On Thursday, legal teams of Lagos and Rivers States battle with the Federal Government at the Court of Appeal in Abuja over the Value Added Tax (VAT).
Lagos and Rivers states asked the court to stop the Federal Inland Revenue Service (FIRS) from further collecting VAT pending the determination of the suit challenging the legality of its action.
The FIRS prayed the appellate court to reject Lagos’ bid to be joined in its appeal seeking to upturn the Federal High Court judgment which gave the authority for VAT collection to the Rivers State government.
In Enugu, governors of the 17 Southern states, at their third summit this year, gave their backing to the judgment allowing states to collect VAT.
FIRS appealed the August 9 judgment of Justice Steven Pam of the Federal High Court in Port-Harcourt voiding the VAT Act and holding that states could collect VAT.
Opposing Lagos’ application to be joined as a respondent in the appeal, FIRS claimed the state was not a necessary party, and that if Lagos must be joined, then the rest of the 34 states should also be joined.
Counsel for Rivers, Chief Ifedayo Adedipe (SAN), applied orally to the court to exercise its powers under Order 4 Rules 6 of the court’s Rules to appoint either a receiver or manager to take custody of the res (subject of dispute) pending the determination of the appeal.
Lagos Attorney-General, Moyosore Onigbanjo (SAN), added that the court needed to balance the equity as it relates to its earlier order directing parties to maintain status quo antebellum.
He 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 four 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?”
Justice Haruna Simon Tsanami, who led a three-member panel, directed them to make the application formal by providing the necessary facts, including ascertaining the amount being collected as VAT.
Other members of the panel are Justices Bature Gafai and Peter Affen.
The court reserved a ruling on Lagos’ application to be made a respondent.
Adedipe adopted Onignajo’s argument and urged the court to allow the application by Lagos.
Following the observation by Onigbanjo that the written address filed by the Attorney General of the Federation (AGF) was incompetent, the lawyer representing the AGF, Tijani Gazali (SAN) withdrew the address and the court struck it out.
Counsel for FIRS, Mahmud Magaji (SAN), objected to the joinder application filed by Lagos State, arguing among others, that the state was not a necessary party.
Magaji faulted the competence of the application and urged the court to discountenance it.