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Court Stops FIRS From Enforcing VAT On Goods Consumed In Hotels

Gbemileke Ajayi

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Justice Rilwanu Aikawa of the Federal High Court, in Lagos, has barred the Federal Inland Revenue Services (FIRS), from enforcing VAT (Value-Added Tax) provisions on goods and services consumed in hotels, restaurants and event centres in Lagos State.

Justice Aikawa gave the order while delivering judgment in the suit seeking to restrain the Attorney-General (AG) of Lagos State from enforcing the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations Law (HORC), 2017, in the view that VAT Act has covered the field.

In the suit, the Registered Trustees of Hotel Owners and Managers Association of Lagos (HOMA) had sued the AG in Lagos State and FIRS in the suit no. FHC/L/CS/360/2018.

The HOMA had asked the court to declare that by virtue of Section 7, of the VAT Act, the second defendant (FIRS) was the only lawful and constitutional agency charged with the administration and management of consumption tax generally and particularly in Lagos state.

Justice Aikawa, in delivering the judgment, dismissed the suit and held that it was lacking in merit, adding that the plaintiff was obliged to comply with the HORC Law 2009 and the HORC Regulations 2017.

The court also raised two issues by herself; whether the Federal High Court had the jurisdiction to pronounce on the constitutionality of VAT. The court resolved that it has jurisdiction.

Aikawa also held that the issue of the powers of the minister to amend the schedule to the Taxes and Levies (Approved List for Collection) Act was not in dispute before the court and so no pronouncement could be made on it.

The court in dismissing the originating summons, as lacking merit and resolving the questions and reliefs sought in favour of the first defendant, held:

“That consumption tax is not stated in either the exclusive and concurrent legislative list, in the Constitution of Nigeria, therefore, the absence on the concurrent and exclusive lists, puts consumption tax on the residual list, which is within the legislative competence and powers of state governments.

“That VAT Act can’t cover the field over what the federal government has no power to legislate upon, under the constitution, therefore the determinant factor in the issue of covering the field, is whether there is the power to make the Law.

“The provisions of VAT Act relating to consumption tax are inconsistent with the Nigerian constitution.

“The Minister of Finance has corrected the anomaly, by including consumption tax in the list of taxes collectible by the state government, therefore, the responsibility for collecting consumption tax lies on the state government.

“The provisions of Sections 1, 2, 4, 5 & 12 of VAT Act are in breach of the 1999 Constitution and the plaintiffs are obliged to comply with the HORC Law 2009 and the HORC Regulations 2017.

“FIRS are barred from enforcing VAT provisions as it relates to a consumption tax on goods and services consumed in Hotels, Restaurants and Event Centres in Lagos State, ” the judgment read.

The News Agency of Nigeria (NAN) reports that the Registered Trustees of HOMA had filed an originating summons asking the court to determine the following:

“Whether the VAT Act regulating the imposition of tax on consumption of goods and services has not covered the field on taxation of goods and services consumed in hotels, event centres, and restaurants in Lagos State.

“Whether by virtue of Section 7 of the VAT Act, the second defendant (FIRS) is not the only lawful and constitutional agency charged with the administration and management of consumption tax generally and particularly in Lagos State.

“Whether the provisions of the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations 2017 are of no effect, in view of the fact that VAT Act has covered the field”.

Consequently, the first defendant (AG Lagos State), filed a counter-claim urging the court to determine:

“Whether the provisions of Sections 1, 2, 4, 5 & 12 of VAT Act by which the FIRS imposes tax on customers for goods and services consumed in hotels, restaurants and event centres in Lagos State is inconsistent with the provisions of Sections 4(2), 4(a) & (b) and 4 (7) (a) & (b) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) and therefore unconstitutional and invalid?

“Whether by the provisions of Section 4 (7) of the 1999 Constitution of Nigeria, the provisions of the Taxes and Levies (Approved List for Collection) Act Cap T2 Laws of the Federation of Nigeria as amended by the Schedule to the Taxes and Levies order 2015) and the provisions of HORC Law 2009.

“Whether the counter-claimant is the only constitutional and lawful body empowered to assess, impose and collect taxes from customers of the Plaintiff for goods and services consumed in hotels, restaurants and event centers in Lagos State.

The first defendant sought some reliefs which included;

“A declaration that the provisions of Sections 1, 2, 4, 5 & 12 of VAT Act is inconsistent with the constitution and therefore invalid and unconstitutional.

