A’ Court joins Lagos with Rivers in VAT Collection battle against FIRS

The Court of Appeal in Abuja on Thursday  formally allowed Lagos state government to be joined as the third respondent in the fierce legal battle against  the  Federal Inland Revenue Service FIRS  over  the collection  of Value Added Tax (VAT). 

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

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

Justice Haruna Simon Tsamani  who delivered the lead ruling of the unanimous decision also  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, to the effect Rivers State is empowered to collect the Value Added Tax (VAT) .

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

In its argument for joinder Lagos 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 Taxes collection and that the decision of the Court would affect It one way or the other as the state has enacted law on VAT collection.

The Attorney General informed the 3-man panel of Justices that FIRS in its appeal against the federal high 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”
Lawyer to Rivers State, Ifedayo Adedipe (SAN) agreed with Onigbajo and 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) respectfully vehemently argued otherwise 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 Ifedayo Adedipe SAN in his oral application pleaded with the appellate 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 Moyosore Onigbanjo SAN 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, Hamma Simon Tsamani had in a  short ruling rejected the request and asked the two states to make their request formal by making it in writing.
 This issue may be the first to resolve when the matter resume in Port Harcourt on  October 7,2021.