the Rivers State Government from collecting Value Added Tax, VAT in the
State.
FIRS in suit no FHC/PH/CS/149/2020 had through a motion on notice
applied for a Stay of Execution on the earlier judgement of the court
presided over by Justice Stephen Dalyop Pam, that declared that it was
the constitutionally role of State governments to collect VAT and not
FIRS.
Justice Stephen Dalyop Pam, in his ruling on FIRS application for a stay
of execution, said the granting the application would negate the
principle of equity.
He noted that the Rivers State Government through the State Assembly,
has duly enacted Rivers State Value Added Tax No. 4, 2021, which makes
it a legitimate right of the state to collect VAT.
According to the Judge, every court in the country is constitutionally
mandated to obey every legislation enacted by both the National and
State Assembly respectively.
He explained that the Rivers State government law on VAT remains valid
until it has been set aside by a court of competent jurisdiction.
Justice Pam stated that since FIRS was Ab initio acting in error by
collecting VAT in Rivers State, and has huge burden of refund of those
monies, there was need not to allow it incur further liability.
The Judge declared that the FIRS application is refused and dismissed in
the light of the fact that all subsisting law concerning the collection
of VAT stands in favour of the Rivers State Government.
Earlier, Justice Pam had read a who presided read a letter that FIRS
lawyers had served the court seeking for stay of any ruling on their
application.
But, in the absence of any requisite document that ought to have been
attached to the letter, the Judge dismissed the letter.
Speaking on the implication of the ruling, the counsel for Rivers State
Government, Mark Agwu said the Rivers State Government is still entitled
to collect VAT within the State.
“Today, the court has delivered its ruling dismissing the said
application for stay of execution, though without cost. In fact, the
court’s reason is that if it should grant stay, it is more or less like
over- ruling itself.
“And then, since the court is empowered to recognize all laws enacted by
the National Assembly or the State Houses of Assembly, therefore, that
law(Rivers) stands, it is a substantive law.
“Therefore, the issue of collection of VAT as it stands today, Rivers
State Government is still entitled to so collect. That is were we are
today.”
In his reaction, Rivers State Commissioner for Finance, Budget and
Economic Planning, Isaac Kamalu said the decision by the Lordship has
confirmed the position, both constitutionally and legally, that Rivers
State has the authority to collect Value Added Tax (VAT).
“Well, first we need to thank God. Second, we need to thank the Judge
for the courage. If you recall, the court has already declared that it
is the Rivers State Government that has the constitutional
responsibility for the collection of Value Added Tax.
“Following that decision of the High Court, which is binding on all
parties and institutions, the Rivers State Government and the State
Legislature has the Value Added Tax Law of Rivers State No. 4 of 2021 in
force too.”
“I think the decision by the Lordship this morning is to confirm the
position, both constitutionally and legally that the State has the
authority to collect Value Added Tax (VAT).”
Lead counsel to Federal Inland Revenue Services (FIRS) Reuben Wanogho
said the court has delivered its ruling on the basis of how it saw the
facts of the case before it.
According to him, they do not agree with the ruling and already resolved
to take all necessary steps to challenge it.