ATTORNEY-GENERAL LAGOS STATE v. EKO HOTELS LIMITED & ANOR

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

…………………….B…………………….

originating summons. In addition, the appellant filed a preliminary objection challenging the jurisdiction of the Court to entertain the suit. The preliminary objection was heard along with the substantive suit. On 20/12/2004, in a considered judgment, the learned trial Judge dismissed the preliminary objection and held that the Federal High Court had jurisdiction to entertain the suit. He also held that the 1st respondent could 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 agency, which is the FBIR. Dissatisfied with the decision the appellant appealed to the Court below, which in a considered judgment delivered on 13th July 2007, dismissed the appeal and affirmed the judgment of the trial Court. The appellant is still aggrieved and has therefore instituted this appeal against the decision of the lower Court.
At the hearing of the appeal, S.A. QUADRI ESQ., Director Civil Litigation, Lagos State Ministry of Justice, leading Mrs. E.R. Agu, Chief State Counsel, adopted and relied on the appellant’s brief which was deemed filed on 13/7/2009 in urging the Court to allow the appeal. M.N.O. OLOPADE ESQ., leading IBIYE TYROLL THOMPSON ESQ. adopted and relied on the 1st respondent’s brief deemed filed on 24/2/2010 in urging the Court to dismiss the appeal. Similarly, MRS. B.H. ONIYANGI appearing with IBRAHIM ABDULIAH ESQ. adopted and relied on the 2nd respondents brief deemed filed on 7/7/2010 in urging the Court to dismiss the appeal.
From the five grounds of appeal filed on 2/4/08, learned counsel for the appellant distilled the following issues for determination:
1. Whether the Court below was right when it held that the cases of:
i) Attorney General of Ogun State Vs. Aberuagba (1985) 1 NWLR (Pt.3) 395,
ii) Nigerian Soft Drinks Ltd. Vs Attorney General of Lagos State (1987) 2 NWLR (Pt.57) 444,
cited to the trial Court as stare decisis, is a non issue and that none of those decisions was authority to say that the 1st respondent is obliged to remit proceeds of Sales Tax to Lagos State Government. (Ground 1).
2. Whether the lower Court was right when it held that the Value Added Tax Act has covered the field of Sales Tax and its provisions prevail over the Sales Tax Law of Lagos State. (Ground 2).3. Whether the Court below was right when it held that imposition of both VAT and Sales Tax will create double taxation. (Ground 3).
4. Whether the Court below misapprehended the objection of the appellant on the jurisdiction of the trial Court and erred in law when it held that the trial Court had jurisdiction to entertain the plaintiff’s action as constituted. (Ground 4).
5. Whether the Court below misdirected itself on the submission of the appellant that it should invoke its power under S.16 of the Court of Appeal Act to determine the merit of the case. (Ground 5).
Both respondents adopted the issues as formulated by the appellant.
Issue I
Whether the Court below was right when it held that the cases of:
i) Attorney General of Ogun State Vs Aberuagba (1985) 1 NWLR (Pt.3) 395,
ii) Nigerian Soft Drinks Ltd. Vs Attorney General of Lagos State (1987) 2 NWLR (Pt.57) 444, cited to the trial Court as stare decisis, is a non issue and that none of those decisions was authority to say that the 1st respondent is obliged to remit proceeds of Sales Tax to Lagos State Government.
It is the appellant’s contention that the cases of Attorney General of Ogun State Vs Aberuagba (supra) decided by the Supreme Court and Nigerian Soft Drink Ltd. Vs Attorney General of Lagos State (supra) decided by the Court of Appeal had conclusively determined the sales taxing power of the Lagos State Government and that both the Federal High Court and the Court of Appeal, by virtue of the doctrine of stare decisis, ought to have held themselves bound by those decisions, which were cited and relied upon before them.
It is contended that the trial Court erred in not holding itself so bound and the lower Court erred in affirming the decision. Reliance was placed on: NAB Ltd. Vs Barri Engineering Nigeria Ltd. (1995) 8 NWLR (Pt.413) 275 @ 289; Dairo Vs UBA (2007) 7 SC (Pt.2) 97; Oladeji Nigeria Ltd. Vs Nigerian Brewery (2007) 1 SC (Pt.II) 183. Serious exception was taken to the following view expressed by the lower Court at page 424 of the record regarding Aberuagba’s case:
There is no question of sales tax addressed in the above case. If the appellant had obtained judgment in respect of the subject matter of the proceedings, what was the difficulty in exhibiting such judgment before the Court

…………………….C…………………….

Learned counsel for the appellant argued that in holding that no evidence was produced to buttress the assertion that judgment had been obtained in respect of the money in the 1st respondents possession, the Court below had confused the doctrine of stare decisis with the doctrine of estoppel. He maintained that the appellant’s case was that on the basis of the principle of law and ratio decidendi in the two cases, the appellant is entitled to the remittance of the money in dispute. He submitted that taxation is governed and regulated by statute. He referred to Section 4 of the 1999 Constitution which provides for the legislative powers of the Federal Government in respect of matters contained in the Exclusive Legislative List and the Concurrent Legislative List vis a vis the Legislative powers of the states. He referred to A.G. Lagos State Vs. A.G. Federation(2003) 6 SC (Pt.1) 24. He argued that the Federal Government derived its power to enact the VAT Act from Item 61 in the Exclusive Legislative List (which is in pari materia with Item 62 in the 1999 Constitution) and that the provision was considered and interpreted by this Court in Aberuagbas case wherein the taxing power of the Federal Government was limited to international and interstate trade and commerce. He submitted that in Nigerian Soft Drinks Ltd. Vs A.G. Lagos State (supra), the power of the Lagos State Government to enact the Sales Tax Law, which power was derived from Section 4 of the Constitution as a residual matter, was affirmed. He therefore urged the Court to resolve this issue in the appellant’s favour.
In reply, learned counsel for the 1st respondent argued that the case before the lower Court was not about the validity of the Sales Tax Law of Lagos State or the State’s taxing power but for a determination of the rightful owner of money collected as tax by it from its customers on sales of goods and services. He argued that Aberuagba’s case is distinguishable from the instant case. He submitted that it was held in that case that while every State in Nigeria has power to legislate in respect of matters under the concurrent legislative list within its own state, such legislation must not restrict interstate trade, whereas the matter before the trial Court was seeking a determination as to who, as between the appellant and the 2nd respondent, should receive remittance of tax already collected by the appellant. In other words, that there were no interpleader proceedings in Aberuagba’s case to warrant the application of the doctrine of stare decisis. Relying on: NEPA VS ONAH (1997) 1 NWLR (PT.484) 680, he submitted that under the doctrine of stare decisis, it is only the major principles decided by the Court, which are relevant to both suits, that bind Courts of concurrent or lower jurisdiction. He submitted that the lower Court was right to have distinguished Aberuagba’s case and the Nigerian Soft Drinks case from the facts of this case as neither involved interpleader proceedings nor was VAT an issue therein.
Learned counsel for the 2nd respondent submitted with regard to Aberuagba’s case that even though this Court held that a State House of Assembly has power to enact a Sales Tax Law, it emphasised that such law must not be inconsistent with any law validly made by the Federal Government nor should a state enact any Sales Tax Law where the law validly made by the Federation has covered the field. He noted that even though the case was decided before VAT became operative in Nigeria, the Court found it necessary to sound that note of warning. He argued that the combined effect of the two cases relied upon by the appellant is that the State law is null and void to the extent of its inconsistency in relation to matters on which the National Assembly has legislated. He argued that although there have been declarations in the two cases regarding the validity of the Sales Tax Laws in question, the declarations cannot be stretched to accommodate the circumstances of this case. He submitted that the cases are not on all fours with the present case and urged the Court to resolve this issue against the appellant.
In order to address this issue, it is important to take another look at the suit filed before the trial Court. As rightly pointed out by learned counsel for the 1st and 2nd respondents, the 1st respondent was not challenging the validity of the Sales Tax Law of Lagos State. What was in issue was that from 1994 to 2001, the 1st respondent had been collecting tax on sales and services from its consumers and remitting same to the 2nd respondent pursuant to the provisions of the VAT Act without let or hindrance. However, in 2001, it received a letter from the appellant demanding that the tax collected be remitted to it rather than to the 2nd respondent. It relied on the provisions of the Sales Tax Law Cap. 175 laws of Lagos State and the Sales Tax (Schedule Amendment) Order 2000.
The situation the 1st respondent was faced with was that it had already collected the money from its consumers. It sought direction from the Court as to which of the two contenders was entitled to the remittance of the money, as it had received threatening letters from the agencies of both. Now, the question to be determined is whether the authorities of A.G. Ogun State Vs Aberuagba (supra) and Nigerian Soft Drinks Ltd. Vs A.G. Lagos State (supra)are

