The bid by the duo of Rivers and Lagos state governments to stop the Federal Inland Revenue Services (FIRS) from collecting the Value Added Taxes (VAT) experienced a setback of sort Thursday at the Court of Appeal, Abuja.
Specifically, the appellate court declined their requests to stop the federal agency pending the resolution of all legal disputes in the matter.
The FIRS had appealed the August 9, 2021 judgment by Justice Steven Pam of the Federal High Court in Port-Harcourt, voiding the VAT Act and ruling that states could collect VAT.
But in separate requests placed before the court, the two states canvassed that the order of status quo ante belum granted September 10 in favour of FIRS to continue the collection be put on hold in view of the pending appeal at the Supreme Court against the order.
In his oral application, counsel to Rivers state, Ifedayo Adedipe (SAN) urged it to exercise its power under Order 4 Rule 6 of the Court of Appeal to appoint a receiver or manager to take custody of the VAT in the interest of justice to parties in the matter.
Similarly, Lagos state Attorney General, Moyosore Onigbanjo (SAN), who stood for his state, made similar plea and urged the court to be fair and just in pending appeal.
Specifically, Onigbanjo prayed the appellate court to restrain FIRS from further collecting the tax and replace it with a Receiver or Manager that would act for patties locked in the legal battle.
The silk contended that his expressed fear of unjust treatment was hinged on the fact that FIRS, apart from collecting the tax, had been sharing it among the 36 states and the Federal Capital Territory (FCT) despite the pendency of the legal tussle.
But the three-man panel, led by Justice Hamma Simon Tsanami, asked the two states to formalise their requests by putting it into writing, thus temporarily halting the move to stop VAT collection by FIRS.
Tsanami led two other jurists on the panel. They are Justices Bature Gafai and Peter Affen.
And further to this, the court reserved ruling in an application by Lagos state government to be made a respondent in the appeal filed by the FIRS against a judgement granted in favour of Rivers state government by a Federal High Court in Port Harcourt.
Moving the application, Onigbanjo argued that Lagos state government had vested interest in the VAT collection and that it would be affected by the court’s decision when delivered.
Onigbanjo said: “I think it is also necessary to restrain the FIRS, because they collect the VAT, distribute to all the states and keep their own 4 per cent.
“If, at the end of the day, the court agrees with the judgment of the Federal High Court, how do we retrieve the funds that have been shared?”
He told the 3-man panel that the FIRS in its appeal, made some allegations against the state and 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 defense to allegations against it,” he further submitted.
However, the FIRS, through its counsel, Mahmoud Magaji (SAN) opposed the request by the Lagos state government to be joined, arguing that the state did not show how its interest would be jeopardised if not allowed in the matter.
Meanwhile, the court struck out the processes filed by the Attorney General of the Federation Abubakar Malami (SAN) through his counsel, Tijani Gazali (SAN), on the ground that they were not competent, having been filed out of time.
And consequent upon this, Justice Tsanami reserved ruling after talking arguments from parties, and held that parties would be duly communicated when the ruling is ready.
Southern govs kick
However, the Southern Nigeria Governors Forum (SNGF) insisted states had the power under the law to collect VAT.
The governors made the position known in a communiqué issued at the end of their meeting in Enugu Thursday.
In the communiqué read by the SNGF Chairman and Ondo state Governor Rotimi Akeredolu (SAN), the governors resolved to support the position that collection of VAT falls within the powers of the states.
They also reaffirmed their commitment to fiscal federalism and return of the presidency to the South in 2023.
The SNGF also commended the southern states for enacting the anti-open grazing law, urging them to implement the law to the letter.
“The meeting expressed satisfaction with the rate at which the states in the Southern are enacting or amending the anti-open grazing law, which aligns with the uniform template and aspirations of the Southern governors and encourage the states that are yet enact the law to do so expeditiously.
“The meeting agreed to encourage the full operationalisation of already agreed regional security outfits, which will meet, share intelligence and collaborate to ensure the security and safety of the region.
“Following from the above, the meeting resolved to support the position that collection of VAT falls within the powers of the States
“The meeting expressed satisfaction with the army of issues around the Petroleum Industry Act (PIA) and ownership of NNPC by the larger Nigerian Governors Forum
“The meeting reiterated its earlier position that the next president of Nigeria must come from the southern part of Nigeria in line with politics of equity, justice and fairness,” the communiqué read in part.