Najib, son fail to get Federal Court to hear constitutional issues linked to tax appeals

 

The Court of Appeal has set Sept 9 to hear appeals by former prime minister Najib Abdul Razak and his son Mohd Nazifuddin Najib in relation to taxation.

This followed on the heels of the three-person bench today denying an application by the duo’s lawyer Muhammad Shafee Abdullah to refer the appeals’ constitutional issues to the Federal Court.

Today, the Court of Appeal was initially set to hear appeals by Najib and Nazifuddin to quash a lower court’s ruling allowing summary judgment in the Inland Revenue Board’s (IRB) tax suits against the duo.

Through the IRB, the government seeks to recover alleged unpaid taxes and penalties of RM1.69 billion and RM37.6 million from Najib and Nazifuddin respectively.

Under civil law, a court may allow summary judgment, which entails deciding on a legal matter whereby there are no triable issues that need to be ventilated via a full trial.

During today’s proceedings before the Court of Appeal bench chaired by judge Abdul Karim Abdul Jalil, Shafee had argued that the matter should be referred to the Federal Court in order to put a final determination to the constitutional issue in the tax appeals.

The constitutional issue here is whether Section 106 (3) of the Income Tax Act 1967 contravenes Article 121 of the Federal Constitution.

Section 106 (3) states that in any civil action by the government to recover tax that is due, 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”.

Article 121 deals with the judicial power of the Federation of Malaysia.

However, during online Zoom proceedings before the Court of Appeal today, senior revenue counsel Hazlina Hussain countered that the Federal Court had already decided that Section 106 is valid through a different appeal case.

The legal representative for the IRB contended that the Court of Appeal is well within its power to hear the appeals by Najib and Nazifuddin, as the apex court previously had ruled that Section 106 is valid as it was properly enacted by Parliament.

Towards the end of online proceedings today, Karim ruled that the Court of Appeal could not agree with Shafee’s submissions on having the Federal Court hear the constitutional issues linked to the appeals by Najib and Nazifuddin.

“We would prefer to proceed with the appeal proper, which would cover this issue (validity of Section 106) and other issues (related to the appeals) as well,” Karim ruled in the unanimous ruling.

The other two members of the Court of Appeal bench today were judges Vazeer Alam Mydin Meera and Supang Lian.

However, the panel today adjourned the hearing of the appeals proper to Sept 9, in order to allow the legal team acting for Najib and Nazifuddin to develop further their submissions over the validity of Section 106. - Mkini