Nigeria: Rivers Governor Wike Goes to  Supreme Court Over VAT, Wants Stay of Execution Nullified

The Rivers State government on Tuesday asked the Supreme Court of Nigeria to quash the ruling of the Court of Appeal, Abuja Division, which ordered parties to maintain Status Quo in a suit seeking to determine, who has the right to collect Value Added Tax (VAT) in Rivers State.

Justice Stephen Pam of a Federal High Court in Port Harcourt had in a judgment delivered on August 9, held that the Rivers State government and not the Federal Inland Revenue Service (FIRS), had the right to collect VAT and Personal Income Tax in the state.

Justice Pam, in the judgment subsequently restrained the Attorney General of the Federation and FIRS (1st and 2nd defendants) from collecting VAT in Rivers and directed the Rivers State government to take charge of the duty.

However, the appellate court in a ruling last Friday, ordered all parties that have submitted themselves before the court to maintain status quo ante bellum pending the hearing of an application seeking to stay the judgment of Justice Pam, which restrained FIRS from collecting VAT in Rivers State.

FIRS had approached the appellate to set aside the judgment of the trial court, pending the hearing of the main suit. The appellant applied for an order for stay of the Federal High Court Judgment and another order of interlocutory injunction restraining Rivers from collecting VAT in the state.

In a short ruling, a three member panel of Justices of the appellate court presided by Justice Haruna Tsammani, ordered parties to maintain status quo ante bellum and not to give effect to the judgment of Justice Pam.

The order was to enable the court hear Lagos State joinder application before taking the motion for stay and interlocutory injunction.

But displeased with the decision, Rivers, on Tuesday approached the Supreme Court to set aside the ruling of the appellate court on grounds that the lower court erred in ordering status after it earlier held that the application for joinder by Lagos State must be heard first before the motion for stay and interlocutory injunction by the FIRS.

The appellant maintained that the appellate court lacks the powers to set aside its own judgment, which held that the Lagos application for joinder must be taken before any other application.

They further argued that ordering status quo ante bellum amounts to granting the reliefs being sought by the FIRS, when the main application has not been heard and determined.

Among the reliefs being sought was an order dismissing the oral application for interim injunction and another order excusing the panel, which granted the status quo from further hearing of the appeal.

Shortly after the court held that it would give priority to the Lagos motion and adjourned for its hearing, counsel to the FIRS, Mr Mahmud Magaji, SAN, made an oral application for interim injunction so as to preserve the res (revenue collection – the main issue).

Although this position was opposed by counsel to Rivers and Lagos States, who were yet to be joined as a party, the three member panel however in a unanimous decision, held that the parties must maintain status quo.

In the appeal filed by its lawyer, Mr Emmanuel Ukala, SAN, the Rivers State government argued that the appellate court erred in law, when it ordered maintenance of status quo on a case that was not perishable or has any evidence of being damaged or destroyed.

The appellant further argued that the appellate court erred in law when it went outside the reliefs sought by the respondent in its motion on notice filed August 27.

They further maintained that the court was wrong in ordering status quo ante bellum after the Rivers State House of Assembly had passed its VAT law, which was assented to by the governor, Nyesom Wike, on August 19.

They, therefore, want the court to set aside the ruling of the Justice Tsammani-led panel against the judgment of Justice Pam for being a nullity.

The appellate court had held that the right of Lagos State would be affected adversely if not heard since the appellant had already made allegations against it.

While adjourning to September 16 for the hearing of the joinder application by Lagos AG, Justice Tsammani, held that since the application for stay and interlocutory injunction could not be heard, it was only proper to preserve the ‘res’.

Invoking the powers of the court in line with section 6 of the Constitution, to preserve the res from being dissipated, the court ordered that all those that have submitted themselves before the court should maintain status quo ante bellum.

According to the ruling, all parties should refrain themselves from giving effect to the judgment of the Federal High Court, Port Harcourt delivered on August 9, which restrained the FIRS from collecting VAT in Rivers State.

He subsequently adjourned to Thursday, September 16 for the hearing of the application for joinder by the Lagos AG.

Alex Enumah in Abuja

Follow us on: