The Court of Appeal yesterday rejected a request by Rivers and Lagos states government for the appointment of receiver or manager for the purpose of collecting and keeping Value Added Taxes (VAT) in place of the Federal Inland Revenue Services (FIRS) pending the resolution of all legal disputes in the matter.
Also, the court reserved its ruling on the application filed by Lagos State government to join in the appeal.
The two states separately canvassed that the order of status quo ante bellum granted on September 10 in favour of FIRS to continue the collection be put on hold in view of the appeal already logged at the Supreme Court against the order.
The counsel to Rivers State, Chief Ifedayo Adedipe SAN in his oral application pleaded with the appellate to exercise its power under Order 4 Rule 6 of the Court of Appeal to appoint a Receiver or Manager to take custody of the VAT in the interest of justice to parties in the matter.
The attorney-general of Lagos, Mr Moyosore Onigbanjo SAN who stood for his state toed the path of Rivers in canvassing that the court be fair and just in pending appeal.
Onigbanjo specifically asked the Appeal Court to restrain FIRS from further collecting the tax and replace it with a receiver or manager that will act for patties that are locked in the legal battle.
The Lagos attorney-general predicated his expressed fear of unjust treatment on the fact that FIRS apart from collecting the tax has been sharing It among the 36 states and the Federal Capital Territory (FCT) despite the pendency of the legal tussle.
However, the presiding justice, Hamma Simon Tsanami asked the two states to make their request formal by making it in writing.
Justice Tsanami, presiding over the 3-man panel of the appellate court, reserved ruling after parties had argued the joinder application filed by the attorney general of Lagos State.
The attorney general of Lagos State, told the court that the application was essentially seeking leave for Lagos State to be joined as respondent in the appeal.
He adopted all his processes and urged the court to allow the applicant to be joined.
He argued that the principle of joinder application is that the party seeking to be joined is a necessary party, and the party’s interest will be legally or financially affected by the outcome of the legal action.
He submitted that the party seeking to be joined would be bound by the decision arising from the action.
He argued that the constitution empowers states as federating units to collect taxes, insisting that the Federal Inland Revenue Service themselves in their counter affidavit recognised that Lagos State is an interested party.
The appellant (FIRS), according to Onibanjo, made allegations against Lagos State government, and therefore it was not out of place for the applicant to be joined.
He argued further that in accordance with Section 36 of Constitution, Lagos State should be accorded an opportunity to defend the allegations in the spirit of fair hearing.
“You cannot shave a man’s head at his back,” the Lagos AG posited.
In his response, Ifedayo Adedipe, SAN, counsel for the 1st respondent (Rivers State) aligned himself with the submission of the Lagos AG.
An effort by the attorney general of the federation and minister of justice, who is the 2nd respondent to oppose the joinder application was rejected as being incompetent.
Represented by Tijani Ghazali SAN, an acting director civil appeals, Federal Ministry of Justice, the court agreed with the objection raised by the Lagos AG that the AGF did not file a counter affidavit and his purported written address was filed out of time.
On his part, Mahmud Magaji SAN, counsel to the appellant urged the court not to join Lagos State government in the appeal.