Court hears hotel owners suit against Lagos govt

Governor Akinwunmi Ambode of Lagos state
Governor Akinwunmi Ambode of Lagos state [Photo credit: Instagram - akinwunmiambode]

A Federal High Court in Lagos on Tuesday fixed May 7 to hear a suit challenging the new Hotel Occupancy and Restaurant Consumption Law of Lagos State.

The Registered Trustees of Hotel Owners and Managers Association in Lagos had filed the suit and joined as defendants the Attorney General of Lagos State and the Federal Inland Revenue Service.

In his ruling, the judge, Rilwan Aikawa, set the date for hearing of all pending applications after counsel representing parties in the suit had informed the court of service of various processes in the suit.

When the case was called on Tuesday, Olasupo Shashore appeared for the plaintiffs, while Lawal Pedro appeared for the state.

Mr Pedro informed the court that the first defendant had received the plaintiff’s motion, but added that he had filed a motion seeking for an extension of time to file a counter-affidavit in opposition to the suit.

Mr Shasore did not oppose the motion for extension of time but informed the court that he had received another application to vary the orders of the court and urged the court that both motions should be taken together on the return date.

The court granted the application and adjourned the case until May 7 for hearing of all pending applications.

At the last adjournment on March 21, the court had issued an interim order restraining the defendant 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, fast food outlets, bars and night clubs.

Mr Aikawa had issued an interim order, restraining the State from further enforcing the law, pending the determination of the case.

The plaintiff is urging the court to strike out the Hotel Occupancy and Restaurant Consumption Law Cap H8, Laws of Lagos State 2015.

They 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 contends 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 under 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, Chairman of the LIRS has now made the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulation 2017.

They argued that the regulation was made to set out measures which allow 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 their reliefs sought.

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