PUTRAJAYA – The Court of Appeal today dismissed an appeal by former prime minister Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin Najib against a high court ruling that they pay additional income tax arrears amounting to RM1.69 billion and RM37.6 million, respectively, to the Inland Revenue Board (IRB).
Justice Datuk Abdul Karim Abdul Jalil, leading a three-judge panel, when delivering the unanimous decision said the court found no merit in the appeal filed by the duo, and that no error was made in the ruling by the high court judges concerned.
“As such, the appeal by the two is dismissed with cost at RM10,000 each,” he said during the virtual proceedings.
The other judges on the panel are Datuk Vazeer Alam Mydin Meera and Datuk Supang Lian.
Najib and Nazifuddin need not pay the additional income tax arrears yet, as the court allowed their application for a temporary stay of the decision.
They are appealing against the decisions of two separate high courts allowing IRB’s applications to enter a summary judgment to recover tax arrears of RM1.69 billion from Najib and RM37.6 million from Nazifuddin.
Karim in his judgment said the court found that Section 106(3) of the Income Tax Act 1967 does not contravene Article 121 of the federal constitution, and that the court has judicial power to hear and decide disputes under Section 106, even in the circumstance that the matters are not allowed to be raised for court consideration.
Section 106(3) states that in any proceeding under the said section, the court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal, or incorrectly increased.
Lawyer Tan Sri Muhammad Shafee Abdullah applied for a temporary stay of execution of today’s decision as the defence will file an application for leave to appeal at the Federal Court.
Karim allowed the temporary stay, saying both appellants have to file a notice of appeal no later than next Tuesday.
On July 22 last year, high court judge Datuk Ahmad Bache allowed IRB’s application for a summary judgment to be entered against Najib in its suit to recover RM1.69 billion in taxes from the latter for the period between 2011 and 2017.
A summary judgment is where the court decides a particular case summarily, without calling witnesses to testify in a trial.
As for Nazifuddin, high court judge Ahmad Zaidi Ibrahim on July 6 last year ordered him to pay RM37.6 million in unpaid taxes to IRB after allowing the agency’s application to enter a summary judgment against him in its tax arrears suit seeking to recover the unpaid amount for the assessment years 2011 to 2017.
On February 4 this year, the board issued a bankruptcy notice against Najib for his failure to pay the sum, as the summary judgment was not stayed.
Nazifuddin was also served a bankruptcy notice on April 30 over his failure to pay the amount as ordered by the high court. – Bernama, September 9, 2021
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