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Appeal Court asks Rivers, FIRS to maintain status quo on VAT ruling

By on September 10, 2021 0 129 Views

The Court of Appeal in Abuja has ordered parties in the dispute over the administration of the Value Added Tax (VAT) to stay action pending the resolution of all legal issues in contention.

A three-member panel of the court on Friday,  ordered parties to maintain status quo ante bellum and refrain from acts capable of jeopardising the res (subject of the dispute).

The court agreed with the lawyer to the Federal Inland Revenue Service (FIRS), Mahmud Magaji (SAN) that, having submitted to its (the court’s) jurisdiction, it was incumbent on parties to preserve the res.

Justice Haruna Simon Tsanami, in the lead ruling, ordered parties not to give effect to the August 9 judgment of Federal High Court in Port Harcourt and the VAT law enacted by Rivers State.

The court also granted leave to the Lagos State Government to bring an application to be heard in the case as an interested party  in the appeal filed by FIRS against the Federal High Court judgment.

It noted that Lagos State’s  right would be adversely effected if not heard.

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The Lagos State Attorney General of Lagos State, N. J. Onigbanjo was subsequently joined as an interested party in the appeal against the judgment of a Federal High Court, Rivers.

The Rivers State Government had last month secured a major court victory over the federal government in the collection of VAT in the state.

Justice Stephen Pam of a Federal High Court in Port Harcourt had, in a judgment delivered on August 9, held that the Rivers State Government and not the FIRS, has the right to collect VAT, Personal Income Tax in the state.

Justice Pam, in the judgment subsequently restrained the Attorney General of the Federation (AGF) and FIRS (1st and 2nd defendants) from collecting VAT in Rivers and directed the Rivers State Government to take charge of the duty.

As a result of the court’s decision, the Lagos State Government commenced a move to stop the collection of VAT by the FIRS in the state.

Miffed by the decision of the trial court and also the move by Lagos State, the FIRS approached the Court of Appeal for an order staying the judgment of Justice Pam and another order restraining the Rivers State Government from collecting VAT in the state.

The court then adjourned till September 16 for the hearing of pending applications, including the joinder application by Lagos.

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