By Ifeanyi Akubuo Esq
![image](/2021/07/Justice-Ejembi-Eko-1.jpg")
![image](/2021/08/lawp.jpg")
- INTRODUCTION:
It is pertinent to notify and update the knowledge of the
Public, Tax practitioners & Stakeholders on the valid positions of
various judicial pronouncements on the validity of VAT Act as
administered by FIRS.
![image](/2021/07/escrow-service1.jpg")
This review is necessitated by the Judgement delivered by
Justice Stephen Pam of the Federal High Court, Port Harcourt
Division, Rivers State in the case of Attorney General of Rivers
State v. Federal Inland Revenue Service and the Attorney General of
the Federation (Suit No: FHC/PH/CS/149/2020) where it was held that
the Rivers State Government, and not the Federal Government, is
empowered to collect VAT and Personal Income Tax (PIT) in the
State, thereby declining the administration of VAT Act by FIRS
invalid and unconstitutional.
- ANOTHER JUDGMENT OF FEDERAL HIGH COURT VALIDATING THE
VAT ACT.
There are plethora of Court Judgements by the same Courts of
coordinate jurisdictions, (Federal High Court), on
constitutionality and validity of VAT Act as administered by the
FIRS and its validity. The following cases has upheld the
validity and constitutionality of the VAT Act;
One of such case which I was privilege to be the Counsel for the
FIRS is the case of Incorporated Trustees of Kogi State
Hoteliers Association v. Kogi State Board
of Internal Revenue, FIRS & Another. SUIT NO:
FHC/LKJ/CS/58/2018. The Court rightly held thus:
“Value Added Tax Act Cap. IV LFN, 200 was originally
Value Added Tax Decree No. 102 of 1993 promulgated by the Federal
Military Government and remained in effect with necessary
amendments until coming into effect of the 1999 Constitution as
canvassed by the 1st and 2nd Defendants’
Counsel. The Act is an existing law by virtue of section 315(a) of
the 1999 Constitution which provides thus: ‘Subject to the
provisions of the Constitution, an existing law shall have effect
with such modifications as may be necessary to bring it into
conformity with the provision of this Constitution and shall be
deemed to be: An Act of National Assembly to the extent that it is
a law with respect to any matter on which the National Assembly is
empowered by this Constitution to make laws.’
The Court went further to state thus:
“Section 4 of the 1999 Constitution, the National
Assembly has power to make laws for the Federal Government for
collection of taxes. The Value Added Tax Act is an existing law by
virtue of the Constitution. By section 7 of the Value Added Tax Act
which provides thus:
- The Tax shall be administered and managed by the
Federal Board of Inland Revenue (in the Act referred to as “the
Board”). - The Board may do such thing as it may deem
necessary and expedient for the assessment and collection of the
tax and shall account for all amounts so collected in accordance
with provisions of the Act.”
Thus the body empowered to manage VAT Tax is the
Federal Board Inland Revenue which in this case is the
3rd Respondent. By section 4(5) of the CFRN 1999 (as
Amended):
‘If any law enacted by the House of Assembly of a
State is inconsistent with any law validly made by the National
Assembly the law made by the National Assembly shall prevail and
that other law shall to the extent of inconsistency be
void’
I agree with learned Counsel of the 3rd
Respondent that in line with this provision since Value Added Tax
is tax law of National Assembly, the inconsistent of Kogi State
taxation of Consumable Goods and Services (in Hotels, Restaurant,
etc.) law 2015 is void to the extent of
inconsistency”
The Court concluded by stated thus:
“The conclusion is that the Value Added Tax Act Cap
VI LFN 2004 having impose tax on the same goods and service impose
in Kogi State Tax on consumable Goods and Services (in Hotels
Restaurant etc.) Law, 2015. The Value Added Tax Prevails over the
Kogi State Law as the Value Added Tax Act is deemed to have covered
the field and I so hold”
- CAN THE JUDGMENT OF FEDERAL HIGH COURT OF PART-HARCOURT
DIVISION IN SUIT NO: FHC/PH/CS/149/2020
(INVALIDATE THE VAT ACT) SET ASIDE THE JUDGMENT OF SAME FEDERAL
HIGH COURT OF LOKOJA DIVISION IN SUIT NO: FHC/LKJ/CS/58/2018
(VALIDATE THE VAT ACT)?
It is a trite law, that a Judge of a Court cannot by its
Judgment set aside or invalidate what another judgment of
coordinate jurisdiction has validated. The two judgments will
rather stands independent until the appellate Court decide
otherwise. Honorable Justice BOLOUKUROMO MOSES UGO, J.C.A.
