GHANA REVENUE AUTHORITY vs. SIC INSURANCE COMPANY LTD. [2016]DLHC9056

Date	2016-06-16
Suit No.	SUIT NO. INS/02/2014
Citation No.	[2016]DLHC9056

JUSTICE JENNIFER ABENA DADZIE

FREEMAN SARBAH ESQ. OF THE LEGAL DEPARTMENT OF GHANA REVENUE AUTHORITY HEAD OFFICE ACCRA COUNSEL FOR PLAINTIFF

PRINCE EMMANUEL MAWUVENU ESQ. OF THE LEGAL AFFAIRS DEPARTMENT OF SIC INSURANCE COMPANY LIMITED ACCRA COUNSEL FOR DEFENDANT

[2016]DLHC9056
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													<main id="main" class="content" style="min-height: 60rem" >GHANA REVENUE AUTHORITY<o:p></o:p>(PLAINTIFF)<o:p></o:p>vs.<o:p></o:p>SIC INSURANCE COMPANY LTD.<o:p></o:p>(DEFENDANT)<o:p></o:p>[HIGH
COURT, ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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</div>COUNSEL:<o:p></o:p>FREEMAN
SARBAH, ESQ., OF THE LEGAL DEPARTMENT OF GHANA REVENUE AUTHORITY, HEAD OFFICE,
ACCRA, COUNSEL FOR PLAINTIFF<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0cm 0cm 1.0pt 0cm">

PRINCE EMMANUEL MAWUVENU, ESQ., OF THE
LEGAL AFFAIRS DEPARTMENT OF SIC INSURANCE COMPANY LIMITED, ACCRA, COUNSEL FOR
DEFENDANT<o:p></o:p>

</div>CORAM:<o:p></o:p>JUSTICE JENNIFER ABENA DADZIE<o:p></o:p><div style="mso-element:para-border-div;border-top:solid windowtext 1.5pt;
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<p class="MsoNormal" align="center" style="margin-bottom:0cm;margin-bottom:.0001pt;
text-align:center;line-height:115%;border:none;mso-border-top-alt:solid windowtext 1.5pt;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm;mso-padding-alt:1.0pt 0cm 1.0pt 0cm">JUDGMENT<o:p></o:p>

</div><o:p>&nbsp;</o:p>The Plaintiff is a State Agency established
by an Act of Parliament with the responsibility to collect tax revenue for and
on behalf of the Government of Ghana.&nbsp;
The Defendant, on the other hand, is an insurance company registered
under the laws of Ghana.<o:p></o:p>The material facts which gave rise to
the matter before me are stated in Plaintiff’s statement of claim as
corroborated in material aspects by the testimony of Plaintiff’s witness, Mr.
Samuel Bentil and supported by the documentary evidence adduced by the
Plaintiff in support of its case. It is the testimony of Plaintiff’s witness
that he is a Tax Administrator who has been working with the Plaintiff (from
the then CEPS) for over twenty-seven (27) years.&nbsp; He testified that he is currently the Head of
the Debt Management Section of the Debt Management, Compliance and Enforcement
Unit of the Office of the Commissioner General, Head Office and the facts to
which he testified came to his knowledge in connection with his duties as the
Head of Debt Management of the Ghana Revenue Authority and its dealings with
Novel Commodities Ghana Limited, a Customs Licensed Bonded Warehouse Operator.<o:p></o:p><o:p>&nbsp;</o:p>According to Plaintiff, as part of the
requirement for Novel Commodities Ghana Limited to obtain a licence to engage
in the business of bonded warehousing of goods under the Customs, Excise and
Preventive Service (Management) Act, 1993, P.N.D.C.L. 330, as amended, it was
required by the Plaintiff, as condition precedent, to take out a bond guaranteeing
payment in full of all revenue that would be lost to the State arising from the
non-payment of customs duties, excise duties and all other lawful taxes
exigible on the goods warehoused under bond in the licensed premises.&nbsp; To this end, Novel Commodities Ghana Limited
executed a bond for the security of the goods warehoused in its premises for
the period of 10th April, 2013 to 9th April, 2014 in the
sum of Five Million Ghana Cedis (GH¢5,000, 000.00) with the Defendant. The said
warehouse bond was referenced as Bond No. P/102/41/4106/2012/3/Warehouse No.
T/287.&nbsp; A copy of the bond agreement
executed between the Defendant and Novel Commodities Ghana Limited was tendered
in evidence by the Plaintiff and marked as Exhibit “A”. <o:p></o:p><o:p>&nbsp;</o:p>It is the Plaintiff’s case that per the
terms of the bond agreement, Defendant (hereinafter, referred to as
“Guarantor/Defendant”), irrevocably and unconditionally guaranteed for and on
behalf of Novel Commodities Ghana Limited (hereinafter, referred to as the
“Principal Debtor”) to pay in full all revenue lost to the State arising from
the non-payment of customs duties and all other lawful taxes exigible on goods
warehoused under bond in the licensed premises. Furthermore, under the terms of
the bond agreement, Plaintiff was required to notify Defendant of any loss,
omission, default or breach or law which may lead to a claim under the bond
within one year after the expiration of the bond. <o:p></o:p><o:p>&nbsp;</o:p>Plaintiff states that an audit it
conducted into the activities of the Principal Debtor in May, 2013 revealed a
short fall of Ten Million Seven Hundred and Eighty Three, Four Hundred and
Fifty Eight, Fifty-five Pesewas (GH¢10,783,458.55).&nbsp; According to the evidence of the record,
though the stock check exercise was conducted from May 13, 2013 and May 14,
2013, the audit reconciliation actually started from March 28, 2012 to consider
all transactions conducted in the warehouse.&nbsp;
Consequent upon this audit exercise, by Exhibit “B”, Plaintiff,
therefore, demanded from the Principal Debtor the payment of the shortfall
together with a pecuniary penalty to mark the offence and serve as a deterrent,
in the total amount of Twenty One Million, Five Hundred and Sixty-six Ghana
Cedis, Ten Pesewas (GH¢21,566,917.10). In accordance with the terms of the bond
agreement, Plaintiff, by a letter dated 25th February, 2014, made a
formal demand on Defendant for payment under the bond for the full amount of
the security of GH¢5,000,000.00.&nbsp; <o:p></o:p>