VAT dispute: Oyo seeks to join Rivers State in its suit against FG

VAT dispute: Oyo seeks to join Rivers State in its suit against FG

The ongoing legal dispute over the Value Added Tax (VAT) collection seems to have developed a new twist as the Oyo State Government has asked the Court of Appeal, sitting in Port Harcourt, to be joined in the suit instituted by the Rivers State Government against the Attorney-General of the Federation.

The suit is in respect of the bid by the Rivers government to take over the collection of VAT from the Federal Inland Revenue Service (FIRS).

According to NAN, the suit, instituted by the Attorney-General of Oyo State, Prof. Oyelowo Oyewo, is seeking an order of the Appellate Court to enable Oyo State to join the suit as an interested party. This disclosure is contained in a statement issued by the Chief Press Secretary to Governor Seyi Makinde, Mr Taiwo Adisa, on Tuesday in Ibadan, Oyo State.

What the Oyo State Government is saying

The statement reads, “In the suit, the Government of Oyo State is seeking two orders, viz: an order of the Honourable Court joining the Attorney-General of Oyo State as a respondent on the appeal with suit number FHC/PH/CS/149/2020 and appeal number CA/PH/282/2021 and any other order the Court may deem fit.

“According to the Attorney-General of Oyo State, the government of Oyo State was unaware of the suit between the Attorney-General of Rivers State and the Federal Inland Revenue Service at the Federal High Court until the judgment was delivered.

“Other grounds upon which the application was based include that the decision of the appellate court will affect the collection of VAT by the government of Oyo State, being one of the states which the judgment of the lower court recognised as entitled to collect VAT within its territorial jurisdiction.

“Oyo State Government also indicates that the applicant,  Attorney-General of the State, represents the interest of the Oyo State Government, whose interest in the collection of VAT within Oyo State will be impacted one way or another by any judgment delivered by this Honourable Court in this appeal.’’

According to the statement, the grounds claimed by the Oyo State Government include that:

“The applicant is a necessary party to this suit being a party who will be bound by the judgment of this Honourable Court in this Appeal.

“The interests of the applicant and that of the respondent in this case are similar being states within the Federal Republic of Nigeria.’’

In a 12 paragraph affidavit which was filed in support of the motion, the Oyo State Government said that it is in the interest of justice that the appellate court grants the application, adding that the joinder will not prejudice the appellants and respondents.

It stated that the state, being one of the 36 states of Nigeria, will be affected by the decision of the Appellate Court, adding that joining the state to the suit already instituted by Rivers State will help to avoid multiplicity of suits by the states against the Federal Government In a Motion on Notice, also attached to the proceedings already filed before the court, Oyo State said it relied on eight grounds and declared that the state was a necessary party to be joined since it has sufficient interest in the outcome of the appeal.

The state argued that after going through its processes, the appellate court would find that the application was necessary and that it has sufficient interest in the determination of the appeal as one of the states of the federation.

What you should know

Recall that on August 9, Justice Stephen Pam of the Federal High Court in Port Harcourt granted the Rivers State government the right to collect VAT, instead of the FIRS, paving the way for state governments to initiate the process to start VAT collection.

But the FIRS, which was displeased with the development, later approached the Court of Appeal in Abuja with a civil motion seeking a stay of the execution of the judgement granted by the court in Rivers, pending the determination of the case after a similar request was denied by Justice Pam of the Federal High Court Port Harcourt.

A three-man panel of the appellate court led by Justice Haruna Tsammani then directed all parties to maintain the status quo and refrain from taking action that would give effect to the judgement delivered by Justice Pam, pending the hearing and determination of the instant suit. In its reaction, the Rivers State government filed an appeal at the Supreme Court to challenge the ruling of the appellate court.

The Lagos State Government had also filed a suit seeking to join Rivers State in its suit against the federal government over the VAT collection.

Apart from Lagos and Rivers states, Ogun State has also started the process of passing a bill on VAT in its House of Assembly.

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