The Court of Appeal, Abuja Division, has ordered all parties to maintain the status quo over the controversy surrounding implementation of Value Added Tax by Rivers and Lagos States.
The order is coming in shortly after Lagos signed its own VAT bill after Rivers State.
The court order was specifically directed against the Rivers Government, the Federal Inland Revenue Service (FIRS) and the Attorney-General of the Federation.
Lagos has joined the case as an interested party.
The appeal court ruled that the parties should maintain the status quo, pending the hearing and determination of applications before it in respect of the Valued Added Tax (VAT).
The Federal High Court, Port Harcourt, had on Aug. 9 declared that it was the Rivers Government, and not FIRS that should collect VAT and Personal Income Tax in that state.
Governor Nyesom Wike had gone ahead to sign a new VAT law and enjoined companies to pay the tax into his state treasury.
Lagos also followed, with Governor Sanwo-Olu signing the law on Friday.
Over N500 Billion is collected as VAT yearly in Lagos, but Lagos only gets a pittance in return.
The three-man panel of Appeal Court justices led by Justice Hassan Tsammani ordered all parties to maintain the status quo and refrain from taking any action that would give effect to the judgment of the Federal High Court, Port Harcourt.
Justice Tsammani held that since all parties in the matter had submitted themselves before the court, it was proper and the law for the court to preserve the res (subject matter) from being rendered nugatory.
Consequently, the court held that parties should refrain from giving effect to the judgment of the trial court in Port Harcourt pending the hearing and determination of the application by FIRS to stay execution of the trial court’s judgment.
Parties are also to maintain the status quo pending the hearing of an application by the Attorney-General of Lagos State to be joined as a party in the matter.
Counsel to the appellant/applicant, Mr Mahmud Magaji (SAN), made an oral application for an order that status quo be maintained pending the hearing and determination of the motion for injunction and stay.
However, Mr Emmanuel Ukala (SAN), counsel to Rivers government, and Mr Moyosore Onigbanjo (SAN), counsel to Lagos State Government, both opposed the application for status quo.
Mr Tijani Ghazali (SAN), who represented the attorney-general for his part, supported the application for the status quo to be maintained.
The applicants have been given two days to file their written addresses in respect of the pending applications.
The respondents have also been given two days to file, and the applicant has one day to reply on points of law.
The matter has been adjourned until Sept. 16.
