Maintain Status Quo – Appeal Court Orders Rivers, Lagos On VAT Collection
- Stays execution of Rivers High Court ruling
- Respite comes for FIRS
The Court of Appeal sitting in Abuja has ordered both Rivers and Lagos States governments to maintain status quo on the collection of Value Added Tax (VAT), and Personal Income Tax (PIT) pending the determination of an appeal before it by the Federal Inland Revenue Service (FIRS).
In temporarily suspending the execution of the judgment of the Federal High Court in Port Harcourt, the appellate court, the order issued on Friday is meant to preserve the ‘Res’ (subject matter) of the appeal currently before it.
The Court specifically ordered all the parties that have subjected themselves before it to “refrain from taking any action to give effect to the judgement of the Rivers State High Court”, which gave Rivers State Government the right to collect VAT revenue, instead of FIRS.
The Appellate Court’s three-man panel of Justices led by Justice Haruna Tsammani made the order after it deferred till September 16, 2021 hearing of an application filed by Lagos State to be joined as an interested party in the matter.
The Lagos State government had, through its Attorney-General, Moyosore Onibanjo (SAN), protested against the issuance of an order for the maintenance of status quo, insisting that such order could not be binding on it, since it was yet to be joined as a party in the appeal brought to the Appeal Court by the Revenue collecting agency.
According to Justice Tsanami, it was for the overriding interest of justice for the parties who submitted themselves before the court not to take further steps that would destroy the res.
The Court further ordered that status quo ante belium should be maintained pending the hearing of the motion, even as it directed the appellant to file and exchange their processes in the motion for joinder filed by Lagos state just as the respondents were equally given two days to respond.
In his ruling that threw the FIRS off balance on its revenue collection duties, Justice Stephen Pam of the Federal High Court, Port Harcourt held that the Rives State Government should henceforth be the right author to collect VAT and PIT in the state.
The court also issued an order of perpetual injunction restraining the FIRS and the Attorney General of the Federation (AGF) both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay VAT and PIT to FIRS.
Justice Pam made the assertion while delivering judgement in Suit No. FHC/PH/CS/149/2020, filed by the Attorney General for Rivers State (plaintiff), against FIRS as the first defendant and the AGF as second defendant.
