Accra, Feb. 2 (Chronicle) -- Nearly two decades of legal tussle to de-confiscate the assets of Mr. BA Mensah, owner of International Tobacco Company, took a dramatic turn last week at the Accra High Court with the company winning the first battle.
Pronouncing judgment, the presiding judge, Justice Kofi Akwaah stated that the attachment, sale and use of the company?s immovable assets, including trademarks and cash was unlawful, thus void and of no effect.
The learned Judge argued that relying on Section 31 of the NRCD 114 decree to support the purported seizure of immovable assets on the orders of the then Commissioner of CEPS for defaulting the payment of excise duty amounting to ?751,118,448.80, was wrongful, void and of no effect. The court said trademarks are ?distrainable? as they are ?incorporeal? and not immovable property.
The court further explained that the right to a trade mark could not be taken away from the rightful owner since it remained the exclusive right of the holder, for which no distress could claim the right to produce goods other than the original holder.
?I therefore hold that the purported distraint, sale and Plaintiff?s ITG trademark by the commissioner, Customs and Excise, is unlawful and thus ab initio and of no effect,? the court ruled.
The court noted that ITG, as a tax payer, is under obligation to pay all accrued levies to the state and in default, the government could proceed to levy distress against the company?s movables.
In the case where monies acquired from the sale of the movable assets could not satisfy the tax debt, a court order could be sought to attach the company?s immovable assets to defray the debts.
?By failing to go strictly according to the dictates of the law, government committed grave errors which undermines its action and made the whole exercise void,? the court intimated.
The court added that, the decree does authorize the comptroller to take up immovable assets belonging to a manufacturer, with the aim of enforcing Section 31 of the decree.
?The law only empowers the Comptroller to seize and sell distrainable items mentioned if duties are not paid,? the court emphasized.
It would be recalled that the Commissioner of Customs Excise and Preventive Service, on July 25, 1989 issued out a distress warrant to the Deputy Commissioner, Preventive, CEPS against the plaintiff, International Tobacco Ghana Ltd, saying that he should collect and recover the sum of ?751,118,448.80 due for excise duty from the company having its factory at Accra.
CEPS was also to recover this amount, if necessary, with the assistance of police.
In executing the distress warrant, CEPS seized cash amounting to ?1.4 million and immovable properties of the company, including the head office and the factory building at North Kaneshie.
The company?s shares, investments and trade marks and sold same to SSNIT by a sale agreement dated August 18, 1989, made between CEPS and SSNIT. The company cried foul and instituted action at an Accra High Court, claiming that the purported detraining of its immovable property, shares and trade mark was unlawful.
The court granted leave to the plaintiff to file an amended writ of summons on March 31, 2003 and was filed on April 17, 2003. In reaction, CEPS, the second defendant, filed an amended statement of defense and counterclaim on May 12, 2003.
The High Court presided over by Justice Anin-Yeboah (as he then was) on October 12, 2003, granted the plaintiff?s application and set down the plaintiff?s issues for legal arguments under ORDER 25 Rules 2 and 3 and adjourned for counsel to file their submissions. In his ruling, the presiding Judge, Justice Akwaah stated that, ?where excise duty on any goods remain unpaid after the time within which it is payable, the comptroller may authorize the levying of a distress upon the foods, chattels and effects of their manufacturer and upon all machinery, plant tool, ships, vehicles, animals, goods and effects used in Ghana in the manufacture, sale or distribution of excisable goods found in any premises or on any lands in use or possession of such manufacturer or of any person on his behalf or in trust for him.?
?The authority to restrain under this section shall be in the form contained in the third schedule and shall be a warrant and authority to levy by distress the amount of any excise duties due,? the court noted.
According to the judge, ?if we look at all the distrainable items mentioned in section 31(1) and of the distress warrant quoted supra and exemplified in the schedule to the decree NRCD 114 namely goods, chattels and effects of their manufacturer or all machinery, plant tool, ships, vehicles and animals, it is clear that they are movables only. It is therefore untenable in these circumstances to claim that immovable property is also included. In such circumstances, the rule is to express or include in detail chattels and goods without a single mention of immovables implies the exclusion of immovables,? the court stated.
Meanwhile, checks at the British American Tobacco on the ownership of the factory revealed that BAT sold the factory to Duraplast after acquiring it when BAT merged with Rothmans. Rothmans had purchased the factory building from Meridian Tobacco and SSNIT just after International Tobacco was nationalized.
Speaking to the solicitors of Mr. Mensah, Ntrakwah and Co., they said the case was just one of more things to come as the first victory was over the legal argument.