…………………….D…………………….

decisions relating to a similar issue as the one arising in this case so as to make the doctrine of stare decisis applicable against the lower Courts.
Stare decisis is defined in Blacks Law Dictionary, 8th edition as follows:
To stand by things decided. The doctrine of precedent under which it necessary for a court to follow earlier judicial when the same points arise again in litigation.
The rule of adherence to precedents finds its expression in the doctrine of stare decisis. The doctrine is simply that, a point or principle of law has been once officially decided or settled by the ruling of a competent Court in a case in which it is directly and necessarily involved, it will no longer be considered as open to examination or to a new ruling by the same tribunal, or by those which are bound to follow its adjudication, unless it be for urgent reasons and in exceptional cases. William M. Lile et al. Brief Marking and the use of Law Books 321 (3rd ed. 1914).
(Underlining mine for emphasis)
The rationale for the doctrine was stated by His Lordship, Onnoghen, JSC (as he then was) in Ardo Vs Nyako(2014) LPELR-22878 (SC) thus:
… the principle of judicial precedent or stare decisis is designed to ensure orderliness, certainty and discipline in the judicial process. The principle holds inferior Courts to the Supreme Court of Nigeria bound by the previous decision(s) of the Court on similar facts in the consideration and determination of matters before them. …It is settled that the way open to the Courts to avoid the doctrine/principle of judicial precedent/stare decisis is by distinguishing the previous decision(s) from the facts and/or circumstances of the case under consideration.
On the circumstances in which the doctrine of stare decisis would arise, His Lordship Rhodes-Vivour, JSC in Emeka Vs Okadigbo (2012) 18 NWLR (Pt.1331) 55 @ 96 H; (2012) LPELR-9338 (SC) held:
Facts have no views. A judgment should always be read in light of the facts on which the case was decided. The rules of stare decisis do not allow Courts to apply the ratio of a case across the board and with little regard to the facts of the case before them. See:Albion Construction Ltd. Vs R.A.O. Inv. & Prod. Ltd. (1992) 1 NWLR (Pt.219) 583.
In Aberuagba’s case, the issue in contention, as stated by Mohammed Bello, JSC (as he then was) in his leading judgment, concerned the Federal and State taxing powers having regard to the provisions of the 1979 Constitution of the Federal Republic of Nigeria. What was in issue was the validity of the exercise of its legislative powers by the Ogun State House of Assembly in enacting the Sales Tax Law of 1982, which imposed a tax on the purchase of specified goods and services and made provision for the collection of same. His Lordship, Bello, JSC (as he then was) held as follows:
Accordingly, I hold that in so far as the Law purports to impose sales tax on taxable products brought into the State, it offends the provision of inter-State or international trade and commerce and contravenes Section 4 (3) of the Constitution. I declare the law unconstitutional to that extent. Furthermore, item 61 (e) empowers the Federation to control the prices of goods and commodities.
Under the Price Control Act 1977 and the Price Control Commodities Order 22 of 1979, the Federal Government has controlled the prices of petrol, diesel oil and petroleum products. I have earlier shown that the Act and the Order are existing laws. Since the sales tax is intended to be paid by the consumer, it tantamounts to an increase – in my view- in the prices of the taxable products, namely petrol, diesel oil and petroleum the prices of which have been controlled by the Federal Government.
That being the case, I hold the sales tax to be inconsistent with the Price Control Act and the Order made thereunder. Consequently, the Sales Tax on petrol, diesel oil and other petroleum products is unconstitutional, null and void
Having regard to the following, I may summarise that the Federation has implied exclusive power to make sales tax in all matters within the Exclusive and Concurrent Lists while the States have implied or residuary power to enact sales tax law on all matters outside the said Lists.
See pages 34G-35G of the case as reported in (1985) LPELR-3164 (SC).
As the 1st respondent did not challenge the validity of the Sales Tax Law of Lagos State, Aberuagba’s case cannot constitute stare decisis in respect of the interpleader proceeding before the trial Court. In the Nigerian Soft Drinks Ltd,

…………………….E…………………….

case, the issue was whether, having regard to the decision of this Court in Aberuagbas case, the Sales Tax Law of Lagos State is similar to the Ogun State Sales Tax Law and is therefore unconstitutional, being a legislative exercise in respect of Item 61 of the Exclusive Legislative List to the extent that it imposes sales tax on interstate trade and commerce and interferes with taxable goods, the prices of which have been controlled by the Federal Government. The Lagos State Sales Tax Law was held to be valid because, unlike the Ogun State Law, Section 2 thereof did not impose tax in respect of taxable goods whose prices have been controlled by the Federal Government. The persons liable to pay tax were purchasers or consumers of any taxable commodities listed in the schedule to the law. In other words, under the Lagos State Sales Tax Law, the tax is not upon the goods but upon the consumer whereas under the Ogun State Sales Tax Law the charge was upon goods brought into the State. Again, the appellant did not challenge the validity of the Sales Tax Law. The case has nothing to do with a determination as to which of two contending parties is entitled to tax already collected under the VAT Act. I am of the view and I do hold that the two cases were rightly distinguished by the lower Court from the facts of the instant case. They did not constitute stare decisis and were not relevant to the determination of the issue before them.
I accordingly resolve this issue against the appellant.
Issue 2
Whether the lower Court was right when it held that the Value Added Tax Act has covered the field of Sales Tax and its provisions over the Sales Tax Law of Lagos State.
Under this issue, learned counsel for the appellant takes umbrage at the following finding of the lower Court in the course of its judgment at page 436 of the record, to wit:
It is my view and this I hold that the Value Added Tax Decree No. 12 [sic: No.102] of 1993 having imposed tax on the same goods and services imposed in the Sales Tax;(Schedule Amendment) Order 2000, the Value Added Tax Decree prevails over the Sales Tax Law of Lagos State as the VAT Decree is deemed to have covered the field.
Referring to the doctrine of covering the field as explained by this Court in AG Abia State Vs AG Federation (2002) 3 SC 106 and INEC Vs Musa (2003) 1 SC (part 1) 106, learned counsel argued that it is not in all cases where a statute enacted by a state is in conflict with a statute enacted by the Federal Government on the same subject that the former would be declared invalid or inoperative. He contended that for the doctrine of covering the field to apply, the Federal Government must first have the legislative competence to enact the law. He proceeded to examine the provisions of Section 4(2), (3), (5), (6) and (7) of the 1999 Constitution with particular emphasis on the phrase any law validly made by the National Assembly, as contained in Subsection (5). He also referred to the textbook, Federalism in Nigeria under the Presidential Constitution by Prof. Ben Nwabueze.
Referring to Section 2 of the VAT Act, he argued that what triggers liability under the Act is the supply of goods and services and that supplies is defined in Section 42 of the Act to mean any transaction, whether it is the sale of goods or the performance of a Service for a consideration that is for money or money’s worth. He submitted that VAT has a very broad base compared to other taxes, which exempt certain persons, companies and institutions from liability. He submitted that where VAT is concerned the location of the supplier and consumer are immaterial. He argued that VAT is imposed on supply of goods and services within a State, inter State, throughout Nigeria and even beyond. He however conceded that by virtue of the Federal Inland Revenue Services Information Circular No.9304 of 20th August 1993, it was made clear that supplies made outside Nigeria are outside the scope of the VAT Act.
While conceding that the Federal Government has incidental sales taxing power in respect of trade and commerce, he posited that the power is incidental only to the exclusive power of the National Assembly over international and inter-State trade and commerce. He contended that the national Assembly has no competence to make any law on intra-State trade and commerce and therefore cannot impose tax on intra-State transactions, which the VAT Act appears to do. He argued that by imposing VAT on intra-State supply of goods and services, the Act has exceeded the powers of the Federal Government under the Constitution to impose VAT. He referred to the decision of this court in the case of Fawehinmi Vs Babangida (2003) 3 NWLR (Pt.808) 604. He

