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Until the hearing and determination of the instant suit, the Appeal Court in Abuja has ordered all parties to maintain the status quo and refrain from taking any action that would give effect to a Federal High Court in Port Harcourt’s decision allowing the Rivers State government to collect Value Added Tax (VAT).
The order was issued on Friday by a three-member panel of the appellate court, led by Justice Haruna Tsammani while ruling on a Federal Internal Revenue Service appeal (FIRS).
The appellate court’s decision is the latest in a long line of legal wranglings over who is responsible for collecting VAT.
Even though the FIRS has assumed responsibility over time, the Rivers State government recently put the legality to the test, and it proved to be worthwhile.
Following passage by the Rivers State House of Assembly on August 19, Governor Nyesom Wike signed the Valued Added Tax Law, 2021, along with four other bills.
Justice Stephen Pam of the Federal High Court in the state capital had ruled that states, not the federal government, should collect VAT.
The FIRS filed a motion on notice to seek a stay of execution on the earlier judgement delivered by Justice Pam, citing its dissatisfaction with the court’s decision.
The federal agency failed to apply to set aside the tax law recently enacted by the Rivers State House of Assembly, according to the court, so the application was denied.
As a result, Justice Pam declared the state’s VAT law to be valid and in force.
The FIRS then filed a civil motion with the Court of Appeal in Abuja, requesting a stay of execution of the Rivers court’s judgement pending the outcome of the case.
Rivers are supported by Lagos.
As the legal battle continues, some states have backed the Rivers State government’s actions, particularly Lagos, where the government is on the verge of making it a law to collect TAX instead of FIRS.
Legislators in the Lagos State House of Assembly read the bill for the third time on Thursday and passed it. More states have indicated that they will join the part as it awaits governors’ approval.
In the meantime, the Lagos State government has filed an application to be added as a co-respondent to the FIRS’ appeal court suit.
At Friday’s hearing, the state government was represented by Attorney General of the State and Commissioner of Justice, Moyesore Onigbanjo.
He told the court that the state’s interests were on the line and that if they weren’t joined, it would be a violation of the right to a fair trial.
Onigbanjo, a Senior Advocate of Nigeria (SAN), urged the court to consider the joinder application first, before considering the FIRS’s request for a stay of execution.
However, Mahmud Magaji (SAN), counsel for the federal agency, urged the court to hear the main application first because it was the most important.
The appellate court ruled that the Lagos State government’s motion for joinder should be heard and that the applicants should file their written addresses within two days.
Respondents have been given two days to file their responses, while applicants have been given one day to respond on the point of law.
Tags: Appeal Court Orders All Parties To Maintain Status Quo
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