Court of Appeal joins Lagos in VAT legal tussle

Ogunsakin Mustapha
6 Min Read
Lagos State Attorney General and Commissioner for Justice, Moyosore Onigbanjo SAN

By Olalekan Awojodu

The Court of Appeal, Abuja has formally joined Lagos state government as the third respondent in the ongoing legal battle against between Rivers State, and the Federal Inland Revenue Service FIRS over the collection of Value Added Tax (VAT).

The court held on Thursday that Lagos state has established beyond doubt that it has substantial and sufficient legal rights and interest to protect in the revenue collection dispute

In a unanimous ruling, the appellate court ordered that having made Lagos a party in the matter, all processes filed in respect of the suit must be served on the state Attorney General and Commissioner for Justice as a third respondent to enable the state respond to the appeal filed by FIRS as required by law

Justice Haruna Simon Tsamani who delivered the lead ruling fixed October 7 for continuation of further hearing in the matter. He also ordered that the matter be moved from Abuja to Port Harcourt division of the Court of Appeal for further hearing of the case.

The appeal by the FIRS is against the August 9, 2021 judgment by Justice Steven Pam of the Federal High Court in Port-Harcourt, voiding the Value Added Tax (VAT) Act and holding that states as federating units could collect VAT.

A three-man panel, led by Justice Haruna Simon Tsanami, after listening to arguments by lawyers to parties on September 16, said they would be informed when the ruling is ready.

While arguing Lagos’ application for joinder, the state’s Attorney General, Moyosore Onigbanjo (SAN) had claimed that his client was a necessary party as it would be affected by the outcome of the case.

Onigbanjo had argued that Lagos has vested interest in the Value Added Tax’s collection and that the decision of the Court would affect It one way or the other when delivered.

The Attorney General informed the 3-man panel of Justices that FIRS in its appeal against the federal high court judgment made some allegations against It and that it would be in the interest of justice for it to be allowed to join in the appeal to ventilate its defense.

“From the contents of the appellants affidavit, Lagos has been made a necessary party in the appeal by some references to It and for it to be bound by the final decision, It is in the interest that It should be allowed to make defense to allegations against It”

Adedipe (SAN) representing Rivers State raised no objections to Onigbajo’s request, as he urged the court to join Lagos.

However, lawyers to FIRS and the Attorney General of the Federation (AGF), Mahmud Magaji (SAN) and Tijani Gazali (SAN) kicked against the move and prayed the court not to join Lagos.

The Court had on September 16 refused to grant the request of Rivers and Lagos States for the appointment of Receiver/Manager for the purpose of collecting and keeping Value Added Taxes (VAT) in place of the Federal Inland Revenue Services (FIRS) pending the resolution of all legal disputes in the matter.

The two states separately canvassed that the order of status quo ante belum granted on September 10 in favour of FIRS to continue the collection be put on hold in view of the appeal already logged at the Supreme Court against the order.

Counsel to Rivers State Chief Adedipe SAN in his oral application pleaded with the appellate  court to exercise its power under Order 4 Rule 6 of the Court of Appeal to appoint a Receiver/Manager to take custody of the VAT collection in the interest of justice to parties in the matter.

Attorney General of Lagos, Mr Onigbanjo who stood for his state toed the path of Rivers in canvassing that the court be fair and just in pending appeal.

Onigbanjo had specifically asked the Appeal Court to restrain FIRS from further collecting the tax and replace it with a Receiver/Manager that will act for patties that are locked in the legal battle.

The Lagos Attorney General had predicated his fear of unjust treatment on the fact that FIRS apart from collecting the tax has been sharing It among the 36 states and the Federal Capital Territory FCT despite the pendency of the legal tussle.

The Presiding Justice Tsamani had in a short ruling rejected the request and asked the two states to make their request formal by making it in writing.

FIRS as the appellant through its counsel, Magaji SAN vehemently opposed the Lagos request to join adding that that the state has not shown how its interest would be jeopardized if not allowed in the matter.

Dear readers, we really need your support to keep on serving you with authoritative, truthful, and juicy stories everyday. For your support, please reach out to the editor

Share This Article