…………………….F…………………….

concluded by maintaining that the issue of having identical legislations on the same subject matter does not arise and therefore the doctrine of covering the field is not applicable so as to make the provisions of the Act prevail over the Sales Tax Law of Lagos State. He contended that the principle of covering the field was misapplied by the Court below having regard to the lack of legislative power in the National Assembly to enact the Law. He submitted that where the National Assembly lacks legislative competence, it is the legislation passed by it that would be void and of no effect for inconsistency with the provisions of Section 3 (1) of the Constitution. He referred to AG Abia State Vs AG Federation (supra).
In reaction to the above submissions, learned counsel for the 1st respondent argued that counsel for the appellant misconstrued the doctrine of covering the field when he contended that the National Assembly lacked the power to legislate on VAT and that the absence of such power made the doctrine inapplicable in the circumstances of this case. He submitted that the constitutionality or validity of the VAT Act was not in issue in the Court below. He submitted further that VAT and sales tax are the same, as the incidence of both taxes as is on the consumer and the tax is charged on consumable items as stated in the schedules to both laws. He also contended that the rates and goods upon which charges are made under both laws are the same. He submitted that the lower Court was right to have relied on Aberuagbas case in reaching the conclusion that the VAT Act had covered the field on matters dealt with by the Sales Tax Law of Lagos State. He also submitted that the authorities of AG Abia State Vs AG Federation (supra) and Fawehinmi Vs Babangida(supra) relied upon by learned counsel for the appellant are inapplicable to the facts of this case, as the issue in the former case was whether the National Assembly had power to increase or otherwise alter the tenure of office of elected officials in local government councils in Nigeria, while the issue in the latter was in relation to the validity of the Tribunals of Inquiry Act, Cap. 447 LFN 1990.
Learned counsel for the 2nd respondent on his part argued that the Value Added Tax Decree No.102 of 1993, which was promulgated by the Federal Military Government for the entire nation and remained in force with amendments until the coming into effect of the 1999 Constitution, is an existing law and deemed to be an Act of the National Assembly by virtue of Section 315 (a) & (b) of the said 1999 Constitution. He submitted that Section 4 of the 1999 Constitution guarantees the power of the National Assembly to make laws on the items in the Exclusive and Concurrent Legislative Lists as set out in Parts I & II of the 2nd Schedule to the Constitution and that by virtue of item 7 Part II thereof, the National Assembly is empowered to make laws on collection of taxes. He contended that VAT is a tax payable on goods and services all over Nigeria and all tiers of Government, including Lagos State, are beneficiaries. He submitted that the 2nd respondent, in compliance with the Act has been sharing the proceeds of tax collection amongst all the States of the Federation, including Lagos State. He contended that the appellant, whilst still a beneficiary of the Act, cannot approbate and reprobate by complaining about the same law.
Relying on the provision of Section 4 (5) of the Constitution, learned counsel submitted that since the VAT Act is a valid law of the National Assembly, the Sales Tax Law of Lagos State is void to the extent of its inconsistency therewith. He relied on Aberuagba’s case and the Nigerian Soft Drinks case in support of his contention. He also cited in support: Lakanmi & Anor Vs AG Western Region (1970) NSCC 143 @ 144 and AG Abia State Vs AG Federation(supra) @ 431 B E. In conclusion, he maintained that the VAT Act, as currently administered by the 2nd respondent, has already covered the field sought to be regulated by the Sales Tax Law of Lagos State.
A convenient place to commence the resolution of this issue is to examine the application of the doctrine of covering the field as it relates to the powers of the National Assembly and State Houses of Assembly to make laws. In A.G. Ogun State & Ors. Vs. A.G. Federation (1982) NSCC (Vol.13) 1 @ 35 lines 18 30, His Lordship, Kayode Eso, JSC stated thus:
I take the view that when one considers this doctrine, the phrase covering the field means precisely what it says. Where a matter legislated upon is in the concurrent list and the Federal Government has enacted a legislation in respect thereof, where the legislation enacted by the State is inconsistent with the legislation of the Federal Government it is indeed void and of no effect for inconsistency. Where, however, the legislation enacted by the State is the same as the one enacted by the Federal Government, where the two legislations are in pari materia I respectfully take the view that the State Legislation is in abeyance and becomes inoperative for the period the Federal Legislation is in force. I will not say it is void. If for any reason the Federal Legislation is repealed, it is my humble view that the State legislation, which is in abeyance, is revived and becomes operativeuntil there

…………………….G………………..

is another Federal Legislation that covers the field.
(Emphasis mine)
This view was endorsed and adopted by this Court in the case of AG Abia State Vs AG Federation (2002) 6 NWLR (Pt.763) 264 @ 435 F, to wit:
The doctrine however renders the paramount legislation predominant and the subordinate legislation remains inoperative so long as the paramount legislation remains operative. Where of course, there is obvious inconsistency, the subordinate legislation is void.
In INEC VS MUSA (2003) 3 NWLR (Pt.806) 72 @ 204 205 H B; (2003) LPELR-1515 (SC) @ 108 C F, the circumstances in which the doctrine of covering the field might arise was explained thus:
The doctrine of covering the field can arise in two distinct situations. First, where in the purported exercise of the legislative powers of the National Assembly or a State House of Assembly, a law is enacted in which the Constitution has already made provisions covering the subject matter of the Federal Act or the State law. Second, where a State House of Assembly, by the purported exercise of its legislative powers, enacted a law which an Act of the National Assembly, has already made provisions covering the subject matter of the State law. In both situations, the doctrine of covering the field will apply because of the Federal might” which relevantly are the Constitution and the Act.
In my humble view, a State Law which is not necessarily inconsistent with either the Institution or an Act of the National Assembly but merely covers the legislative field of the National Assembly is not harmful as it is merely a surplusage. In line with the decision of Eso, JSC, in A.-G, Ogun State (supra), such a law of a State House of Assembly is in abeyance and inoperative and could be revived and becomes operative if for any reason the Federal legislation is repealed.
See also: Lakanmi Vs AG. Western Region (1970) NSCC 143 @ 144; Osun State Government Vs. Estisione H.(Nigeria) Ltd. & Anor. (2012) LPELR-7936 (CA) @ 33 34 B B.
Section 4 (1) – (7) of the 1999 Constitution provides for the legislative powers of the National Assembly and the State Houses of Assembly to make laws. Subsection (5) provides:
4 (5): 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 the inconsistency be void.
It is necessary to reiterate here that the issue in dispute in this case is not the constitutionality of the Sales Tax Law of Lagos State nor the validity of the Value Added Tax Act. Indeed, learned counsel for the appellant, as 2nd defendant at the trial Court, initially filed a counter claim to the originating summons (page 63 of the record) wherein he sought certain declarations regarding the taxing powers of the respective defendants to make laws imposing tax on consumers of goods and services vis-a-vis item 62 of the Exclusive Legislative List in the 2nd Schedule to the 1999 Constitution. However, the counter claim was withdrawn by learned counsel and accordingly struck out by the Court on 16/6/2004 (see page 190 of the record). Thus, the issue upon which the learned trial Judge predicated his judgment was the single question raised by the plaintiff in its originating summons, to wit: whether remittance of money collected as tax by plaintiff on its sales to its consumers be paid to Federal Board of Inland Revenue [1st defendant/2nd respondent] or Lagos State Government [2nd defendant/appellant] in view of provisions of Sections 1, 2, 10, 11, 12, 13, 14, 15, and 16 of Value Added Tax 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. The declarations sought were produced earlier in this judgment. The 2nd defendant having raised a preliminary objection to the Court’s jurisdiction, which was taken along with the originating summons, the issues upon which the trial Court predicated its judgment were whether it had jurisdiction to entertain the suit and who, as between the two defendants, was entitled to remittance of funds already collected by the plaintiff pursuant to the VAT Act. Significantly, one of the grounds of the preliminary objection (see page 64 of the record) was that the suit did not disclose a reasonable cause of action because the plaintiff was not challenging either the VAT Act or the Sales Tax Law of Lagos State. In the absence of any relief challenging the legitimacy of the VAT Act, I am of the considered view that the only issue the Court needed to determine was whether, as the law stood at the time the cause of action arose, the money already collected by the plaintiff under the VAT Act should be remitted to the 2nd respondent rather than the appellant. In the instant appeal, there is also no issue seeking the

