The Appeal Court sitting in Abuja has ordered all parties to maintain the status quo and refrain from taking action that would give effect to the judgement of a Federal High Court in Port Harcourt that allowed the Rivers State government to collect Value Added Tax (VAT), pending the hearing and determination of the instant suit.
A three-man panel of the appellate court led by Justice Haruna Tsammani gave the order on Friday while ruling on an appeal filed by the Federal Internal Revenue Service (FIRS).
The order of the appellate court is the latest development in the series of legal tussles over whose responsibility it is to collect VAT.
Although the FIRS has taken up the responsibility over the years, the Rivers State government tested the legality recently, and it was worth the move.
On August 19, Governor Nyesom Wike assented to the Valued Added Tax Law, 2021 along with four others following their passage by the Rivers State House of Assembly.
His action was sequel to the judgement delivered by Justice Stephen Pam of the Federal High Court in the state capital who held that states should collect VAT, and not the Federal Government.
Displeased with the decision of the court, the FIRS filed a motion on notice to apply for a stay of execution on the earlier judgement delivered by Justice Pam.
But the court said refused the application, saying the federal agency failed to file an application to set aside the tax law recently enacted by the Rivers State House of Assembly.
Justice Pam, therefore, stated that the state law on VAT was valid and subsisting.
The FIRS later approached the Court of Appeal in Abuja with a civil motion seeking a stay of the execution of the judgement earlier granted by the court in Rivers pending the determination of the case.
Meanwhile the Lagos State Government on Friday applied to be joined as a co-respondent in the appeal filed by the Federal Inland Revenue Service (FIRS) against the judgement of the Rivers State High Court, which declared that the Rivers State Government had the right to collect Value-Added Tax (VAT) and Personal Income Tax in the state, and not the Federal Inland Revenue Services.
Attorney-General of the state, Moyosore Onigbanjo, made the request at the Court of Appeal in Abuja on behalf of the state government.
Onigbanjo told the court that the state’s interest was at stake, stressing that if they aren’t joined in the matter, it would amount to a breach of fair hearing.
He urged the court to take the application for the joinder first before the FIRS’ application for a Stay of Execution of the judgement of the Rivers State High Court.
The Counsel to the FIRS, Mahmud Magaji SAN, however, urged the court to hear the main application (stay of execution request) first, as that was of utmost priority.
Subsequently, the head of the three-man panel, Justice Haruna Tsammani, stepped down the matter for ruling.
