred penalty units or to a term of imprisonment of not less than one month and not more than three months or to both. By Court: I have considered the plea in mitigation of the learned counsel for the Accused person. I have also considered the input by the prosecution. I have taken note of the aggravating and mitigating factors as convict being a first-time offender. Convict is sentenced to one-month imprisonment. Prosecution may take a civil action to retrieve their funds as under the Criminal Procedure Act, 1960. (SGD) H/L COMFORT KWASIWOR TASIAME (JUSTICE OF THE HIGH COURT) 14 | P age COUNSEL: 1. JOSEPH OWUSU FOR THE REPUBLIC 2. GEORGE MINTA FOR THE ACCUSED PERSONS REFERENCE • Article 19(2) (c) of the Constitution, 1992 • Section 11(2) of the Evidence Act, 1975, NRCD 323 • Per Section 58(1) of Revenue Administration Act, 2016(Act 915) • Sher Singh v. Jifendranath Sen (1931) I.L.R calc.275 at 286 • ATSU v. THE REPUBLIC [1968] GLR 716 @719 CA • Faisal Mohammed Akilu v. Republic (Criminal Appeal No. J3/8/2013) [2017] Unreported SC (05 July, 2017). • Luterodt v. COP [1963] GLR 429 SC • GYABAAH V. THE REPUBLIC [1984-86] 2 GLR 461. • Section 46 (1) of Act 915 15 | P age