…………………….H…………………….

invalidation of the VAT Act.
As rightly observed by learned counsel for the 2nd respondent, the Value Added Tax Decree No.102 of 1993 was promulgated by the Federal Military Government and remained in effect, with necessary amendments, until the coming into effect of the 1999 Constitution. Section 315 (1) of the 1999 Constitution provides as follows:
“315 (1) Subject to the provisions of this Constitution, an existing law shall have effect with such modification as may be necessary to bring it into conformity with the provisions of this Constitution and shall be deemed to be
(a) An Act of the National Assembly to the effect that it is a law with respect to any matter on which the National Assembly is empowered by this Constitution to make laws; and
(b) A law made by a House of Assembly to the extent that it is a law with respect to any matter on which a House of Assembly is empowered by this Constitution to make laws.”
At the time the cause of action arose, the VAT Act was deemed to be an Act of the National Assembly. At the risk of repetition, there was no prayer before the trial Court or the lower Court seeking to nullify the Act. Until there is a decision of a Court of competent jurisdiction invalidating it, it remains valid and subsisting.
Section 2 of the Decree (now the VAT Act) provides that the tax to be charged and payable on goods and services is as set out in Column A of Schedules 1 and 2 of the Act. Section 1 of the Sales Tax Law of Lagos State makes similar provision. The goods and services in respect of which tax is chargeable and the applicable rates are set out in Part 1 of the Sales Tax (Schedule Amendment) Order, 2000. As rightly observed by the two lower Courts, the goods and services covered by both legislations are the same. It follows that the VAT Act has effectively covered the field in that regard. Section 7 (1) of the Act provides that the tax shall be administered by the 2nd respondent. In the circumstances, I am in complete agreement with the Court below, which affirmed the finding of the trial Court, that the VAT Act having covered the field on the issue of sales tax, its provisions prevail over the provisions of the Sales Tax Law of Lagos State. Thus, even if the Lagos State House of Assembly has the requisite legislative competence to enact the Sales Tax Law, which is not an issue before us, once an existing Federal law or an Act of the National Assembly has covered the field, the Act of the National Assembly or such existing Federal law must prevail. This issue is accordingly resolved against the appellant.
Issue 3
Whether the Court below was right when it held that imposition of both VAT and Sales Tax will create double taxation.
In support of this issue, learned counsel for the appellant submitted that double taxation might arise in two situations: the first, is the imposition of two taxes on the same property, tax payer or profit or goods during the same period, for the same taxing period by one taxing authority, while the second is the imposition of comparable taxes in two or more States on the same tax payer for the same subject or identical goods. He referred to Black’s Law Dictionary, 8th edition. He submitted that neither situation is applicable in this case. He contended that unless the VAT Act can validly impose tax on the same subject as the Sales Tax Law, the issue of double taxation would not arise. He argued that the VAT Act is unconstitutional and invalid to the extent of its inconsistency with the provisions of the Constitution for imposing tax on intra State trade and commerce. He submitted that Item 7 of Part II of the Concurrent Legislative List does not confer legitimacy on the VAT Act. He argued that the tax imposed by the VAT Act is a consumption tax levied on the value added to a product in the course of production and is therefore neither a capital gains tax, nor does it qualify as income or profits of persons other than companies. He argued further that it is also not a levy on documents or transactions. He contended that the VAT Act and the Sales Tax Law are two different and distinct laws enacted by different legislative authorities imposing different taxes. He submitted that even if the issue of double taxation did arise, it is not for a customer to determine which law to obey without first invalidating one of the taxes.
In response, learned counsel for the 1st respondent submitted that in so far as the objectives of the two taxes are the same and the incidence of the taxes is on the consumer, the Court below could not have come to any other conclusion than its finding that the imposition of both taxes would create double taxation. He maintained that, as the VAT Act is still an existing law by virtue of Section 315 (1) of the Constitution, and in the absence of any decision of a Court of competent jurisdiction invalidating it, the imposition of two taxes on the same consumers would create double taxation. He referred to Aberuagba’s case (supra).
In a similar vein, learned counsel for the 2nd respondent submitted that the Sales Tax Law of Lagos State (Schedule

…………………….I…………………….

Amendment) Order 2000, having imposed tax on the same goods and services and at the same rate of 5% as imposed by the VAT Act, as amended, would amount to double taxation as the actual payer of the tax in both cases is the same consumer of the goods and services. He noted that historically, prior to the promulgation of the VAT Act, the various States of the Federation operated various Sales Tax Laws, which had the effect of creating double taxation and that in consequence Section 45 of the Act, which repealed the Sales Tax Act was enacted, as a result of which various States of the Federation either repealed or suspended their respective Sales Tax Laws. He contended that the VAT Act was promulgated to correct the mischief and defects in the Sales Tax Laws and to protect the tax payers from double taxation. He submitted that the VAT Act sought to compensate the States for the abrogation of the Sales Tax Act by making provision in Sections 21 and 22 of the Act for the involvement of State Governments in the administration of the tax. He also referred to Section 40 of the Act, which sets out the formula for distribution of revenue accruing by virtue of operation of the law between the Federal, State and Local Governments, with State and Local Governments receiving 50% and 35% respectively. He also referred to Section 36 of the VAT Amendment Act 2007, which provides:
Provided that the principle of derivation of not less than 20% shall be reflected in the distribution of the allocation amongst States and Local Governments as specified in Sub-paragraphs (a) and (c) of this section.
He maintained his earlier position that the appellant, as a beneficiary of the VAT Act cannot be heard to complain.
In resolving this issue, I shall first address the argument of learned counsel for the appellant to the effect that the VAT Act is unconstitutional for not being within the legislative powers of the National Assembly. In the course of resolving Issue 2 earlier, I did hold that the VAT Act is an existing law by virtue of Section 315 (1) of the 1999 Constitution and that the Act has covered the field on the subject of sales tax and therefore prevails over the Lagos State Sales Tax (Schedule Amendment) Order 2000. I am in complete agreement with learned counsel for the 1st and 2nd respondents that not only do both legislations cover the same goods and services, they are also targeted at the same consumer. The tax has already been collected by the 1st respondent pursuant to the VAT Act. When a dispute arose as to which of the two claimants the tax collected should be remitted to, it rightly approached the Court for direction. There is no doubt in my mind that it would amount to double taxation for the same tax to be levied on the same goods and services, payable by the same consumers under two different legislations. This issue is accordingly resolved against the appellant.
Issue 4
Whether the Court below misapprehended the objection of the appellant on the jurisdiction of the trial Court and erred in law when it held that the trial Court had jurisdiction to entertain the plaintiffs action as constituted.
Learned counsel for the appellant submitted that by virtue of Section 251 (1) of the 1999 Constitution, which provides for the exclusive jurisdiction of the Federal High Court, any dispute arising from the application of a State Law, such as the Sales Tax Law of Lagos State does not fall within the jurisdiction of the Federal High Court. He argued that it is the State High Court and not the Federal High Court that has jurisdiction to entertain any dispute dealing with the revenue of Lagos State. He referred to: Shittu Vs Nigerian Agric. Coop. Bank Ltd. (2001) 10 NWLR (Pt.721) 298 @ 317 – 319. Referring to the appellants submissions on the issue of jurisdiction at pages 320 – 327 of the record, he noted that the appellant filed three grounds of appeal on the issue, to wit:
1. The learned trial Judge erred in law when he held that the Federal High Court has the jurisdiction to entertain the Plaintiff’s case as constituted.
2. The learned trial Judge erred in law when he held that the plaintiff’s action is in respect of or connected with taxation of companies which is under the jurisdiction of the Federal High Court to entertain.
3. The learned trial Judge erred in law when he held that the 2nd defendant should have brought a separate action to severe (sic) the claims and cannot bring up the issue by notice of preliminary objection.
He submitted that the lower Court formulated the following issue out of the said grounds of appeal:
Whether the Federal High Court has jurisdiction to entertain the plaintiff’s action as constituted (Grounds 1, 2 and 3) when the judge failed to follow the judgment of a superior Court showing that the appellant had obtained judgment in respect of the subject matter of the proceeding.

