ANN/THE STAR – The Federal Court in Malaysia ruled that former prime minister Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin need to settle MYR1.69 billion and MYR37.6 million in unpaid taxes. The dismissal of the appeal was made yesterday, with the apex court dismissing the appeal by Najib and Mohd Nazifuddin.
Najib and Nazifuddin were given the nod by the Federal Court on May 10 to proceed with their appeals against the decisions of the two High Courts in allowing the LHDNM’s applications to enter a summary judgement to recover more than MYR1.7 billion in tax arrears from them.
Both Najib and Nazifuddin lost their appeals in the Court of Appeal last September to set aside the summary judgement.
A summary judgement is obtained when the court decides on a case through written submissions without a full trial and without calling witnesses.
In handing down the Federal Court’s decision, Justice Tan Sri Nallini Pathmanathan said the IRB is levying tax on the appellants in the same manner it does for all citizens of the nation.
“The appellants have not been singled out for discriminatory treatment nor treated in a manner not provided for in the Income Tax Act I(TA). There is no evidential basis on the record to support such a contention.
“Accordingly there is no basis for the contention that there has been a contravention of Article 8 of the Federal Constitution,” she said.
She said that the appellants can still bring their case for reassessment before the Special Commissioners of Income Tax (SCIT). “However, it is equally clear from a perusal of the ITA 1967 as a whole, that it is not a final determination of the sum due and owing by the taxpayer because Section 99 (1) of the ITA remains untouched and enables the taxpayer to proceed with his grievances through the SCIT and the entire hierarchy of the courts,” she said.
Justice Nallini pointed out that the court, under Section 106 of the ITA, is fulfilling the purpose of recovery or collection only.
“It is not undertaking a full judicial adjudicatory role. Its full adjudicatory judicial power is deferred to the appeal arising from the decision of the SCIT by way of questions of law, or administrative or constitutional judicial review at a subsequent stage.
“This is consonant with the ‘pay first dispute later’ mode of tax imposition by the Government. In our full grounds of judgement, we have examined cases from South Africa, Australia, Hong Kong and Ghana. It is evident that the pay first, dispute later mechanism inherent in the ITA is utilised the world over,” she added.