(Delivering the Leading Judgment) in THE ECONOMIC AND
FINANCIAL CRIMES COMMISSION v. MR. AYODELE FAYOSE & ANOR (2018)
LPELR-44131(CA) held thus:
“First, it must be realized that the jurisdiction of
the Court to set aside its judgment or orders or that of a Court of
coordinate jurisdiction is, as Nnaemeka-Agu J.S.C. put it in Okoye
v. Nigerian Construction & Furniture Co. Ltd (1991) 6 NWLR (PT 199)
501 at 540 paras A-B, ‘not only rare but special’. It has to be so
because the right to set aside orders of Court is ordinarily the
prerogative of an appellate Court, which itself operates on the
well-tested reasoning that two heads (sometimes even more) are
better than one when it comes to deciding the wrongness of the
decision of a judge. That is why even this Court despite its
superiority to the High Court and our assumed superior knowledge to
the Judges of High Court, only sits in panels of at least three
when hearing appeals from the one-man decisions of High Courts and
other subordinate Courts. The same thing applies to our senior
brothers upstairs who must also sit in a panel of at least five
Justices to hear appeals from our three-man decisions. The
exception to this rule, that is, the ‘rare and special
jurisdiction’ of a Court to set aside the judgment and orders of a
Court of coordinate jurisdiction, rather runs on the footing that
where a judgment is patently a nullity, it is as if it never
existed in the first place so the same judge or even a brother
Judge of the same Court can make a declaration to that effect and
an appeal is not necessary.”
- CONCLUSION:
Accordingly, it is evident that there are conflicting Judgements
of the Federal High Courts, on the same subject matter of the
constitutionality and validity of VAT ACT, as administered by the
Federal Inland Revenue Service (FIRS). The latest Rivers State
Judgement of Federal High Court Part Harcourt Division
IN SUIT NO: FHC/PH/CS/149/2020
did not set aside or nullify the earlier Judgement of the Federal
High Court, Kogi Judicial Division IN SUIT NO:
FHC/LKJ/CS/58/2018. In my view, this conflict of
judgements can only be resolved on Appeal by the Court of Appeal
decision on any or both of the judgment. Once the FIRS filed a
Notice of Appeal and Stay of Execution on the Judgement and granted
by Court. Both parties in the suit will maintain status quo. So it
will be advisable for tax payer who are subject to VAT Act to
continue paying or collecting VAT until this matter is finally
decided upon by the apex Court.
Written By Ifeanyi Akubuo Esq. (LL.B, B.L, MPA & ACTI) E-mail:
akubuoifeayi@yahoo.com, Phone:
08033154535
By Ifeanyi Akubuo Esq
- INTRODUCTION:
It is pertinent to notify and update the knowledge of the
Public, Tax practitioners & Stakeholders on the valid positions of
various judicial pronouncements on the validity of VAT Act as
administered by FIRS.
This review is necessitated by the Judgement delivered by
Justice Stephen Pam of the Federal High Court, Port Harcourt
Division, Rivers State in the case of Attorney General of Rivers
State v. Federal Inland Revenue Service and the Attorney General of
the Federation (Suit No: FHC/PH/CS/149/2020) where it was held that
the Rivers State Government, and not the Federal Government, is
empowered to collect VAT and Personal Income Tax (PIT) in the
State, thereby declining the administration of VAT Act by FIRS
invalid and unconstitutional.
- ANOTHER JUDGMENT OF FEDERAL HIGH COURT VALIDATING THE
VAT ACT.
There are plethora of Court Judgements by the same Courts of
coordinate jurisdictions, (Federal High Court), on
constitutionality and validity of VAT Act as administered by the
FIRS and its validity. The following cases has upheld the
validity and constitutionality of the VAT Act;
One of such case which I was privilege to be the Counsel for the
FIRS is the case of Incorporated Trustees of Kogi State
Hoteliers Association v. Kogi State Board
of Internal Revenue, FIRS & Another. SUIT NO:
FHC/LKJ/CS/58/2018. The Court rightly held thus:
“Value Added Tax Act Cap. IV LFN, 200 was originally
Value Added Tax Decree No. 102 of 1993 promulgated by the Federal
Military Government and remained in effect with necessary
amendments until coming into effect of the 1999 Constitution as
canvassed by the 1st and 2nd Defendants’
Counsel. The Act is an existing law by virtue of section 315(a) of
the 1999 Constitution which provides thus: ‘Subject to the
provisions of the Constitution, an existing law shall have effect
with such modifications as may be necessary to bring it into
conformity with the provision of this Constitution and shall be
deemed to be: An Act of National Assembly to the extent that it is
a law with respect to any matter on which the National Assembly is
empowered by this Constitution to make laws.’