Accra, Feb. 2 (Chronicle) -- Nearly two decades of legal tussle to de-confiscate the assets of Mr. BA Mensah, owner of International Tobacco Company, took a dramatic turn last week at the Accra High Court with the company winning the first battle.
Pronouncing judgment, the presiding judge, Justice Kofi Akwaah stated that the attachment, sale and use of the company?s immovable assets, including trademarks and cash was unlawful, thus void and of no effect.
The learned Judge argued that relying on Section 31 of the NRCD 114 decree to support the purported seizure of immovable assets on the orders of the then Commissioner of CEPS for defaulting the payment of excise duty amounting to ?751,118,448.80, was wrongful, void and of no effect. The court said trademarks are ?distrainable? as they are ?incorporeal? and not immovable property.
The court further explained that the right to a trade mark could not be taken away from the rightful owner since it remained the exclusive right of the holder, for which no distress could claim the right to produce goods other than the original holder.
?I therefore hold that the purported distraint, sale and Plaintiff?s ITG trademark by the commissioner, Customs and Excise, is unlawful and thus ab initio and of no effect,? the court ruled.
The court noted that ITG, as a tax payer, is under obligation to pay all accrued levies to the state and in default, the government could proceed to levy distress against the company?s movables.
In the case where monies acquired from the sale of the movable assets could not satisfy the tax debt, a court order could be sought to attach the company?s immovable assets to defray the debts.
?By failing to go strictly according to the dictates of the law, government committed grave errors which undermines its action and made the whole exercise void,? the court intimated.
The court added that, the decree does authorize the comptroller to take up immovable assets belonging to a manufacturer, with the aim of enforcing Section 31 of the decree.
?The law only empowers the Comptroller to seize and sell distrainable items mentioned if duties are not paid,? the court emphasized.
It would be recalled that the Commissioner of Customs Excise and Preventive Service, on July 25, 1989 issued out a distress warrant to the Deputy Commissioner, Preventive, CEPS against the plaintiff, International Tobacco Ghana Ltd, saying that he should collect and recover the sum of ?751,118,448.80 due for excise duty from the company having its factory at Accra.
CEPS was also to recover this amount, if necessary, with the assistance of police.
In executing the distress warrant, CEPS seized cash amounting to ?1.4 million and immovable properties of the company, including the head office and the factory building at North Kaneshie.
The company?s shares, investments and trade marks and sold same to SSNIT by a sale agreement dated August 18, 1989, made between CEPS and SSNIT. The company cried foul and instituted action at an Accra High Court, claiming that the purported detraining of its immovable property, shares and trade mark was unlawful.
The court granted leave to the plaintiff to file an amended writ of summons on March 31, 2003 and was filed on April 17, 2003. In reaction, CEPS, the second defendant, filed an amended statement of defense and counterclaim on May 12, 2003.
The High Court presided over by Justice Anin-Yeboah (as he then was) on October 12, 2003, granted the plaintiff?s application and set down the plaintiff?s issues for legal arguments under ORDER 25 Rules 2 and 3 and adjourned for counsel to file their submissions. In his ruling, the presiding Judge, Justice Akwaah stated that, ?where excise duty on any goods remain unpaid after the time within which it is payable, the comptroller may authorize the levying of a distress upon the foods, chattels and effects of their manufacturer and upon all machinery, plant tool, ships, vehicles, animals, goods and effects used in Ghana in the manufacture, sale or distribution of excisable goods found in any premises or on any lands in use or possession of such manufacturer or of any person on his behalf or in trust for him.?
?The authority to restrain under this section shall be in the form contained in the third schedule and shall be a warrant and authority to levy by distress the amount of any excise duties due,? the court noted.
According to the judge, ?if we look at all the distrainable items mentioned in section 31(1) and of the distress warrant quoted supra and exemplified in the schedule to the decree NRCD 114 namely goods, chattels and effects of their manufacturer or all machinery, plant tool, ships, vehicles and animals, it is clear that they are movables only. It is therefore untenable in these circumstances to claim that immovable property is also included. In such circumstances, the rule is to express or include in detail chattels and goods without a single mention of immovables implies the exclusion of immovables,? the court stated.
Meanwhile, checks at the British American Tobacco on the ownership of the factory revealed that BAT sold the factory to Duraplast after acquiring it when BAT merged with Rothmans. Rothmans had purchased the factory building from Meridian Tobacco and SSNIT just after International Tobacco was nationalized.
Speaking to the solicitors of Mr. Mensah, Ntrakwah and Co., they said the case was just one of more things to come as the first victory was over the legal argument.