…………………….J…………………….

He contended that the Court below failed to appreciate the ground of objection, as the issue distilled from the aforesaid grounds of appeal is quite distinct from the issue of jurisdiction raised therein. He submitted that the Court failed to consider the issue of the justiciability of the 1st respondent’s (as plaintiffs) cause of action before the Federal
High Court, which arose from the present appellant’s demand for remittance of sales tax deemed to have been collected under the Sales Tax Law of Lagos State. He further contended that the Court below misconceived the nature of 1st respondent’s case when it concluded that the money in dispute is tax collected as VAT. He argued that there was no agreement between the parties that the money in dispute was VAT, nor was it so indicated in the originating summons. Learned counsel also submitted that the lower Court had pre-judged the issue to be determined in the substantive suit. He contended that until the money in dispute is finally adjudged to be due to the 2nd respondent under the VAT Act, it cannot be concluded that it forms part of the revenue of the Federal Government.
He argued that it is the administrative or executive decision of an agency of the State Government, as opposed to an agency of the Federal Government, that was being contested by the 1st respondent when it refused to pay the money and subsequently commenced action in Court. He submitted that the lower Court erred in relying on Section 251 (1) (b) of the Constitution in holding that the Federal High Court has jurisdiction to entertain the suit on the ground that the tax in dispute is not a taxation on companies or persons but on goods and services, payable only by consumers and therefore the 1st respondent is not the tax payer but merely a collecting agent for the relevant tax authority. He likened the 1st respondent’s position to that of an employer under the Pay as You Earn (PAYE) scheme where personal Income Tax is deducted at source. He referred to 7Up Bottling Co. Plc. Vs LSBIR (2000) 3 NWLR (Pt.650) 565, a decision of the Court of Appeal.
He submitted that the holding of the lower Court, relying on the decision of this Court in NEPA Vs Edegbero (2002) 18 NWLR (Pt.798) 79, that the Federal High Court had jurisdiction to entertain the suit simply because an agency of the Federal Government is a party, no longer represents the law. He relied on: Onuorah vs Kaduna Ref. Co. Ltd. (2005) 6 NWLR (Pt.921) 393. He contended that having regard to the subject matter of this case, the statutes and parties involved, the Federal High Court does not have exclusive jurisdiction to determine the suit. He submitted that this was why he proposed severance of the claims, which was rejected by the trial Court.
Learned counsel for the 1st respondent, in reply to the above submissions, argued that the lower Court gave proper consideration to the submission of learned counsel for the appellant on the justiciability of the plaintiff’s claim by interpreting Section 251 of the 1999 Constitution and came to the correct conclusion that since the suit was prompted by the 2nd respondent’s administrative action and that the 2nd respondent is an agent of the Federal Government, the Federal High Court had the requisite jurisdiction to entertain the suit. He submitted that the authority of NEPA Vs Edegbero (supra) was properly applied in this case, having regard to Section 251 (1) (r) of the Constitution. With regard to the submission that there was no agreement between the parties that the money collected was VAT, learned counsel referred to the finding of the lower Court that it was on record that the 1st respondent had been paying VAT to the 2nd respondent until the adverse claim of the appellant. He also submitted that having regard to evidence on record (he referred to affidavit in support of the originating summons at pages 23 – 24 of the record), there was no need for the Court to first determine whether the money in dispute belonged to the Federal Government before assuming jurisdiction. He submitted that all the Court needed to consider in determining whether or not it had jurisdiction were the processes filed by the plaintiff and nothing more. He referred to: Onuorah vs KRPC Ltd. (2005) 6 NWLR (Pt.921) 393; Tukur vs. Government of Gongola State (1989) 4 NWLR (Pt.117) 517 @ 561.
In response to the submission that Section 251 (1) (b) of the Constitution is inapplicable in the circumstances of this case since the tax in issue is not the taxation of companies, as envisaged in the section, he referred to Section 14 of the VAT Act, which makes a collecting agent liable to pay tax for failure to remit. He submitted that in the circumstance of his case, it is the company that would be liable. He argued that this provision makes the Act applicable to companies, particularly as it forms part of their returns. He referred the Court to page 94 of the record (Exhibit 10 attached to the further affidavit in support of the Originating

…………………….K…………………….

Summons), which is a letter dated March 4th 2004, addressed to the 1st respondent by the 2nd respondent, advising it of the consequences, under Section 14 of the VAT Act, of failure to file appropriate VAT returns for the period from December 2003 to February 2004. He submitted that the lower Courts finding on the issue at page 426 of the record is correct. He submitted that the submission of learned counsel for the appellant is without factual or legal basis and that the authority of 7UP Bottling Co. Plc. Vs LSBIR (supra) relied upon is inapplicable to the facts of this case.
On the contention that NEPA Vs Edegbero (supra) has been impliedly overruled by the decision of this Court in Onuorah vs KRPC Ltd. (supra), he submitted that the Court did not confine its consideration to the fact that the 2nd respondent is an agency of the Federal Government, but also considered the entire facts and subject matter as disclosed in the originating summons before reaching its conclusion. He also submitted that there is no conflict between the two decisions as this Court in Onuorah’s case confirmed the exclusive jurisdiction of the Federal High Court by virtue of Section 230 (1) (q) of the 1979 Constitution (now Section 251 (1) (p) of the 1999 Constitution). He noted that what this Court decided in Onuorah’s case was that items not listed under Section 251(1) (p) of the 1999 Constitution would still be within the jurisdiction of the State High Court by virtue of Section 236 of the 1979 Constitution (Section 272 of the 1999 Constitution), while items specifically listed under Section 251 (p) of the 1999 Constitution remained within the exclusive jurisdiction of the Federal High Court. He submitted that the claims in Onuorah’s case (supra) were based on simple contract and that since disputes on simple contracts are not among the items listed in Section 251 (P) of the 1999 Constitution, this Court rightly held that the Federal High Court lacked jurisdiction.
He reiterated that there was no dispute arising from the Sales Tax Law of Lagos State, as the issue before the Court was the determination of the rightful body to collect money due as tax in respect of the 1st respondent’s sales to its consumers, and therefore the trial Court was right to have assumed jurisdiction and the Court below was also right to have affirmed the decision. He submitted that there is no known law in Nigeria which prevents the Federal High Court from interpreting or making pronouncements on laws enacted by a State government. He contended that the authority ofShittu Vs Nigerian Agric. Coop. Bank Ltd. (supra) relied upon by learned counsel is not relevant to the facts of this case.
Learned counsel for the 2nd respondent agreed substantially with the submissions of learned counsel for the 1st respondent to the effect that by virtue of Section 251(1)(b) of the 1999 Constitution, the Federal High Court has the power to hear and determine civil causes and matters connected with or pertaining to taxation of companies and that since the 2nd respondent is an agency of the Federal Government, the Federal High Court has exclusive jurisdiction to entertain the suit. He also restated his earlier position that assuming, without conceding, that the VAT Act is not covered by Section 251(1) of the Constitution, that the said Act is deemed to be an act of the National Assembly by virtue of Section 315(1) of the Constitution. He also referred to the exclusive and concurrent legislative powers of the National Assembly as provided for in Section 4. He submitted that the taxing powers of the National Assembly are as provided in Items 59, 62, 67 and 68 of the Exclusive Legislative List and Items 7 and 8 of the Concurrent Legislative List. He submitted that the charges on the supply of goods and services form part of the gross income received by the supplier of the said goods and services and thus qualifies as tax on income. He urged the Court to give full meaning to the phrase taxation of incomes as expressed in Section 251 (1) (b) of the Constitution and to hold that when interpreted in its plain and ordinary meaning, it illustrates the intention of the framers of the Constitution that all forms of income fall under the taxing power of the National Assembly. On the guiding principles of constitutional interpretation, he referred to: AG Federation Vs Abubakar (2007) 10 NWLR (Pt.1041) 1 @ 119; AG Bendel State Vs AG Federation & Ors. (1981) 10 SC 1 @ 132 – 134; (2002) 5 NWLR (Pt.751) 209.
Now, the first issue to consider is whether the lower Court did indeed misconstrue the appellant’s objection on the issue of the Court’s jurisdiction? In his brief of argument at page 320 of the record, learned counsel formulated 4 issues for the determination of the appeal before the lower Court. Issues 1 and 2 are germane and they read as follows:
1. Whether the lower Court (Federal High Court) has jurisdiction to entertain the plaintiff’s action as constituted (Grounds 1, 2 & 3).
2. Whether the learned trial Judge was right when he failed to follow the judgment of a superior Court showing that the appellant had obtained judgment in respect of the subject matter of the proceeding on the ground that the appellant did not avail him copy (sic) of the judgment. (Ground 4).

