September 06, (THEWILL) – A Federal High Court sitting in Port Harcourt, Rivers state on Monday dismissed a suit seeking to stop River state’s collection of value-added tax.
The suit was filed by the Federal Inland Revenue Service seeking a Stay of Execution on a previous judgement by the court that stated the VAT collection is the constitutional preserve of state governments.
The presiding judge, Justice Stephen Dalyop Pam, in his judgement said granting the FIRS’ prayer would negate the principle of equity.
The court noted that in as much as the state government and the state legislature has enacted a law in respect of Vat collection, courts were bound to obey laws.
According to the ruling, the law, Rivers State Value Added Tax No. 4, 2021, remained valid until set aside by a court of competent jurisdiction..
Commenting on the ruling, Counsel for Rivers State Government, Mark Agu, commended the court for standing for justice, noting that the state assembly had already made a standing law on VAT.
Agu disclosed that the FIRS had approached the court with two prayers but that they withdrew the first prayer seeking for injunction and wanted the court to stay the execution of that judgement.
He said: “The first defendant, FIRS, sent their appeal against the judgement of the Honourable court delivered wherein the court allowed the Rivers State Government to collect their VAT.
“Subsequently after the judgement Rivers State has its own law on that, the Rivers State Law on VAT No. 4, 2021. Having appealed, they were asking for an injunction and secondly asking for stay on the judgement.
“Today, the court has delivered its ruling dismissing the said application for stay, though, without cost.
“The court’s reasoning is that if it should grant stay it is more or less like overruling itself and the court is empowered to recognize all laws enacted by the national assembly or the state house of assembly, therefore the law stands as substantive.
“Therefore the issues of collection of VAT as it stands today Rivers State is still entitled to still collect.”
But, counsel for FIRS, Reuben Wanogho, expressed displeasure with the stand of the court, noting that FIRS would not hesitate to appeal the ruling.
Wanogho said: “The court has delivered its ruling on the bases of how it saw the facts of the case. We do not agree with the ruling and we will take all necessary steps to challenge it. That is why the appellate System is there.
“The appellate System is there to enable us ventilate out grievances if for any reasons the court makes a pronouncement me we do not agree with it.
“For sure we feel that the ruling should have gone in our favour but, the court has taken a position against us, so we will do the needful by taking it up immediately before the court of appeal.
“We will challenge it. And we are hopeful that at the court of appeal we should be able to find our way. The appeal system is there to correct errors.
“The natural consequences of the ruling is that the Rivers State Government will be collecting the VAT, but we will take steps to ensure that we amelioration situation as quickly as possible.”
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