On 24th August 2021, the Tax Appeal Tribunal (the “Tribunal”) delivered a ruling in Multichoice Nigeria Limited v Federal Inland Revenue Service (the “Multichoice case”. In that ruling, the Tribunal held that Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (“FIRS Act”) constitutes a condition precedent to the hearing of appeals filed before the Tribunal.
The appellant (“Multichoice”) filed this appeal to challenge a tax assessment of about N1.8 Trillion imposed by the Federal Inland Revenue Service (“FIRS”). The FIRS orally applied to the Tribunal that Multichoice be compelled to comply with Paragraph 15(7) of the Fifth Schedule to the FIRS Act because the Tribunal would lack the jurisdiction to hear the appeal if Multichoice did not comply. Paragraph 15(7) of the Fifth Schedule to the FIRS Act provides as follows:
“At the hearing of any appeal if the representative of the Service proves to the satisfaction of the Tribunal hearing the appeal in the first instance that:
(a) the appellant has for the year of assessment concerned, failed to prepare and deliver to the Service returns required to be furnished under the relevant provisions of the tax laws mentioned in paragraph 11;
(b) the appeal is frivolous or vexatious or is an abuse of the appeal process; or
(c) it is expedient to require the appellant to pay an amount as security for prosecuting the appeal;
the Tribunal may adjourn the hearing of the appeal to any subsequent day and order the appellant to deposit with the Service, before the day of the adjourned hearing, an amount, on account of the tax charged by the assessment under appeal, equal to the tax charged upon the appellant for the preceding year of assessment or one half of the tax charged by the assessment under appeal, whichever is the lesser plus a sum equal to ten percent of the said deposit, and if the appellant fails to comply with the order, the assessment against which he has appealed shall be confirmed and the appellant shall have no further right of appeal with respect to that assessment.”