Rivers and Lagos States governments, Friday, suffered a temporary set-back in their drive to impose value added tax, VAT, on goods and services in their jurisdictions.
The Court of Appeal, Abuja Division, Friday, stopped the two states from implementing their VAT law pending the hearing and determination of applications before it in respect of the Valued Added Tax.
Giving the ruling, a three-man panel of the appeal court, headed by Justice Hassan Tsammani, specifically ordered the Rivers Government, the Federal Inland Revenue Service, FIRS, and the Attorney-General of the Federation to maintain status quo.
The Federal High Court, Port Harcourt, had on August 9, 2021, ruled that it was the Rivers Government, and not the FIRS, that should collect VAT and Personal Income Tax in the state.
The Appeal Court justices ordered all parties to maintain status quo and refrain from taking any action that would give effect to the judgment of the Federal High Court, Port Harcourt.
Justice Tsammani held that since all parties in the matter had submitted themselves before the court, it was proper and lawful for the court to protect the subject matter from being rendered nugatory.
The court, therefore, ordered the parties to refrain from giving effect to the judgment of the trial court in Port Harcourt pending the determination of the application of the FIRS to stay execution of the judgment of the lower court.
Similarly, the parties were also ordered to maintain status quo pending the hearing of an application by the Attorney-General of Lagos State to be joined as a party in the matter.
Counsel to the appellant/applicant, Mr Mahmud Magaji, a Senior Advocate of Nigeria, SAN, made an oral application for an order that status quo be maintained pending the hearing and determination of the motion for injunction and stay.
But counsel to the Rivers State Government, Mr. Emmanuel Ukala, SAN, and Mr. Oyosore Onigbanjo, SAN, counsel to Lagos State Government, opposed the application for status quo.
Mr. Tijani Ghazali, SAN, who represented the attorney-general for his part, supported the application for status quo to be maintained.
TheNews reported that before adjourning the matter till September 16, 2021, the appellate court gave the applicants two days to file their written addresses on the pending applications; and two days also for the respondents to file. But the applicant was given one day to reply on points of law.
The matter has been adjourned until Sept. 16.