Najib and son’s tax appeal dismissed by appellate court

PUTRAJAYA : Former premier Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin have failed in their appeal against a court decision to allow a summary judgment against them over unpaid taxes of RM1.69 billion and RM37.64 million respectively.

“We find no merit in these two appeals and no error in the judgment of the two High Court judges which should be corrected by this court.

“Thus both appeals are dismissed with costs of RM10,000 each,” said Court of Appeal judge Datuk Abdul Karim Abdul Jalil in a unanimous decision.

The three-member bench — which included Justices Datuk Vazeer Alam Mydin Meera and Datuk Supang Lian — earlier heard submissions from the lawyer for Najib and his son, Tan Sri Muhammad Shafee Abdullah, and senior federal counsel Dr Hazlina Hussain for the Inland Revenue Board (IRB).

Shafee then asked the Court of Appeal for an interim stay of today’s (Sept 9) judgment pending further appeal at the Federal Court.

After brief deliberations, Justice Abdul Karim allowed the stay application on the condition that the notice of appeal is filed at the apex court latest by next week.

In his submission during a virtual hearing today, Shafee argued that Section 106(3) of the Income Tax Act 1967 infringed upon Najib and Nazifuddin’s constitutional rights as it allowed IRB’s imposition of a summary judgment without hearing their defence.  

He submitted that it violated his clients’ rights under Article 5 (touching on liberty of a person) and Article 8 (equal protection of the law) in relation to Article 121 (court’s power to hear an application) of the Federal Constitution.

Najib as seen at the Kuala Lumpur Court Complex on Sept 7. (Photo by Shahrill Basri/The Edge)
Najib as seen at the Kuala Lumpur Court Complex on Sept 7. (Photo by Shahrill Basri/The Edge)

Hazlina, however, argued that this is not the case, as the matter can be referred to the Special Commissioners of Income Tax, which the former premier and his son have already done.

Najib was watching the proceedings via Zoom. 

The summary judgment was entered on the former premier by Justice Ahmad Bache on July 22 last year, where he is required to pay RM1.69 billion in income tax arrears.

Justice Ahmad on June 14 this year also dismissed Najib’s application for a stay in paying the amount.

The government through the IRB also filed bankruptcy proceedings against Najib at the High Court in April.

Another High Court judge, Datuk Ahmad Zaidi Ibrahim, on July 6 last year entered summary judgment on Nazifuddin, ordering him to pay RM37.64 million in unpaid taxes to the IRB for the period between 2011 and 2017.

In May this year, the IRB instituted bankruptcy proceedings against Nazifuddin.

By : Timothy Achariam & Izzul Akram – THE EDGE MARKETS

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