Saturday 12 April 2014

Supreme Court slams Lagos State over VAT suit against FG

The Supreme Court, yesterday, declined jurisdiction to adjudicate on a suit that was filed before it by the Lagos State government, challenging the powers of the Federal Government to assess and collect taxes on the supply of goods and services rendered within the state.

A seven-man panel of Justices of the apex court, in their unanimous judgment, dismissed the suit on the premise that the subject matter bothered on acts of a federal agency, saying in such cases, the Supreme Court, lacks the powers to invoke its original jurisdiction as it was prayed to do by the Lagos state government.

Specifically, the Lagos State Government had in the suit which was filed by its Attorney General, prayed the Supreme Court to abolish the Value Added Tax Act, which it said infringed on its power to assess and collect taxes on the supply of goods and services within its territory.

It further asked the court to declare that the VAT Act was outside the legislative competence of the National Assembly and is therefore unconstitutional, null and void and of no effect whatsoever.
Besides, Lagos state, prayed the apex court to invoke section 22 of the Supreme Court Act, and determine all the substantive issues it raised in the suit.

However, the federal government, in a preliminary objection it filed against the suit, insisted that the apex court was bereft of the jurisdiction to entertain the matter, even as it accused Lagos state of abusing the judicial process.

FG, alleged that Lagos state had filed the same suit before different courts, as well as, sought for the same reliefs.
Meanwhile, in the lead judgment prepared by Justice M. D. Mohammed, the Supreme Court, upheld the objection by FG, describing the suit as an abuse of court process.

The panel, held that instead of appealing previous judgments of the lower courts on the matter, the plaintiff, approached the apex court with the request that it should conduct de-novo (fresh) hearing on the case.
The apex court therefore branded the suit as “an abuse of court process in the extreme,” and struck it out, adding that the action of the plaintiff amounted to “forum shopping.”

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