The Federal Inland Revenue Service ( FIRS) has won the second round of the legal battle with both Rivers and Lagos State governments over who has the right to collect Value Added Tax (VAT) in states.
The Court of Appeal today, September 11 in Abuja, stopped the two state governments from going ahead to be collecting VAT until all legal disputes relating to the matter are resolved. The lower court had earlier ruled in favour of Rivers state government collecting the tax.
But the Appeal court ordered that the judgment of the State high court from which the states drew authorities to collect the tax must not be implemented.
Justice Haruna Simon Tsanami, who issued the order in Abuja today also directed that the law passed by Rivers State House of Assembly and assented to by governor Nyesom Ezenwo Wike must not be implemented pending the determination of the appeal before it.
The appellate court held that since parties have submitted themselves to the authorities of the court for adjudication of the matter, they must not do anything that will destroy the res (subject matter) of the appeal.
In specific terms, the 3-man panel of Justices led by Justice Tsanami granted status quo ante bellum in favour of the Federal Inland Revenue Services (FIRS) and against the respondents.
The appellate court said the order was to preserve the ‘Res’ (subject matter) of the appeal before it.
The matter has been slated for September 16, 2021 for hearing of motion for joinder by Lagos State.
Lagos State had through its Attorney-General, Moyosore Onibanjo (SAN), protested against the issuance of an order for the maintainance of status quo, insisting that such order could not be binding on it, since it had yet to be joined as a party in the appeal by FIRS.
FIRS, in an appeal marked CA/PH/282/2021, is praying the court to set aside the judgment of a Rivers State High Court which granted power to the state to collect Value Added Tax, VAT.
The tax collection agency is also asking the appellate court to stay the execution of Rivers’ judgment.