Justice Peter Lifu of the Federal High Court, Abuja, has nullified provisions of the Delta State Hotel Occupancy, Restaurants and Departmental Stores Consumption Tax Law, 2017, which imposed a five per cent consumption tax on transactions already covered by the federal Value Added Tax (VAT) regime.

Justice Lifu, in a judgment delivered on October 9, 2026, and obtained by The Guardian yesterday, declared the challenged provisions invalid and set aside Sections 3 and 4 of the Delta State law, as well as Section 7(b), Item 13 of the Schedule to the Taxes and Levies (Approved List for Collection) Act (Amendment) Order No. 77 of 2015.

The court also issued a perpetual injunction restraining the Delta State Attorney-General and Commissioner for Justice, the Delta State Board of Internal Revenue, and their agents or representatives from implementing or enforcing the affected provisions.

The suit was filed by the Nigeria Employers’ Consultative Association (NECA) and Retail Supermarkets Nigeria Limited, which operates Shoprite stores, against the Attorney-General of the Federation, the Delta State Attorney-General and Commissioner for Justice, and the Delta State Board of Internal Revenue.

The claimants commenced the action by filing an Originating Summons through their counsel, Dr Joseph Nwobike (SAN) of Osborne Law Practice, who led their legal team, which included G.D. Nwani.

J.O. Obaje represented the Attorney-General of the Federation, while Isaiah Bozimo (SAN) appeared for the Delta State defendants.

In the suit, NECA and Shoprite challenged the constitutionality and validity of the disputed provisions, arguing that the additional consumption tax created an overlapping tax burden on goods and services already subject to VAT.

They contended that the state could not lawfully impose a separate consumption tax that substantially overlapped with the federal VAT regime, as this would increase the tax burden on businesses and consumers.

The claimants specifically sought declarations that Sections 3 and 4 of the Delta State law, which provide for the imposition and collection of the consumption tax, were inconsistent with the federal VAT framework and exceeded the state’s legislative competence to the extent of the alleged overlap.

They also challenged Section 7(b), Item 13 of the Schedule to the 2015 amendment order, arguing that it could not validly authorise the imposition of a separate consumption tax on transactions already covered by VAT.