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ATTORNEY-GENERAL LAGOS STATE V. EKO HOTELS LIMITED & ANOR
citation: LGC-1080 (8/12/2017)
In The Supreme Court of Nigeria
On Friday, the 8th day of December, 2017
SC.321/2007Before Their Lordships
MUSA DATTIJO MUHAMMAD Justice of The Supreme Court of Nigeria
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN Justice of The Supreme Court of Nigeria
JOHN INYANG OKORO Justice of The Supreme Court of Nigeria
AMIRU SANUSI Justice of The Supreme Court of Nigeria
EJEMBI EKO Justice of The Supreme Court of Nigeria
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN Justice of The Supreme Court of Nigeria
JOHN INYANG OKORO Justice of The Supreme Court of Nigeria
AMIRU SANUSI Justice of The Supreme Court of Nigeria
EJEMBI EKO Justice of The Supreme Court of Nigeria
Between
ATTORNEY GENERAL, LAGOS STATE –
Appellant
AND
ATTORNEY GENERAL, LAGOS STATE – Appellant
AND
1. EKO HOTELS LIMITED 2. FEDERAL BOARD OF INLAND REVENUE –
Respondent
Before Their Lordships
MUSA DATTIJO MUHAMMAD Justice of The Supreme Court of Nigeria
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN Justice of The Supreme Court of Nigeria
JOHN INYANG OKORO Justice of The Supreme Court of Nigeria
AMIRU SANUSI Justice of The Supreme Court of Nigeria
EJEMBI EKO Justice of The Supreme Court of Nigeria
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN Justice of The Supreme Court of Nigeria
JOHN INYANG OKORO Justice of The Supreme Court of Nigeria
AMIRU SANUSI Justice of The Supreme Court of Nigeria
EJEMBI EKO Justice of The Supreme Court of Nigeria
Between
ATTORNEY GENERAL, LAGOS STATE – Appellant
AND
1. EKO HOTELS LIMITED
2. FEDERAL BOARD OF INLAND REVENUE – Respondents
…………………….A…………………….
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C. (Delivering the Leading Judgment): This appeal is against the judgment of the Court of Appeal, Lagos Division delivered on 13th July 2007 affirming the judgment of the Federal High Court sitting in Lagos delivered on 20th December 2004 ordering the remittance of money collected as tax by the 1st respondent on its sales to its consumers to be paid to the 2nd respondent, the Federal Board of Inland Revenue.
The suit before the trial Court was in the nature of interpleader proceedings. By an Originating Summons filed on the 5th day of March, 2004 the 1st respondent sought a determination by the trial Court as to whether remittance of money collected as tax by it from its consumers should be paid to the Federal Board of Inland Revenue (FBIR) or to the Lagos State Government having regard to the provisions of Sections 1, 2, 10, 11, 12, 13, 14, 15 and 16 of the Value Added Tax (VAT) Decree No.102 of 1993 and Sections 1, 2, 3, 4, 5 and 6 of the Sales Tax Law Cap. 175 and Sales Tax (Schedule Amendment) Order 2000. It sought the following reliefs:
1. A declaration that the plaintiff can only be a taxable person or remitting agent in respect of the amount due as tax on its sales to its consumers to a single body or agency and not to state and Federal agencies together.
2. An order that the plaintiff is not entitled to pay or remit tax on its sales to its consumers to the defendants until the rightful body to collect same is determined.
3. An order directing the plaintiff to pay the amount due as tax on its sales to its consumers to a dedicated account until the rightful body to collect same is determined.
The Originating Summons was supported by a 16-paragraph affidavit deposed to by one SAMUEL O. ALABI, Company Secretary/Legal Adviser of the 1st respondent. Paragraphs 4 12 and 14 thereof illustrate the dilemma in which the 1st respondent found itself. They are reproduced hereunder:
4. That the applicant has been a taxable person or collecting agent to the 1st defendant [FBIR] since 1994 and has been remitting tax on its sales to its consumers to it [FBIR] (Now shown to me and marked Exh. SO1 – 3 are copies of correspondence from the 1st defendant to the plaintiff).
5. That sometimes in 2001, the 2nd defendants [AG LAGOS STATE] agent wrote to the plaintiff and demanded remittance of money due as tax on the plaintiff’s sales to its consumers to it by virtue of a newly enacted law which is Sales Tax Law Cap. 175 Laws of Lagos State 1995 and Sales Tax Amendment Order 2000. (Now shown to me and marked Exh.SO4 5 are copies of letters written to the plaintiff by the 2nd defendants agent).
6. That the plaintiff has written to both defendants explaining its dilemma but the defendants still insist that the plaintiff must remit money due as tax from its sales to its consumers to the defendants.
