Court denies Najib's stay bid on RM1.69b tax suit

Najib Abdul Razak failed to obtain a stay over the government's RM1.69 billion tax suit against him.

Justice Ahmad Bache denied the application by the former prime minister's legal team during open-court proceedings at the Kuala Lumpur High Court this afternoon.

The judge also ordered Najib to pay cost of RM15,000.

In reading out the 28-page judgment, Ahmad said that Najib not only failed to prove the existence of special circumstances that merit the stay but the said application was premature in nature.

“After hearing submissions by both parties, this court opined that the defendant (Najib) has no strong grounds for a stay of proceeding to be granted as the defendant had failed to discharge the burden of proving the existence of “special circumstances” to the satisfaction of this court.

“The purported 'special circumstances' argument advanced by the defendant failed to fulfil the nugatory test.

“This court is also of the considered opinion that the plaintiff (government) has the monetary ability to compensate the defendant should the defendant succeed in its appeal at the SCIT (Special Commissioner of Income Tax).

“There is no unquantifiable loss that could not be recovered from the plaintiff should the defendant succeed in this appeal. This reason merits consideration in favour of the plaintiff to not grant the stay.

“On the other hand, the defendant has not shown any cogent evidence to prove the plaintiff’s inability to compensate (Najib),” Ahmad said.

In regards to Najib’s defence team submission that the denial of the stay application could result in the defendant may suffer colossal financial damage if the tax suit is decided against him, Ahmad ruled that this does not constitute special circumstances.

“The inherent powers of the court as provided under Order 92, Rule 4 of the Rules of Court 2012 to grant stay should not be used to override the substantive law ie the Income Tax Act 1967,” Ahmad said.

The judge also noted that a stay could not be granted here as Najib was seeking a stay of the tax suit pending not only the disposal of his tax-reassessment appeal with SCIT but also pending completion of his various criminal trials that are ongoing and yet to be heard.

“If stay is to be granted, this would mean that the hearing of the present (tax) suit will be postponed indefinitely.

“This is against public interest whereby a case of this nature and magnitude involving public figures, like the defendant, to be heard and disposed off speedily,” Ahmad ruled.

The judge then informed parties that a case management date, for the government’s application for summary judgment in the tax suit against Najib, would be fixed later.

Lawyer Muhammad Farhan Muhammad Shafee acted for defendant Najib while the Inland Revenue Board’s senior counsel Norhisham Ahmad represented the plaintiff government.

Last month, after submissions by both parties, Ahmad set today to deliver his verdict on the stay application by Najib's legal team.

During submissions last month, Najib's lead counsel Muhammad Shafee Abdullah argued that the tax suit has the intent of ousting the former Umno president from the political arena following his immense contribution to the Opposition's victory in five by-elections.

Najib, who was also former finance minister, sought the stay pending his tax reassessment appeal with the Inland Revenue Board's (IRB) appeal board.

In last month's proceedings, DP Naban — a private lawyer appointed by IRB — countered that Najib’s stay application was premature and the defendant (Najib) still needed to pay the RM1.69 billion in total tax sought by the IRB while waiting for the outcome of the tax-reassessment appeal.

The IRB also has an application for summary judgement in the tax recovery suit against Najib, which may now proceed due to the court dismissing the bid to stay the main tax suit.

The government filed the suit against Najib on June 25, last year. 

It sought over RM1.69 billion from the former premier, with an annual five percent interest rate beginning from the date of judgment, as well as costs and other relief deemed fit by the court.

In its statement of claim, the government said Najib had failed to pay income tax from 2011 to 2017 within the stipulated 30-day period after assessment notices were issued.

As such, the amount owed each year increased by 10 percent.

It also said Najib was given 60 days to pay the taxes, together with the 10 percent increase, but he failed to do so.

Following this, Najib was slapped with another five percent increase in the 10 percent hike, bringing the total amount of income tax due to RM1,692,872,924.83.

The final amount owed each year is as follows:

2011: RM134,180,247.10

2012: RM370,674,071.81

2013: RM1,029,767,352.60

2014: RM137,612,077.11

2015: RM19,495,822.53

2016: RM743,179.21

2017: RM400,174.47

- Mkini