…………………….L…………………….

Although learned counsel reproduced grounds 1, 2 and 3 of the grounds of appeal and the first issue as formulated by the lower Court, he failed to fully reproduce the part of the judgment of the Court showing how it arrived at the formulation of the issue. I refer to pages 418 – 419 of the record, where His Lordship, Dongban-Mensem, JCA who wrote the lead judgment, stated thus:
After an indebt (sic) consideration of all the briefs, it is my humble opinion that this appeal can be determined under two issues. Accordingly issues 1, 2, 3 and 4 are each merged together. Issues 1 and 2 can be taken together in this appeal. If there exists a judgment of a superior Court showing that the appellant had obtained judgment in respect of the subject matter of the proceedings then the trial Court must obviously lacked jurisdiction to hear and determine the matter.
Issues 3 and 4 are also taken together. If VAT has covered the field, under what circumstance an the plaintiff/1st respondent collect and remit other forms of taxes on the appellant?
The issues are interwoven and it is unnecessary to proliferate them.
(Emphasis mine)
I am of the view that the Court below did not in any way misapprehend learned counsel’s submissions. In the course of his judgment, the learned trial Judge made the following observation at page 220 of the record:
The learned counsel for the defendant referred to the case of Stevenson & Sons Ltd. Vs Brownnell 1912 344 in support of his submission that where one of the defendants to an interpteader has already obtained judgment in respect of the subject matter of the proceedings, the question of interpleader would no longer arise. He did not however avail this Court with copy of any judgment in respect of the subject matter of this proceeding which is to whom between the 1st defendant and 2nd defendant is the plaintiff to remit the money collected as tax by it on its sales to its consumers.
Another ground upon which he sought to persuade the trial Court that it lacked jurisdiction was his contention that the constitutionality and right of the Federal and State Governments to impose and collect taxes had already been considered and determined by this Court in Aberuagba’s case (supra) and by the lower Court in the Nigerian Soft Drinks case (supra). That in the Nigerian Soft Drink case, the lower Court had held that the Sales Tax Law of Lagos State is valid and constitutional and that in Aberuagba’s case, this Court determined the competence of the State House of Assembly to make the Sales Tax Law. Clearly, if indeed there are existing judicial authorities of either the lower Court or this Court specifically deciding the issue that arose in this case in favour of the Sales Tax Law, the trial Court would be bound by the doctrine of stare decisis to follow those decisions and decline jurisdiction. The merger and consideration of issues 1 and 2, which gave rise to issue 1 formulated by the Court below, was quite in order. There was no misapprehension of the issue.
Learned counsel for the appellant has argued that there was no agreement between the parties that the money in issue is VAT and that the trial Court ought to have determined this issue before assuming jurisdiction in the matter. The submission, with due respect to learned counsel, is misconceived. I must emphasise again that the question as to the money collected by the 1st respondent was VAT or not does dot arise. Paragraphs 4 & 5 of the affidavit in support of the originating summons at page 4 of the record, is quite clear on this. It was averred therein as follows:
4. That the applicant has been a taxable person or collecting agent to the 1st defendant [2nd respondent in this appeal] since 1994 and has been remitting tax on its sales to its consumers to it.
5. That sometimes in 2001, the 2nd defendants agent wrote to the plaintiff and demanded remittance of money due as tax on the plaintiffs 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.
(Emphasis mine)
The issue in contention was whether the money already collected by the 1st respondent from its consumers under the VAT Act should be paid over to the appellant rather than the 2nd respondent, as had hitherto obtained. The validity of the Sales Tax Law of Lagos State was also not in issue. As rightly held by the trial Court, the proceedings were in the nature of interpleader proceedings wherein the appellant and the 2nd respondent were required to satisfy the Court as to which of them was entitled to the remittance of the money collected by the 1st respondent. It would also not be correct to say, as learned counsel for the appellant has argued, that the dispute has to do with the revenue of the Lagos State Government.
I shall now consider the main complaint regarding the jurisdiction of the trial Court to entertain the matter. For a Court

…………………….M…………………….

to be competent to adjudicate in a cause or matter, the following conditions must be satisfied:
a. It must be properly constituted as regards numbers and qualifications of the members of the bench, and no member is disqualified for one reason or the other;
b. The subject matter of the case must be within its jurisdiction, and there must be no feature in the case which prevents the Court from exercising its jurisdiction; and
c. The case must come before the Court initiated by due process of law, and upon fulfilment of any condition precedent to the exercise of jurisdiction.
See: Madukolu Vs Nkemdilim (1962) 2 SCNLR 341; (1962) 1 ALL NLR 587 at 594; Skenconsult (Nig.) Ltd. Vs. Ukey (1981) 1 S.C. 6 at 62; Inakoju vs Adeleke (2007) 4 NWLR (Pt.1025) 427 at 588 F.
It is equally trite that where the Court lacks jurisdiction to entertain a cause or matter, the entire process, no matter how well conducted, is an exercise in futility. The proceedings would amount to a nullity ab initio and liable to be set aside.
In determining whether or not the Court has jurisdiction to entertain a cause or matter it is the originating processes filed by the plaintiff that would be considered. See: A.G. Federation vs Guardian Newspapers Ltd. (1999) 9 NWLR (Pt.618) 187; (1989) 5 SC (Pt.III) 59; Uwaifo Vs. A.G. Bendel State (1982) 7 SC 124; Adeyemi v. Opeyori (1976) 6 10 SC 31; Amaechi Vs. INEC (No.2) (2007) 18 NWLR (Pt.1065) 98.
In the course of this judgment several references have been made to the cause of action that gave rise to this appeal. I need not repeat it again. Suffice it to say that both lower Courts were of the opinion that the trial Court had jurisdiction to entertain the suit on two grounds: (a) by virtue of Section 251 (1) (b) of the Constitution and (b) having regard to the fact that an agency of the Federal Government is a party – Section 251 (1) (r). It is not correct, as argued by learned counsel for the appellant, that the Courts simply relied on the fact that an agency of the Federal Government is a party. They also considered the subject matter of the action. This is in keeping with decisions of this Court in cases such as: Ohakim vs Agbaso (2010) 19 NWLR (Pt.1226) 172 @ 236 237 G D; Salim Vs. CPC (2013) 6 NWLR (Pt.1351) 501; Ucha Vs. Onwe (2011) 4 NWLR (Pt.1237) 386, to the effect that in determining the jurisdiction of the Federal High Court, notwithstanding the fact that one of the parties is an agency of the Federal Government, the subject matter of the dispute is also relevant.
A ‘taxable person’ is defined in Section 46 of the VAT Act as:
“a person (other than a public authority acting in that capacity) who independently carries out in any place an economic activity as a producer, wholesale trader, supplier of services (including mining, and other related activities) or person exploiting tangible or intangible property for the purpose of obtaining income therefrom by way of trade or business.”
While it is true that the VAT Act regulates the tax payable by consumers on goods and services, I am inclined to the view expressed by the Court below at page 426 of the record, to wit:
“… the 1st respondent is subject to the VAT Act (collects and remits VAT) and could be held liable for default (See Section 18 VAT Act). The company is a person subject to Federal taxation and is also known as taxable person under VAT Act (see Section 8 VAT Act). … A company that fails to collect the VAT from consumer will be made to pay the tax (See Section 19 VAT Act). Furthermore, while a company (collecting agent or taxable person) can be seriously liable under the VAT Act the consumer (who is at large) cannot be liable. (See Sections 15, 18, 25 and 26 VAT Act.) Subject matter falls within the subjects listed under Section 251 [of the 1999 Constitution] and the party or one of the parties is the Federal Government or an agent of the Federal Government, then the only Court with jurisdiction at first instance is the Federal High Court. The learned trial Judge accordingly rightly applied the provisions of Section 251 and the decisions in Oshiomole and NEPA (supra).
I am unable to fault the above finding after my examination of the relevant provisions of the Constitution and the VAT Act. I agree that having regard to the subject matter of the dispute and the fact that one of the parties is an agency of the Federal Government, the Federal High Court, pursuant to Section 251 (1) (b) & (r) of the 1999 Constitution had the requisite jurisdiction to entertain the suit. Learned counsel for the appellant has failed to persuade me that the findings of the two lower Courts are