7. That the agents of the 1st defendant, particularly the VAT office in Lagos has been threatening the plaintiff with litigation for its failure to remit the said money to it. (Now shown to me and marked Exh. SO6 is a copy of such letter).
8. That the agents of the 2nd defendant too has (sic) been threatening the plaintiff with sanctions for failure to remit money collected as tax from the plaintiffs sales to its consumers to it. (Now shown to me and marked Exh. SO7 is a copy of such letter).
9. That I believe that Value Added Tax and Sales Tax are the same and most of our consumers will reject the imposition of one tax as two taxes on them.
10. the plaintiff is at a loss as to the rightful body to remit the tax to.
11. That the 1st defendant is relying on Value Added Tax Decree No. 102 of 1993 to demand for the payment of the money collected as tax on the sales to its consumers to it while the 2nd defendant is also relying on Sales Tax Law Cap.175 Laws of Lagos State 1995 and Sales Tax Amendment Order 2000 to demand for the remittance of the same money due from the plaintiff’s sales to its consumers. (Now shown to me and marked Exh. SO8 – SO9 are copies of VAT Decree 1993 and Sales Tax Law Cap.175 Laws of: Lagos State 1995 and Sales Tax Amendment Order 2000).
12. That the plaintiff company has no interest whatsoever in the money in dispute other than administrative charges and costs.
14. That the plaintiff company is willing to pay or transfer the money due as tax on plaintiff’s sales to its consumers into a dedicated account until the determination of this suit.
(Emphasis mine)
The appellant (as 2nd defendant) and 2nd respondent (as 1st defendant) filed counter affidavits in opposition to the
1. A declaration that the plaintiff can only be a taxable person or remitting agent in respect of the amount due as tax on its sales to its consumers to a single body or agency and not to state and Federal agencies together.
2. An order that the plaintiff is not entitled to pay or remit tax on its sales to its consumers to the defendants until the rightful body to collect same is determined.
3. An order directing the plaintiff to pay the amount due as tax on its sales to its consumers to a dedicated account until the rightful body to collect same is determined.
The Originating Summons was supported by a 16-paragraph affidavit deposed to by one SAMUEL O. ALABI, Company Secretary/Legal Adviser of the 1st respondent. Paragraphs 4 12 and 14 thereof illustrate the dilemma in which the 1st respondent found itself. They are reproduced hereunder:
4. That the applicant has been a taxable person or collecting agent to the 1st defendant [FBIR] since 1994 and has been remitting tax on its sales to its consumers to it [FBIR] (Now shown to me and marked Exh. SO1 – 3 are copies of correspondence from the 1st defendant to the plaintiff).
5. That sometimes in 2001, the 2nd defendants [AG LAGOS STATE] agent wrote to the plaintiff and demanded remittance of money due as tax on the plaintiff’s sales to its consumers to it by virtue of a newly enacted law which is Sales Tax Law Cap. 175 Laws of Lagos State 1995 and Sales Tax Amendment Order 2000. (Now shown to me and marked Exh.SO4 5 are copies of letters written to the plaintiff by the 2nd defendants agent).
6. That the plaintiff has written to both defendants explaining its dilemma but the defendants still insist that the plaintiff must remit money due as tax from its sales to its consumers to the defendants.
7. That the agents of the 1st defendant, particularly the VAT office in Lagos has been threatening the plaintiff with litigation for its failure to remit the said money to it. (Now shown to me and marked Exh. SO6 is a copy of such letter).
8. That the agents of the 2nd defendant too has (sic) been threatening the plaintiff with sanctions for failure to remit money collected as tax from the plaintiffs sales to its consumers to it. (Now shown to me and marked Exh. SO7 is a copy of such letter).
9. That I believe that Value Added Tax and Sales Tax are the same and most of our consumers will reject the imposition of one tax as two taxes on them.
10. the plaintiff is at a loss as to the rightful body to remit the tax to.
11. That the 1st defendant is relying on Value Added Tax Decree No. 102 of 1993 to demand for the payment of the money collected as tax on the sales to its consumers to it while the 2nd defendant is also relying on Sales Tax Law Cap.175 Laws of Lagos State 1995 and Sales Tax Amendment Order 2000 to demand for the remittance of the same money due from the plaintiff’s sales to its consumers. (Now shown to me and marked Exh. SO8 – SO9 are copies of VAT Decree 1993 and Sales Tax Law Cap.175 Laws of: Lagos State 1995 and Sales Tax Amendment Order 2000).
12. That the plaintiff company has no interest whatsoever in the money in dispute other than administrative charges and costs.
14. That the plaintiff company is willing to pay or transfer the money due as tax on plaintiff’s sales to its consumers into a dedicated account until the determination of this suit.
(Emphasis mine)
The appellant (as 2nd defendant) and 2nd respondent (as 1st defendant) filed counter affidavits in opposition to the
…………………….B…………………….
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