KUALA LUMPUR – The high court here has set September 28 to deliver its decision on senior lawyer Tan Sri Muhammad Shafee Abdullah’s application for a stay of proceedings in a suit filed against him by the Inland Revenue Board (IRB) seeking RM9.41 million in alleged unpaid taxes.
Confirming the matter with The Vibes today, Shafee said the application was filed on several grounds, one of which was that allowing IRB to continue with the suit will render his appeal against the inland revenue director-general “inconsequential”.
Shafee’s claim is due to how the Income Tax Body Special Commissioners (SCIT) has yet to respond to his appeal filed in 2019 under Section 99 of the Income Tax Act 1967 (ITA), which affords rights to taxpayers aggrieved by assessments raised by the board.
“To date, the SCIT has yet to hear or determine my appeal,” he asserted, noting that the matter had been submitted before judicial commissioner Roz Mawar Rozain by his lead counsel Datuk Seri Rajan Navaratnam.
Shafee said that in 2021, IRB had proceeded to file a suit for recovery of alleged unpaid taxes pursuant to Section 106 of the act, with lawyer Rajan arguing that since the act has conflicts on the rights of a taxpayer, any ambiguity should lean in favour of the taxpayer.
Rajan, assisted by lawyers Farhan Shafee and Wee Yeong Kang, had also submitted that allowing the proceedings to continue at the high court may attract the legal principle of “res judicata” at the SCIT stage, referring to how a decision made cannot be revisited.
Additionally, Rajan had raised in his defence statement that since the assessments raised by IRB were “time-barred”, the issue of limitation should be determined by SCIT and not the courts “by way of recovery of a civil debt.”
Lamenting how Section 106 of the ITA is “harsh, arbitrary and goes against the federal constitution,” Shafee said that the test employed for staying proceedings is different from what is required for a staying execution of a judgement, with the courts having discretionary powers to grant the former.
Wee had informed Bernama that the proceedings on September 28 will take place online via Zoom at 11am.
The application was filed by Shafee on November 3 last year, which sought, among others, an order for the proceedings to be temporarily suspended pending the outcome of an application filed by imprisoned former prime minister Datuk Seri Najib Razak and his son, Datuk Mohd Nazifuddin Mohammad Najib, regarding the payment of income tax – amounting to RM1.69 billion and RM37.6 million, respectively, to the IRB, before the Federal Court.
Among the grounds cited by Shafee was that he had filed a notice of appeal against the notices on additional assessment for the assessment years 2011, 2012, 2013, 2014 and 2016 to the IRB on June 27, 2019, apart from the existence of special circumstances warranting the stay.
On September 27 last year, IRB applied for its suit against Shafee – which was filed on May 26 – to be decided through a summary judgement, on the grounds that the defendant had failed to pay the tax arrears amounting to RM9,414,708.32 within the stipulated time.
Shafee, who temporarily served as Najib’s lawyer for his SRC International Sdn Bhd case, is also facing two charges of receiving RM9.5 million in illegal proceeds from Najib and two charges of making false declarations to the IRB. – The Vibes, September 13, 2022
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