Court halts Rivers, Lagos from collecting VAT pending determination of case

The Court of Appeal sitting in Abuja has ordered all the contending parties to maintain the status quo on the collection of Value Added Tax (VAT) pending the determination of the appeal filed before the Federal Inland Revenue Service (FIRS).

The appellate court, in its order, which is the latest twist in the series of legal tussles over who has the responsibility to collect, asked the parties to refrain from taking action that would give effect to the judgement of the Federal High Court in Port Harcourt, which states that Rivers State government and not the FIRS should collect VAT.

Justice Haruna Tsammani, who led the 3-man panel of the appellate court, gave the order on Friday while ruling on an appeal filed by the FIRS and subsequently deferred the hearing of an application by the Lagos State to be joined as an interested party in the matter, till September 16, according to ChannelsTV.

However, the Lagos State government had through its Attorney-General and Commissioner for Justice, Moyosore Onibanjo, SAN, protested against the issuance of an order for the maintenance of status quo, insisting that such order could not be binding on it, since it was yet to be joined as a party in the appeal by FIRS.

The FIRS has been collecting the VAT for almost 3 decades until the Rivers State government decided to challenge the legality or otherwise of that.

The Lagos State government, in a new development, applied to be joined as a co-respondent to the suit filed by the FIRS at the appeal court.

Onigbanjo, who represented the state government at Friday’s hearing, informed the court that the interest of the state was at stake, stressing that if they were not joined, it would amount to a breach of a fair hearing.

He then urged the court to take the application for the joinder first before the application for the stay of execution filed by the FIRS.

However, the counsel to the FIRS, Mahmud Magaji (SAN), urged the court to hear the main application first, as it was of utmost priority.

The court of appeal, in its ruling, held that the motion of joinder by the Lagos State government be heard and gave the applicants 2 days to file their written addresses.