…We’ll reassess the situation – LASG
BEVERLY HILLS, CA, April 12, (THEWILL) – A suit brought against the Federal Government by the Lagos State Government challenging the former’s power to collect Value Added Tax (VAT) in the state was quashed by the Supreme Court on Friday.
In throwing out the suit,the apex court declined jurisdiction over the suit and upheld the objection filed by the Federal Government.
In the suit, the state Attorney General and Commissioner for Justice, Mr. Ade Ipaye, had sought a declaration that the VAT Act is unconstitutional to the extent that it provides for the imposition and collection of taxes on goods and services in Lagos and other states, areas outside the legislative competence of the National Assembly.
He therefore prayed for a perpetual injunction restraining the Federal Government, by itself, its servants or any of its agencies from continuing to give effect to the provisions of the VAT Act to impose and collect taxes on goods within Lagos State.
The suit had the Attorney General of the Federation (AGF), Mr. Mohammed Adoke (SAN) as the first defendant and the Attorneys General of the other 35 states as co-defendants,
However, in its ruling on the matter on Friday, the Supreme Court held that the reliefs claimed by Lagos State did not fall within the provision of Section 232(1) of the Constitution, to enable the court exercise its original jurisdiction.
The lead judgment delivered by Justice Mahmud Mohammed upheld the objection by the AGF and held that, since the reliefs sought in the suit were not against the Federation of Nigeria or any state or states of the federation as constituent units of the federation, the suit was not qualified to ignite its original jurisdiction to hear.
Justices John Afolabi Fabiyi, Sylvester Ngwuta, Mary Ukaego Peter-Odili, Musa Dattijo Mohammad, Kudirat Kekere-Ekun and John Inyang Okoro, who were on the panel that heard the case, also agreed with the lead judgment.
The apex court also held that the suit was an abuse of court process because there were similar cases existing on the same subjected matter in both the trial and lower courts.
It noted that the Court of Appeal decided one of such cases on July 13, 2007 but which decision the plaintiff failed to appeal, but instead, chose to initiate this fresh suit before it (Supreme Court) in 2008 exactly one year after the Court of Appeal judgment.
The suit was therefore struck out for lack of jurisdiction.
“It is quite clear that for this court to exercise its original jurisdiction under that section – Section 232(1) – the plaintiff’s action against the 1st defendant (AGF), this court has to be satisfied that the dispute for the adjudication in the action is one between the plaintiff, Lagos State of Nigeria, as a constituent unit of the Federation of Nigeria and the Federation of Nigeria, also as a distinct unit under the Constitution.
“The words used in Section 232(1) of the Constitution, describing the parties are ‘the federation,’ ‘a state’ and ‘states.’ In other words, the dispute must be between the Federation and a state or between the federation and more than one state or between a state or states in their capacities as members of the federating units of the Federation of Nigeria.
“The section, in my view, is not expected to provide avenue for the resolution of disputes between the Federal Government of Nigeria and a state government of Nigeria or between a state government and another state government of Nigeria, all of which are only products of elections.
“Therefore, since the reliefs claimed by the plaintiff, particularly the injunctive relief is against the Federal Government of Nigeria, its servants and its agencies, the relief is not being against the Federation of Nigeria or any state or states of the federation as constituent units of the federation, is not within the purview of Section 232(1) of the 1999 Constitution to confer original jurisdiction on this court,” the court held.
In also upholding the second leg of the AGF’s objection, the apex court held the fact that there existed, and still exists in the trial and lower court, suits relating to issues raised in this suit, it amounted to an abuse of court process.
“From the undisputed facts on the pending matters the plaintiff has at the High Court and the Court of Appeal, listed in paragraphs 15 and 17 of the affidavit in support of the originating summons, seeking the declaratory reliefs touching on the power of the National Assembly to legislate on certain provisions of the VAT Act, some which reliefs had been granted already or refused by those courts, resulting in pending appeals at the Court of Appeal, the action of the plaintiff, in refusing to appeal against that judgment of the Court of Appeal of July 13, 2007 affirming the decision of the Federal High Court on the validity or otherwise of the provisions of the VAT Act complained of, only to file a fresh action in this court, after more than one year of the delivery of the judgment of the Court of Appeal seeking same reliefs sought at the High Court and the Court of Appeal, is certainly an abuse of the process of this court,” the court held.
Lagos State Attorney General ,Ipaye, in his reaction to the judgement, said since the Supreme Court had struck the case out, the state would reassess the situation and take the necessary steps.
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