Bid to stay RM9.41m tax suit against Shafee abuse of court process: IRB

Lawyer Muhammad Shafee Abdullah’s application to stay the RM9.41 million tax suit against him is an “abuse of court process”, claimed the Inland Revenue Board (IRB).

Shamsul Effendi Khamis, who is a principal assistant director in the Control Unit of IRB’s Kuala Lumpur Branch, made this assertion in an affidavit filed in the High Court in Kuala Lumpur two days ago (Jan 26).

The IRB was objecting to Shafee’s (above) earlier application to stay the tax suit against him, pending the outcome of tax-related appeals by Najib Abdul Razak and the former prime minister’s son, Mohd Nazifuddin. 

Before the Federal Court, Najib and Nazifuddin are appealing against the lower court ruling that granted summary judgment in IRB’s tax suits seeking RM1.69 billion and RM37.6 million from the father and son, respectively. 

In effect, the summary judgment allowed the High Court to award in favour of the IRB, while disregarding any defence that Najib and Nazifuddin may raise against the tax suits.

In seeking for the High Court to stay the tax proceedings against him, Shafee contended that the outcome of the apex court appeal involving Najib and Nazifuddin could affect the tax suit against him.

Shafee represented Najib in multiple court cases, such as the former prime minister’s ongoing tax-related civil appeal before the Federal Court.

In the present court filing sighted by Malaysiakini, Shamsul, on behalf of IRB, objected against Shafee’s bid to stay the tax suit against the lawyer, contending that “there are stark differences” between the tax claim against Shafee and the tax-related appeals of Najib and Nazifuddin.

The tax authority representative pointed out that IRB had already obtained summary judgment in the tax suits against Najib and Nazifuddin, while its summary judgment application in the suit against Shafee is still pending before the High Court. 

Multiple interlocutory applications

Shamsul highlighted that Najib and Nazifuddin had obtained a stay of execution order from the Court of Appeal over the summary judgment against them, while contending that Shafee was merely trying to get a stay order over the tax proceedings still pending before the High Court. 

Former prime minister Najib Abdul Razak

The IRB officer pointed out that the High Court has yet to hear multiple interlocutory applications still pending, such as the tax authorities’ application for summary judgment against Shafee and its bid to strike out the lawyer’s counterclaim against it, as well as Shafee’s application for leave to file his counterclaim (the three applications are collectively referred to as Enclosure 17, 22 and 26). 

“If the action of the defendant (Shafee) is closely observed, it is manifest that the defendant indeed intended to abuse the process of the court to delay this (tax) claim (against Shafee), and the case of Najib (the former prime minister’s tax-related appeal) is just merely a stepping stone for the defendant to stay this case, which supposedly has reached the stage of hearing of Enclosure 17, 22 and 26.

“This is because, after the defendant filed the application for leave to file a counterclaim, the defendant suddenly filed this application for stay of proceedings in which, if allowed, would suspend all interlocutory applications filed, including the defendant’s applications himself and this will surely waste this court’s time,” Shamsul argued.

The IRB officer pointed out that even though the Federal Court has fixed Feb 16 to hear Najib and Nazifuddin’s application for leave to appeal in their tax-related matter, it is possible that the apex bench may take months to deliver a verdict. 

“If this happens, the national interest will be prejudiced as the plaintiff (IRB), as the agent of the government, will be prevented from collecting revenue which is vital for the national development,” Shamsul contended.

Checks on the online cause list showed that the tax authority’s suit against Shafee was fixed for further case management on Feb 16. - Mkini