…………………….N…………………….

perverse. In the circumstances, this issue is resolved against the appellant.
Issue 5
Whether the Court below misdirected itself on the submissions of the appellant that it should invoke its power under S.16 of the Court of Appeal Act to determine the merit of the case.
This issue has to do with learned counsel’s contention that the Court below misconstrued the basis upon which, in his oral submissions at the hearing of the appeal, he urged it to exercise its power under Section 16 of the Court Appeal Act to determine the merit of the case and unfairly castigated him in the process.
He submitted that his contention was that in the event that the Court found merit in the objection to the jurisdiction of the Federal High Court, rather than striking out or remitting the case to the State High Court, it should invoke its powers under the Court of Appeal Act and assume jurisdiction to determine the suit, as the State High Court would also lack jurisdiction to determine the issue regarding both legislations i.e. it would only have jurisdiction to determine an issue relating to its Sales Tax Law and not the VAT Act. He submitted that the Court below erred in viewing his submission as contending mutual bias to the effect that the State High Court would likely find in favour of its state Law while the Federal High Court would likely find in favour of the VAT Act.
Interestingly, learned counsel then concluded by submitting thus at paragraph 3.4.18 of his brief: In exercise of its power under S.16 of the Court of Appeal Act, the Court was however right to have considered the other issues raised in the appeal on their merit. What then is the complaint? Whether the Court rightly or wrongly perceived learned counsel’s argument. From his own showing, it did consider all the issues raised in the appeal on their merit. He may not agree with the Court’s conclusion, but I see no basis for the complaint under this issue. In my view, it is merely academic and not worthy of the precious time of the Court. I accordingly discountenance the submissions made in this regard.
In conclusion, I hold that this appeal lacks merit. It is accordingly dismissed. The judgment of the Court of Appeal, Lagos delivered on 18th January 2007 is hereby affirmed. The parties shall bear their respective costs in the appeal.
MUSA DATTIJO MUHAMMAD, J.S.C.: Having read the draft of the lead judgment of my learned brother KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN JSC just delivered, I am in agreement with the reasons and conclusion outlined in the said judgment.
The issue the appeal raises is which of the two legislations, the Value Added Tax Act and the Sales Tax Law of Lagos State, apply to the facts that brought about the appeal. The summary of the facts have been captured fully in the lead judgment. This contribution, given purely for the sake of emphasis and in support of the lead judgment, draws from the facts as so outlined.
The two legislations, the Value Added Tax and the Sales Tax Law of Lagos State, given their schedules, dwell on the same subject matter, to wit, tax on consumable items payable by customers. By virtue of Section 4(5) of the 1999 Constitution (as amended) the Value Added Tax Act is deemed to have covered the field and excludes the operation of the Sales tax law of Lagos State being a State law.
Learned appellant’s counsel simply cannot be right to insist that the State law still operates notwithstanding the clear provision of Section 4 (5) of the Constitution which provides to the contrary. The principle is that the Value Added Tax Act that has provided for the very tax the State Sales Tax Law provides covers the field putting the latter in abeyance and inoperative. See AG Abia State & Ors V. AG of the Federation (2002) 6 NWLR (pt 763) 264 and AG Ogun State v. AG Federation (1982) LPELR-11 (SC).
Learned respondent’s counsel is entirely right in his submission that, on the authorities, both legislations cannot simultaneously operate all the more so because persons will be subjected to double taxation. The lower Courts judgment which recognizes the harm inherent in the contemporaneous application of both legislations and the undesirability, nay impossibility, of such an unjust procedure, given Section 4 (5) of the 1999 Constitution (as amended), must prevail.
Relying further on the fuller reasons marshaled out in the lead judgment, I also dismiss this unmeritorious appeal, affirm the lower Court’s judgment and order that parties bear their respective costs.
JOHN INYANG OKORO, J.S.C.: I read in advance the Lead Judgment of my learned brother, Kekere-Ekun, JSC

…………………….O…………………….

just delivered and I am in agreement with both the conclusions and the reasons advanced therein. My learned brother has admirably resolved all the issues submitted by the parties for the determination of this appeal and I intend to make a few comments only in support of the judgment.
The main issue in this appeal is whether the Court of Appeal was right when it held that the Value Added Tax Act has covered the field of Sales Tax and its provisions over the Sales Tax Law of Lagos State. I rely on the facts as fully outlined in the lead judgment.
There is no doubt that both the Value Added Tax Act and the Sales Tax Law of Lagos State provide for the collection of tax from the customer on consumable items stated in the schedules of the two laws. The rates and goods upon which charges are made under both laws are similar. It follows naturally that there is unhealthy competition between the two laws, thus throwing the consumer and collection agents into confusion. This is not the purpose of governance. Be that as it may, the law does not leave us without a remedy. By Section 4(5) of the 1999 Constitution of the Federal Republic of Nigeria (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 the inconsistency, be void. I shall limit myself to the issue before this Court. We are neither asked to determine on the validity of Value Added Tax Act nor the Sales Tax laws of Lagos State. The issue for determination is whether the Value Added Tax Act has covered the field such that the Lagos State Sales Tax Law remains in insignificance.
The doctrine of covering the field is essentially that where the main, principal or superior law has covered a given field or area, any other subsidiary law made in that area or field cannot operate side by side with the main, principal or superior law. If the inferior law is inconsistent with the principal law, it has to be declared void to the extent of its inconsistency. But where it is consistent with the principal law, it has to be left in abeyance i.e. inoperative pending when the principal law may give way. See Saraki v Federal Republic of Nigeria (2016) LPELR – 40013 (SC), MPPP V INEC & Ors (2015) LPELR – 25706 (SC) AG Abia State & Ors v AG of the Federation(2002) LPELR 671 (SC), (2002) 6 NWLR (pt 763) 264. This Court, in Attorney General of Ogun State v Attorney General of Federation (1982) LPELR – 11 (SC), Per Fatayi – Williams, JSC (as he then was) held on this issue as follows:-
It is of course, settled law, based on the doctrine of covering the field with which I shall deal in more detail later, that if Parliament and a Regional Legislature are empowered to make laws, and a Regional legislature enacts an identical law on the same subject matter, the law made by Parliament shall prevail. That made by the Regional legislature shall become irrelevant and therefore impliedly repealed.
With due respect to the learned counsel for the appellant, the above principle of law, and without much ado places the Sales Tax Law of Lagos State in abeyance. Should the two laws be allowed to operate simultaneously, it will amount to double taxation on the same goods and services. The consumer would have to suffer under the weight of the two laws while the two tiers of government smile to the bank. This is unhealthy and must not be allowed to stand.
On the whole, I agree with the Court below that the Value Added Tax Act has fully covered the field and nothing was left for the Sales Tax Law of Lagos State to glean. I also agree that the imposition of both laws would create double taxation. In consequence thereof, the Federal Board of Inland Revenue, the 2nd Respondent herein is entitled to receive the tax in contention from the 1st Respondent Eko Hotels Ltd on behalf of the Federation for which the appellant is an integral Part.
From all I have said above and the more elaborate adumbration in the lead judgment, I hold that this appeal lacks merit and is hereby dismissed by me. The judgment of the Court of Appeal is hereby affirmed. I also agree that parties do bear their respective costs.
AMIRU SANUSI, J.S.C.: The leading judgment prepared by my learned brother Kudirat Motonmori Olatokunbo Kekere-Ekun, JSC just delivered, was made available to me before now.
Having carefully read same, I must say that my lord has ably and painstakingly dealt with all the salient issues canvassed by the parties’ learned counsel when arguing the appeal. I am at one with the reasoning and conclusion arrived at in the lead judgment that this appeal is devoid of any merit and ought to be dismissed. While adopting the reasoning in the judgment of my learned brother Kudirat Motonmori Olatokunbo Kekere-Ekun, JSC as mine, I also have no hesitation in dismissing this appeal and affirming the decision of the lower Court. I will also decline to award any costs hence I order that each party should bear its own costs.

