The Court of Appeal in Abuja, on Thursday, formally joined the Lagos state government as a respondent in the appeal filed by the Federal Inland Revenue Service (FIRS) against a judgement granted in favour of Rivers State by a Federal High Court, sitting in Port Harcourt 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
In a unanimous ruling, the appellate court ordered that having made Lagos a party in the matter, all processes filed in respect of the suit must be served on the state Attorney General and Commissioner for Justice as a third respondent to enable the state to respond to the appeal filed by FIRS.
Justice Haruna Tsamani, who delivered the lead ruling, ordered that the matter be moved from Abuja to the Port- Harcourt division of the Court of Appeal for further hearing slated for October 7, 2021, for the continuation of a further hearing.
The appeal by the FIRS is against the August 9, 2021 judgment by Justice Steven Pam of the Federal High Court in Port-Harcourt, voiding the Value Added Tax (VAT) Act and holding that states, as federating units could collect VAT.
A three-member panel of Justices of the appellate court, led by Justice Haruna Tsanami, after listening to arguments by lawyers to parties on September 16, reserved ruling to a date that would be communicated to parties in the matter.
In arguing Lagos’ application for joinder, the 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 a vested interest in the VAT collection and that the decision of the Court would affect It one way or the other when delivered.
The Attorney General told the court that FIRS, in its appeal against the judgment of the trial court, made some allegations against the state 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 appellant’s 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 a defence to allegations against it”
Lawyer to Rivers State, Ifedayo Adedipe (SAN) agreed with Onigbanjo and urged the court to join Lagos.
However, counsel to FIRS and the Attorney General of the Federation (AGF), Mahmud Magaji (SAN), and Tijani Gazali (SAN) respectfully argued otherwise and prayed the court not to join Lagos State.
The Court had on 16th September, refused to grant the request of Rivers and Lagos States for the appointment of Receiver/Manager for the purpose of collecting and keeping VAT in place of the 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, 2021, in favour of FIRS to continue the collection be put on hold in view of the appeal already lodged at the Supreme Court against the order.
Counsel to Rivers State, Chief Ifedayo Adedipe (SAN), in his oral application pleaded with the appellate court 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, 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 said, apart from collecting the tax, FIRS has been sharing It among the 36 states and the Federal Capital Territory (FCT) despite the pendency of the matter.
Justice Tsamani had in a ruling, rejected the request and asked the two states to make their request formal by making it in writing.
FIRS as the appellant through its counsel, Mahmoud Magaji (SAN) opposed the Lagos request to join adding that that the state has not shown how its interest would be jeopardized if not allowed in the matter.
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