The application filed by the Federal Inland Revenue Service (FIRS) to stop Rivers State Government from collecting Value Added Tax (VAT) in the state, has met a brickwall, as a Federal High Court sitting in Port Harcourt has dismissed the application.
The Court held that the Rivers State government law on VAT remains valid until it has been set aside by a court of competent jurisdiction.
The 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 constitutional role of state governments to collect VAT and not FIRS.
Justice Pam, in his ruling, said 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.
Justice Pam stated that since FIRS was ab initio acting in error by collecting VAT in Rivers State, and has a huge burden of refund of those monies, there was need not to allow it to incur further liability.
The judge declared that the FIRS application is refused and dismissed in 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 letter that FIRS lawyers had served the court seeking for the 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 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 a stay, it is more or less like overruling itself.
