At the lower court, the FIRS had appealed for a stay of execution, but the court dismissed it on the basis that it would "negate the principle of equity".
On September 10, the Attorney-general of Lagos, Moyosore Onigbanjo, applied to be joined as a party in the appeal. The state had also passed a VAT bill into law.
Onigbanjo had submitted that the outcome of the appeal would have a direct impact on the state.
"Even the appellant recognised that the Lagos state government has an interest in the matter in their affidavits in support of stay of execution where copious reference was made to the Lagos state government."
Delivering ruling on Thursday, Haruna Tsammani, presiding judge, held that Lagos state has been able to prove that it has a direct interest in the subject matter of this appeal.
He agreed that all the reliefs sought by the Rivers state government which were granted at the high court made reference to "any other state of the federation."
"It is, therefore, my finding that the applicant has been able to establish that he has a direct case in the subject matter of this appeal.
"The application for joinder is in the appeal as the third respondent is accordingly granted."
The court also ordered that all the processes in the suit should be served on the state