“A declaration that the counter claimant (AG) is the only constitutional and lawful body empowered to assess, impose and collect consumption tax in Lagos State.

“A declaration that the plaintiff is obliged to comply and implement the provisions of the HORC Law, made pursuant thereto, in relation to good and services consumed in Hotels, Restaurant and Event Centres in Lagos State

“An order of perpetual injunction restraining the FIRS from implementing or enforcing the provisions of VAT Act on customers of the plaintiff for goods and services consumed in hotels, event centres, and restaurant in Lagos State”.

All efforts by NAN to reach the Lagos Attorney-General and the Director Legal Services of the Lagos State Internal Revenue for their comments on this judgment, as at the time of filing this report, have been abortive.

(NAN)

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BREAKING: Court Finally Grants Shehu Sani N10m Bail

Peter Okunoren

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Senator Shehu Sani has been granted Ten Million naira (N10m) bail by a Federal High Court in Abuja.

Sani who represented Kaduna Central, in the 8th senate was accused of collecting money in the name of the EFCC acting chairman, Ibrahim Magu.

A source familiar with the arrest told journalists that Mr Sani was arrested following a leak that he collected money from a popular Kaduna businessman to give Mr Magu.

Following a conflict between him and his former in-law, a famous Kaduna car dealer, Sani Dauda, was said to have been approached by Mr Sani to help him get EFCC to dig up alleged crimes of his estranged in-law.

A top source at the EFCC, who asked for anonymity as he was not authorized to speak on the matter, said Mr Sani collected $10,000 from Mr Dauda.

But a source in Kaduna said Mr Sani returned the money to Mr Dauda after the deal leaked and the businessman was invited by EFCC to make a statement. Since his alleged extortion, Sani has been on the custody of EFCC.

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BREAKING: Court Convicts Husband Killer Maryam Sanda Of Murder, To Die By Hanging

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The High Court of the Federal Capital Territory, Abuja, on Monday convicted and sentenced Maryam Sanda to death by hanging for the murder of her husband, Bilyaminu Bello.

Delivering judgment, Justice Yusuf Halilu, held that there was circumstantial evidence coupled with her testimony and statement to the police that she “fatally” stabbed her husband to death in Abuja on November 19, 2017.

The judge orders that she should be remanded in Suleja prison till she exhausts her right of appeal.

Her deceased husband has been variously reported as a son or nephew of a former Chairman of the Peoples Democratic Party, Haliru Bello.

Sanda, the mother of two, her mother and her other relatives broke down in tears immediately the judge pronounced her guilt.

Her mother who was occupying a back seat sped out of the court as she wept.

Sanda herself, while crying rushed out of the courtroom which was next to the dock but the judge ordered that she should be brought back to the courtroom.

In the middle of the confusion, the defense lawyer attempted to make a plea for allocutus (plea for mercy) but the judge said he needed to rise for the courtroom to be restored to normalcy.

The judge said he would return to deliver the sentence after some minutes.

When the judge returned from the break, he said the offense for which the convict was convicted being one based on Section 221 of the Penal Code, there would be no room for allocutus.

“It has been said that thous shall not kill. Whoever kills in cold blood shall die in cold blood,” the judge said.

“Maryam Sanda should reap what she has sown,” he said, adding, “it is blood for blood”.

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BREAKING: EFCC Produces Shehu Sani In Court Over Alleged Extortion

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The Economic and Financial Crimes Commission, EFCC, Monday brought Shehu Sani, a former senator who represented Kaduna Central in the upper chamber, to a federal high court in Abuja to be arraigned on charges of extortion.

Sani has been in the custody of the EFCC since December when he was arrested. He was accused of collecting money in the name of the EFCC acting chairman, Ibrahim Magu.

A source familiar with the arrest told journalists that Mr Sani was arrested following a leak that he collected money from a popular Kaduna businessman to give Mr Magu.

Following a conflict between him and his former in-law, a famous Kaduna car dealer, Sani Dauda, was said to have been approached by Mr Sani to help him get EFCC to dig up alleged crimes of his estranged in-law.

A top source at the EFCC, who asked for anonymity as he was not authorized to speak on the matter, said Mr Sani collected $10,000 from Mr Dauda.

But a source in Kaduna said Mr Sani returned the money to Mr Dauda after the deal leaked and the businessman was invited by EFCC to make a statement.

Details later:

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