…………………….P…………………….

EJEMBI EKO, J.S.C.: I had the privilege of reading in draft the judgment just delivered in this appeal by my learned brother, HON. K. M. O. KEKERE-EKUN, JSC. I need only to just add a few comments of mine.
The constitutional doctrine of covering the field only applies in a federal set up where legislative powers are shared between the central government and the federating units/state governments. Under the 1999 Constitution the legislative powers of the Federation and the States are shared thus –
4.(1) The legislative powers of the Federal Republic of Nigeria shall be vested in a National Assembly for the Federation which shall consist of a Senate and a House of Representatives.
(2) The National Assembly shall have power to make laws for the peace, order and good governance of the Federation or any part thereof with respect to any matter included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution.
(3) The power of the National Assembly to make laws for the peace, order and good governance of the Federation with respect to any matter included in the Exclusive Legislative List shall, save as otherwise provided in this Constitution, be to the exclusion of the House of Assembly of States.
(4) In addition and without prejudice to the powers conferred by Subsection (2) of this Section, the National Assembly shall have power to make laws with respect to the following matters, that is to say –
(a) any matter in the Concurrent Legislative List set out in the first Column of Part II of the Second Schedule to this Constitution to the extent prescribed in the Second Column opposite thereto; and
(b) any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution.
(5) 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 the inconsistency be void.
(6) The Legislative powers of a State of the Federation shall be vested in the House of Assembly of the State.
(7) The House of Assembly of a State shall have power to make laws for the peace, order and good governance of the State or any part thereof with respect to the following matters, that is to say –
(a) any matter not included in the Exclusive Legislative List set out in part 1 of the Second Schedule to this Constitution;
(b) any matter included in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to this Constitution to the extent prescribed in the Second column opposite thereto; and
(c) any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution.
The issue of covering the field is not much of any problem as regards Subsections (1), (2) & (3) of Section 4 of the Constitution. It is only in respect of Section 4 (4) & (5) that the issue of covering the field poses a problem. In respect of any matter in the concurrent list both the National Assembly and the State House of Assembly are empowered to make laws. However, whenever both the National Assembly and the State House of Assembly purport to make laws on any common item or matter in the concurrent Legislative List two situations may arise thus
I. If the Law enacted by the House of Assembly of a State is inconsistent with the Law validly enacted by the National Assembly, the law made by the National Assembly shall prevail, and the Law made by the House of Assembly shall, to the extent of inconsistency, be void. Section 4(5) of the Constitution is emphatic on this; and
II. Where the Laws made by both the National Assembly and the House of Assembly of a State with regard to the same issue or matter in the Concurrent Legislative List are not inconsistent, the Law made by the National Assembly enjoys superiority or paramountcy over the Law enacted on the subject by the House of Assembly of the State.
The decision of this Court in A. G, ABIA v. A. G, FEDERATION (2002) 6 NWLR (Pt. 763) 264 at 435 F puts it succinctly thus
The doctrine (of covering the field) however renders the paramount legislation predominant and the subordinate legislation remains inoperative so long as the paramount legislation remains operative. Where, of course, there is obvious inconsistency, the subordinate legislation is void.
The dispute in this case is not whether the Value Added Tax Act and the Lagos State Sales Tax Law are inconsistent. I should be careful not to state: as between the two statutes which is more predominant than the other. There is no counter-claim, to the interpleader action instituted by the 1st Respondent, Eko Hotels Limited, as the plaintiff which merely sought to be determined that: as between the Appellant and the 2nd Respondent to whom shall the 1st Respondent pay the tax

…………………….Q…………………….

it collected on services it rendered to its customers?
The Value Added Tax Act was promulgated in 1993 as a Decree during the Military era, when the Federal Military Government was empowered to enact laws on just any matter, unrestrained by any Legislative List as Section 4 of the extant Constitution does. At the commencement of the 1999 Constitution it was, and still is, an existing Law within the context of Section 315 of the said Constitution that provides inter alia-
315.(1) Subject to the provisions of this Constitution, an existing Law shall have effect with such modifications as may be necessary to bring it into conformity with this Constitution and shall be deemed to be-
(a) an Act of the 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 law; and
(b) a Law made by a House of Assembly to the extent that it is a law with respect to any matter on which a House of Assembly in empowered by this Constitution to make laws.
As I earlier stated, there is no substantive issue made in this action on the question: whether or not the Value Added Tax Act could be deemed either as an Act of the National Assembly – with respect to – which the National Assembly is empowered to by this Constitution to make Laws, or a law deemed enacted by the House of Assembly of Lagos State.
Suffice for now, that I say that an Act of the National Assembly, for purposes of covering the field, can only be said to be a predominant paramount legislation if it was validly enacted, or could be deemed to have been validly enacted, with respect to any matter the National Assembly is empowered by the Constitution to make laws. An Act of the National Assembly enacted in respect of any residual matter, not being a matter either in the Exclusive Legislative or the Concurrent Legislative List, cannot be arrogated a predominant paramount legislation so as to override any law validly enacted by a House of Assembly of a State in respect of any residual matter. The determinant factor in covering the field is the validity of the predominant paramount legislation viz-a-viz the subordinate legislation.
I am not aware of any decision of this Court directly affirming the validity of the Lagos State Sales Tax Law viz-a-viz the Value Added Tax Act, and vice versa, justifying the plea of stare decisis by the Appellant. The Court of Appeal had posited, in NIGERIAN SOFT DRINKS LTD v. ATTORNEY- GENERAL, LAGOS STATE (1987) 2 NWLR (pt. 57) 444, that Section 2 of the STL Cap 175.Laws of Lagos State is neither unconstitutional nor in conflict with the provisions of Item 61 in the Exclusive Legislative List under the 1979 Constitution (which item 61 is now item 62 of the extant Constitution) or Paragraph 7 & 8 of the Concurrent List. The decision in the NIGERIAN SOFT DRINKS LTD V. A. G, LAGOS STATE (supra), for purposes of the plea of stare decisis, did not pronounce that any provisions of the VAT Act had either covered the field covered by Section 2 of the STL of Lagos State or was in conflict with any provision of the STL of Lagos State.
The decision of this Court, A. G, OGUN STATE v ABERUAGBA (1985) 1 NWLR (pt. 3) 395, handed down several years before the promulgation of the VAT Act, 1993, did not decide that provisions of a statute in pari materia with any provisions of the VAT Act had either covered the field or was in conflict with any provisions of the STL of Lagos State or Ogun State. The ratio decidendi of theABERUAGBA case (supra) is that, by the exclusive legislative powers of the National Assembly in respect of international and inter State trade and commerce, the National Assembly can enact a law enabling the Federal Government to levy and collect taxes on goods brought into the country and or moving inter-State. It also held that, in respect of intra State commerce the State Government can levy and collect sale taxes on some consumer goods, transactions and services. It is for this reason that I hold the view that ABERUAGBA case (supra) cannot be pleaded by the Appellant for purpose of stare decisis.
The appellant, saddled with the burden of establishing that the decision appealed was erroneous, has not satisfied me that the lower Court’s decision the subject of this appeal was erroneous.
The issue at the trial Federal High Court, from the three reliefs thereat, related to the tax or revenue accruing to the Federal Government. The issue sufficiently agitates the jurisdiction of the Federal High Court donated by Section 251(1)(a) & (b) of the 1999 Constitution. The Federal High Court, in my opinion, was a proper forum for the determination of the said three reliefs brought by the 1st respondent, as the plaintiff.
In view of my foregoing stance and the reasons contained in the opinion of my learned brother, HON. K. M. O. KEKERE-EKUN, JSC, I hereby dismiss the appeal in its entirety and affirm the decision of the lower Court. Parties shall bear their respective costs.

Appearances:
S.A. Quadri, Esq. (DCL, Lagos State) with him, E. R. Agu (Mrs.) (CSC, Ministry of Justice, Lagos State) For Appellant(s)
M.N.O. Olapade, Esq. with him, Ibiye Tyroll Thompson for 1st Respondent.
B.H. Oniyangi (Mrs.) with her, Ibrahim Abdullah for 2nd Respondent
For Respondent(s)