Rivers Government Drags FG To Supreme Court Over VAT

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The government of Rivers State has taken the federal government to the Supreme Court.

The suit was filed by the Attorney-General of Rivers after the state was stopped by the of Appeal from collecting Value Added Tax, according Vanguard.

The Rivers state Attorney-General urged the Supreme to set aside the decision of the Court of Appeal that ordered it to maintain status quo on the collection of Value Added Tax, VAT, pending the determination of an appeal that was lodged by the Federal Inland Revenue Service, FIRS.

The State, in its 10 grounds of appeal, a copy of which was sighted by Vanguard on Tuesday, is equally praying the apex to order that the substantive appeal by the FIRS marked CA/PH/282/2021, and all other processes therein, be heard and determined by a new panel of the Court of Appeal.

It maintained that the three-man panel of Justices of the of Appeal led by Justice Haruna Tsammani, had in the ruling they delivered last Friday, erred in law when they relied on the provisions of Section 6(6) of the 1999 Constitution and the inherent jurisdiction of the appellate court, to order all the parties to maintain status quo on the VAT dispute.

It argued that the of Appeal legal lacked the powers to restore the parties to the position they were before the judgement of the Federal High Court in Port Harcourt in suit No. FHC/PH/CS/149/2020, which was delivered on August 9.

“The Learned Justices of the of Appeal In relying on the inherent jurisdiction of the court to make the order on the subject matter of this Appeal, failed to appreciate that the inherent jurisdiction of the court cannot be applied in contravention of statutory provisions.

“The Learned Justices of the of Appeal failed to appreciate the nature of inherent jurisdiction and that it cannot be invoked to circumvent the clear provisions of the statute as it was done with regards to Order 6 Rule 1 of the Court of Appeal Rules 2016 in this case”.

It argued that the appellate panel failed to take into account a decision of the Supreme Court in SHUGABA V. UNION BANK [1999],11 NWLR (pt. 627), page 459, to the effect “that no court has an inherent jurisdiction (except in extreme circumstances) to set aside the of discretion of another with regards to order made in respect of an application for stay of execution”.

More so, the state argued that the Court of Appeal panel erred in law when they wrongly assumed jurisdiction to entertain on the oral application that counsel of the FIRS made for the maintenance of status quo by parties in the dispute, in spite of the fact that condition precedent for the invocation of the inherent jurisdiction of the appellate court was not fulfilled by the 1st Respondent (FIRS).

Rivers State contended that the appellate court, by proceeding “to make a far-reaching decision”, based on the oral application by FIRS, denied its a fair hearing.

It said the panel, by relying on the oral application to order the maintenance of status quo, which effectively operated as a stay of execution and as an injunction against the declaratory orders of the Federal High Court, occasioned a miscarriage of justice, to its prejudice.

Consequently, it prayed the apex court to allow the appeal, set aside the decision of the court of appeal on maintenance of the status quo, and further dismiss the oral application that was made by the FIRS.

It also prayed the apex court to order that the appeal the FIRS filed against the High Court judgement that stripped it of the right to collect VAT in the state, be heard by a fresh panel.

Aside from the FIRS, the Attorney-General of the Federation was cited as Respondents in the appeal that Rivers State entered through its team of lawyers led by Emmanuel Ukala, SAN.

It will be recalled that the Court of Appeal in Abuja had last Friday, stopped both Rivers and Lagos States from proceeding to collect VAT in their states, pending the determination of the appeal by FIRS.

The appellate court said the order was to preserve the ‘Res’ (subject matter) of the appeal before it.

Specifically, it ordered all the parties that have subjected themselves before it to “refrain from taking any action to give effect to the judgement of the Federal High Court”, which gave Rivers State Government the right to collect VAT revenue, instead of the FIRS.

The Justice Tsammani-led panel made the order after it deferred the hearing of an application Lagos State filed to be joined as an interested party in the matter, till September 16.

Lagos State had through its Attorney-General, Moyosore Onibanjo, SAN, protested against the issuance of an order for the maintenance of the 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 by FIRS.

Before adjourning the joinder application by Lagos State for hearing, the appellate court gave both the Appellant (FIRS) and the Respondents (Rivers and AGF), two days each to file their responses.

The appellate court panel said it saw the need to preserve the ‘Res’ of the appeal before it, noting that “the case is of very serious national importance”.