VAT: S/Court throws out Lagos suit

The Supreme Court, last Friday, threw out a suit filed by the Lagos State Government challenging the power of the Federal Government to assess and collect taxes on supply of all goods and services within its constitutionally defined jurisdiction.

In a judgement by the full panel of the apex court, Justice Dattijo Mohammed upheld the Preliminary Objection filed by the Federal Government and dismissed the suit on the ground that the court lacked jurisdiction to entertain it.

Other Justices on the panel were Mahmud Mohammed, John Afolabi Fabiyi, Nwali Ngwuta, Mary Ukaego Peter-Odili, Kudirat Kekerer-Ekun and John Inyang Okoro.

The Supreme Court maintained that rather than coming before it to appeal the earlier rejection of the suit at the high court and court of appeal, the plaintiff approached the apex court asking it to invoke its original jurisdiction and hear the matter.

The court, however, described the suit as “an abuse of court process in the extreme,” adding that the action of the plaintiff amounted to “forum shopping.”

Having declined jurisdiction to hear the suit, the Supreme Court held that it was not necessary to determine the issues raised by the plaintiff in the suit.

Justice Mohammed stated: “It is accordingly unnecessary to delve into the issues having declined jurisdiction. The preliminary objection raised against the competence of the plaintiff’s suit succeeds and the plaintiff’s suit is hereby struck out.”

Lagos State has approached the court seeking among other reliefs, a declaration of the court to abolish the Value Added Tax VAT Act, which it said infringed on its power to assess and collect taxes on the supply of goods and services within its territory.

The Commissioner of Justice and Attorney-General of Lagos State has insisted that the Supreme Court ought to nullify the VAT Act and grant its reliefs, which, according to the brief of argument, included a declaration that the VAT Act was outside the legislative competence of the National Assembly and was, therefore, unconstitutional, null and void and of no effect whatsoever.

Reacting to the judgement, counsel to the Federal Government Adedara Adedeji applauded the apex court for upholding its preliminary objection by dismissing the suit.