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The Court of Appeal Has Affirmed Najib & Son Must Pay RM1.7bil In Outstanding Tax – Section 106 States That A Person Must Pay First & Talk Later

The Court of Appeal has affirmed two High Court decisions that Najib Razak and his son Mohd Nazifuddin must pay RM1.69 billion and RM37.6 million respectively in income tax arrears.

The High Courts had allowed the Inland Revenue Board (LHDN) to proceed with summary judgments as part of their civil recovery proceedings.

A three-member bench, chaired by Abdul Karim Abdul Jalil, today said there was no merit in the appeals.

“There is no appealable error by the High Courts for appellate intervention,” said Karim who sat with Vazeer Alam Mydin Meera and Supang Lian.

The bench ordered Najib and Nazifuddin to each pay RM10,000 in costs to LHDN.

Karim in the brief oral grounds said the Income Tax Act 1967 provided a scheme on how assessment and tax collection should be made.

In taxation law, he said outstanding tax must be paid after an assessment was made and notice sent to taxpayers within a specified time.

“Although a taxpayer makes an appeal to the Special Commissioner of Income Tax, the government through its director-general can continue to collect the outstanding tax under Section 106 of the Act,” he said.

He said the court’s limitation on this matter is settled law following a number of Federal Court rulings since 1967.

“In the circumstances, Section 106 does not violate Article 121 of the Federal Constitution on judicial power,” he said.

One of the issues before the bench was whether Section 106 of the Act was unconstitutional and if it usurped the power of judges.

That provision (Section 106) states that a person must ‘pay first and talk later’ and LHDN could obtain summary judgment.

Lawyer Muhammad Shafee Abdullah, at the last hearing, said LHDN was attempting to declare Najib a bankrupt by obtaining a summary judgment where the court decides on a particular case summarily, without calling witnesses to testify.

Last year, High Court judge Ahmad Bache ruled that Najib had to pay LHDN RM1.69 billion, inclusive of additional tax and penalties for the assessment years from 2011 to 2017 after allowing the agency’s application to enter a summary judgment against him.

Najib then filed an appeal against the decision in the Court of Appeal.

As for Nazifuddin, High Court judge Ahmad Zaidi Ibrahim ordered him to pay RM37.6 million in unpaid taxes between 2011 and 2017.

Muhammad Farhan Shafee and Wee Yong Kang appeared with Shafee while LHDN was represented by revenue solicitors Hazlina Hussain, Norhisham Ahmad and Al-Hummidallah Idrus.

1 Comment

1 Comment

  1. Alane Polera

    September 16, 2021 at 8:47 pm

    My Arizona Ash tree has three vertical splits in the bark which appear to be sapping it’s growth this year. Is there any treatment for this such as a salve to protect the exposed wood of the trunk?

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