RULING

In this application the Receivers/Managers/Applicants pray the Court for a declaratory Order that the Revenue Administration Act, 2016 (Act 915) is not applicable to a secured debt which has a proceeding on it pending in a court of law and for a further order debonding the warehouse of the 4^th Defendant which has been the subject-matter of sale during the Receivership period.

I have read the application and supporting affidavit. I have further read the affidavit in opposition and the supplementary affidavit in opposition. Regard has been given to the oral submissions made by both Counsel for and against the motion. I have given thoughtful consideration to Section 110(5) and 111 of the Revenue Administration Act, 2016 (Act 915) and Section 46(7) of the Income Tax Act, 2015 (Act 896).

It is however useful for me to place emphasis on the Section 46(7) of the 7^th Schedule of Act 896 which provides:

“Subparagraph (6) does not apply to secured debt”

The preceding paragraph 6 had stated that in making payment out of proceeds of the sale of assets, a receiver shall give priority to unpaid Value Added Tax and withholding tax over all other debts of the tax payer.

In the case before me, the issues which I have to resolve are whether or not the Act 915 can have retroactive effect and thereby place a duty on the receivers to settle the tax debt of the company under receivership (if any) as a priority. The other issue is as to whether it is just for the court to order the debonding of the warehouse.

In the first place, Ghana Revenue Authority has failed to establish that the 4^th Defendant owed any

Value Added Tax or a withholding tax. GRA filed an affidavit on 18^th May, 2018 with a demand notice attached which is dated May 13, 2016.

Reading through the said exhibit GRA ‘1’, I do not find any reference to a withholding tax or Value Added Tax. The paragraph 3 of the said demand notice states: “Total duties, taxes and penalty payable amounts to Twenty-three Million, One Hundred and seventy-One

Thousand, Two Hundred and Seventy-One Ghana Cedis and four pesewas (GH¢23,171,271.04).”

Clearly, even where the case of the GRA is given any consideration under the subsection 6 of Section 46 of Act 896, I find it difficult to agree with GRA that the 4^th Defendant owed a debt in the nature of Value Added Tax or withholding tax. The mere mentioning of duties, tax and penalty in exhibit GRA’1’ is not sufficient proof of the tax liabilities of 4^th Defendant in the nature of Value Added Tax or Withholding Tax. It appears to me that GRA had not served the 4^th Defendant with any notice of tax liability. If they had, they would have filed a copy in this court.

The demand notice which has been filed in this case is dated May 2016. It is therefore my opinion that the said demand notice is an afterthought.

In any case, the law is certain on the duties of the receiver when it comes to payment of debts. The subsection 7 which has been earlier referred to is clear and unambiguous. In respect of payments of debt, secured debt do not fall under the category of debts that the subsection 6 apply to. Can it be said that the Act 915 is applicable to this transaction.

The Section 111 of Act 915 gives the commencement date of the law as 1^st January, 2017. The instant proceedings was filed in this court on the 27^th January, 2016. The Section 110(5) then went on further to put beyond doubt the applicability of this law to proceedings pending on debts before the coming into effect of this Act as follows:

“An Appeal, prosecution or other proceeding commenced before the commencement of this Act shall continue and be disposed of as if this Act had not come into force.”

The combined effect of Section 110(5) and Section 111 of Act 915 coupled with the effect of section 46(7) of Act 896 is that this Act 915 cannot operate retroactively to change the position of the law under Section 46(7) which exempt all secured debts.

The provisions of Section 46(6) which makes Value Added Tax and Withholding Tax a priority is therefore not applicable to the secured debt the subject matter of the proceeding which was pending before Act 915 came into effect.

It is my considered opinion therefore, that in so far as the 4^th Defendant’s debt to Access Bank was a secured debt, the Section 46(6) does not apply to it. Again, the enactment of Act 915 has no effect on the said debt as the Act 915 has no retroactive effect on the said secured debt.

The next issue I have to resolve is as to whether the warehouse under consideration be debonded. The duty of the Receiver to sell the assets of the 4^th Defendant is not in doubt. Having sold it to a purchaser, it stands to reason that the purchaser should be put in possession. This can only be done when the warehouse is debonded, otherwise, it would be a case of buying “a white elephant”. I will accordingly order the debonding to enable the purchaser have possession.

Accordingly, the Ghana Revenue Authority is hereby ordered to debond warehouse situate on Plot No. 128, Nungua Baatsona, (No. A080), Spintex Road, Accra, within 14 days from the date of this order. I make no order as to costs.