A Federal High Court in Lagos on Monday issued a variation to its interim orders, restraining the implementation of the Hotel Occupancy and Restaurant Consumption Law, Laws of Lagos State 2015.
Justice Mohammed Aikawa had issued the interim orders on March 21 following a suit filed by Registered Trustees of Hotel Owners and Managers Association in Lagos, challenging the new Hotel Occupancy and Restaurant Consumption Laws of Lagos State.
Joined as defendants are the Attorney General of Lagos State and the Federal Inland Revenue Service (FIRS).
The plaintiff is urging the court to strike out the Hotel Occupancy and Restaurant Consumption Law, Cap H8, Laws of Lagos State 2015.
The plaintiff also asked the court to restrain the defendants from enforcing the provisions of its new Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations 2017.
The law introduces an increase in consumption tax in addition to a Value Added Tax on every purchase or service rendered by hotels, restaurants, fastfood outlets, bars and night clubs.
Justice Aikawa had on March 21, issued an interim order, restraining Lagos State from further enforcing the law pending the determination of the case.
At the last adjournment on April 17, counsel to the first defendant, Mr Lawal Pedro (SAN), had informed the court of his motion, seeking a variation of the court’s interim orders made on March 21.
Meanwhile, when the case was mentioned on Monday, Mr Olasupo Shasore (SAN), announced appearance for the plaintiffs and informed the court that he had reached an agreement with the defence counsel for a variation of the existing orders, pending determination of the suit.
He added that it was also agreed that no new measures would be introduced by the defendants until determination of the substantive suit.
In response, Pedro confirmed the position, and added that the restraining orders be lifted on the Hotel Occupancy and Restaurant Consumption Law, Cap H8, Laws of Lagos State 2015 which has been in force in the state.
According to him, the restraining orders on the Regulation 2017 can be allowed to subsist pending determination of the suit.
He then moved his motion, seeking variation of the interim orders.
The court consequently ruled: “An Order is hereby made, varying the orders made on March 21, 2018.
“The variation shall be to the extent that the restraining orders against the first defendant from implementing the Hotel Occupancy and Restaurant Consumption Laws of Lagos State, be expunged from the said order, while retaining the restraining orders on Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations 2017.”
The court added that no new measures should be introduced by the first defendant pending the determination of the suit.
Aikawa adjourned the case until June 4 for hearing of the substantive suit.
The plaintiff are urging the court to restrain the State from enforcing or implementing paragraphs 4, 5, 6, 7, 8, and 11 of the Lagos State Hotel Occupancy and Restaurant (Fiscalisation) Regulations 2017.
The plaintiff is also asking the court to restrain the defendants, its agents from visiting members of the plaintiffs “between March 1 and March 10, 2018, or any other period before or thereafter,” pending the determination of the motion on notice.
The plaintiffs contend that in 2009, the Lagos House of Assembly enacted the Hotel Occupancy and Restaurant Consumption Law which seeks to impose tax on goods consumed in hotels, restaurants, event centres, or night clubs within Lagos.
They argued that by Section 9 of the Law, the first defendant through the Lagos State Internal Revenue Service (LIRS) is empowered to make regulations for the collection and remittance of taxes and for proper administration of the Law.
According to the plaintiff, in exercise of its powers, the Chairman of the LIRS has now made the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulation 2017.
They argued that the regulation is made to set out measures which allows the first defendant through the LIRS to commence enforcement of the law on members of the plaintiff.
The plaintiffs are, therefore, urging the court to grant the reliefs sought.
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