Tax arrears: Court strikes out Shafee's appeal to file counterclaim

The Court of Appeal today struck out Muhammad Shafee Abdullah’s appeal over the payment of income tax arrears amounting to RM9.41 million.

A three-member bench led by judge Hanipah Farikullah held that the appeal was incompetent as the subject matter was not appealable under Section 3 of the Courts of Judicature Act.

Hanipah, who sat with judges Azimah Omar and Wong Kian Kheong, also ordered the veteran lawyer to pay costs of RM10,000.

Shafee (above) had appealed against the High Court’s decision to disallow him from filing a counterclaim over the Inland Revenue Board’s (IRB) demand that he pay the tax arrears.

He was represented by Rajan Navaratnam, Muhammad Farhan Muhammad Shafee, and Wee Yeong Kang while IRB senior lawyers Norhisham Ahmad, Al-Hummidallah Idrus, Norzilah N Hamod @ Abdul Hamid, and Muhammad Faqrol Syazreen Mohd Ghause acted for the board.

Meanwhile, Rajan told reporters that his client is at liberty to file a fresh suit.

On April 13, last year, the High Court dismissed Shafee’s application to obtain leave to file a counterclaim after finding that the counterclaim does not arise from the recovery of taxes but from mala fide acts by the MACC and Attorney-General’s Chambers (AGC), which does not fall within the scope of the rule prohibiting counterclaims.

On Dec 21, last year, Shafee was ordered by the High Court in Putrajaya today to pay over RM5.5 million in income tax arrears to the IRB after allowing the board’s application for a summary judgment against the lawyer.

IRB, which filed the suit on May 6, 2021, claimed the lawyer failed to pay the entire income tax arrears and the tax increase imposed on him amounting to RM9,414,708.32 for the assessment years of 2011, 2012, 2013, 2014, and 2016.

- Bernama