The Court went further to state thus:
“Section 4 of the 1999 Constitution, the National
Assembly has power to make laws for the Federal Government for
collection of taxes. The Value Added Tax Act is an existing law by
virtue of the Constitution. By section 7 of the Value Added Tax Act
which provides thus:
- The Tax shall be administered and managed by the
Federal Board of Inland Revenue (in the Act referred to as “the
Board”). - The Board may do such thing as it may deem
necessary and expedient for the assessment and collection of the
tax and shall account for all amounts so collected in accordance
with provisions of the Act.”
Thus the body empowered to manage VAT Tax is the
Federal Board Inland Revenue which in this case is the
3rd Respondent. By section 4(5) of the CFRN 1999 (as
Amended):
‘If any law enacted by the House of Assembly of a
State is inconsistent with any law validly made by the National
Assembly the law made by the National Assembly shall prevail and
that other law shall to the extent of inconsistency be
void’
I agree with learned Counsel of the 3rd
Respondent that in line with this provision since Value Added Tax
is tax law of National Assembly, the inconsistent of Kogi State
taxation of Consumable Goods and Services (in Hotels, Restaurant,
etc.) law 2015 is void to the extent of
inconsistency”
The Court concluded by stated thus:
“The conclusion is that the Value Added Tax Act Cap
VI LFN 2004 having impose tax on the same goods and service impose
in Kogi State Tax on consumable Goods and Services (in Hotels
Restaurant etc.) Law, 2015. The Value Added Tax Prevails over the
Kogi State Law as the Value Added Tax Act is deemed to have covered
the field and I so hold”
- CAN THE JUDGMENT OF FEDERAL HIGH COURT OF PART-HARCOURT
DIVISION IN SUIT NO: FHC/PH/CS/149/2020
(INVALIDATE THE VAT ACT) SET ASIDE THE JUDGMENT OF SAME FEDERAL
HIGH COURT OF LOKOJA DIVISION IN SUIT NO: FHC/LKJ/CS/58/2018
(VALIDATE THE VAT ACT)?
It is a trite law, that a Judge of a Court cannot by its
Judgment set aside or invalidate what another judgment of
coordinate jurisdiction has validated. The two judgments will
rather stands independent until the appellate Court decide
otherwise. Honorable Justice BOLOUKUROMO MOSES UGO, J.C.A.
(Delivering the Leading Judgment) in THE ECONOMIC AND
FINANCIAL CRIMES COMMISSION v. MR. AYODELE FAYOSE & ANOR (2018)
LPELR-44131(CA) held thus:
“First, it must be realized that the jurisdiction of
the Court to set aside its judgment or orders or that of a Court of
coordinate jurisdiction is, as Nnaemeka-Agu J.S.C. put it in Okoye
v. Nigerian Construction & Furniture Co. Ltd (1991) 6 NWLR (PT 199)
501 at 540 paras A-B, ‘not only rare but special’. It has to be so
because the right to set aside orders of Court is ordinarily the
prerogative of an appellate Court, which itself operates on the
well-tested reasoning that two heads (sometimes even more) are
better than one when it comes to deciding the wrongness of the
decision of a judge. That is why even this Court despite its
superiority to the High Court and our assumed superior knowledge to
the Judges of High Court, only sits in panels of at least three
when hearing appeals from the one-man decisions of High Courts and
other subordinate Courts. The same thing applies to our senior
brothers upstairs who must also sit in a panel of at least five
Justices to hear appeals from our three-man decisions. The
exception to this rule, that is, the ‘rare and special
jurisdiction’ of a Court to set aside the judgment and orders of a
Court of coordinate jurisdiction, rather runs on the footing that
where a judgment is patently a nullity, it is as if it never
existed in the first place so the same judge or even a brother
Judge of the same Court can make a declaration to that effect and
an appeal is not necessary.”
- CONCLUSION:
Accordingly, it is evident that there are conflicting Judgements
of the Federal High Courts, on the same subject matter of the
constitutionality and validity of VAT ACT, as administered by the
Federal Inland Revenue Service (FIRS). The latest Rivers State
Judgement of Federal High Court Part Harcourt Division
IN SUIT NO: FHC/PH/CS/149/2020
did not set aside or nullify the earlier Judgement of the Federal
High Court, Kogi Judicial Division IN SUIT NO:
FHC/LKJ/CS/58/2018. In my view, this conflict of
judgements can only be resolved on Appeal by the Court of Appeal
decision on any or both of the judgment. Once the FIRS filed a
Notice of Appeal and Stay of Execution on the Judgement and granted
by Court. Both parties in the suit will maintain status quo. So it
will be advisable for tax payer who are subject to VAT Act to
continue paying or collecting VAT until this matter is finally
decided upon by the apex Court.
Written By Ifeanyi Akubuo Esq. (LL.B, B.L, MPA & ACTI) E-mail:
akubuoifeayi@yahoo.com, Phone:
08033154535