CaseLaw
A.G Lagos State V. A.G. Federation (2014) CLR 4(b) SC.
Judgement delivered on April,11th 2014
Brief
Facts
The Federal Inland Revenue Service (FIRS) a Federal Government Agency was authorized to asses, collect, administer and manage the Value Added Tax (VAT) as provided for in the Value Added Tax Act enacted in 1993.Levied on all sales and supply of goods in the federation excluding those set out in the First Schedule of the Act.
This function as set out has been carried out by FIRS who have collected tax and shared among all states of the federation and the plaintiff/respondent as set out.
A review of the sharing formula was done in 2007.
Subsequently, the respondent enacted and sought to enforce a Sales Act Law in Lagos State in respect of the aforesaid function already being performed by FIRS. Conflict emerged from the Lagos State Tax Law between the respondent and the FIRS which gave rise to the origination of certain suits pertaining constitutionality of VAT Act between the Lagos State Board of Internal Revenue against the Federal Government and its Agency/agents in various forms.
Some of the suits were lost by the respondent both at the Federal High Court and Court of Appeal respectively. However, this present action was instituted by the respondent at the Supreme Court waiting on the suits aforesaid.
The Originating summons claimed against the appellant that the Lagos State House of Assembly is the appropriate body, excluding any other legislative body to enact laws involving the imposition and collection of tax on all the supply of goods and services within the state and also assessment and collection of such tax. Hence, the enforcement of the VAT Act 2004 of the Federal Government has continued to affect the revenue of Lagos State.
A declaration was sought by the respondent that the VAT Act 2004 is unconstitutional, null and void and have no effect thereby seeking further, a perpetual injunction restraining the Federal Government and its agents from continuing to give effect to the provision of the Act within Lagos State.
A Notice of Preliminary Objection was filed by the 1st appellant urging the court to strike out and/or dismiss the suit on the grounds that the respondent's cause of action relates to acts of a Federal Organ and cannot form the basis of invoking the Court's Original Jurisdiction to entertain this suit and that, the entire suit constituted an abuse of court process. The preliminary objection was upheld.