Court Throws Out Najib’s Bid to Stay RM1.69B Tax Suit

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The High Court here today dismissed Datuk Seri Najib Razak’s application for a stay of proceedings of the Inland Revenue Board’s (IRB) suit seeking the former prime minister to pay RM1.69 billion in income tax, pending an appeal on the tax assessment to IRB.

Syazwan Kamal/Malaysiakini

Judge Datuk Ahmad Bache ruled that it was quite premature to stay proceedings at an early stage as there was no judgment (by the court).

“After hearing submissions from both parties, the court found the Pekan Member of Parliament had no strong grounds for a stay of proceedings to be granted.

“The defendant (Najib) has failed to discharge the burden of proving the existence of special circumstance to the satisfaction of this court,” he said.

In his ruling, the judge said the substantial amount of claim did not constitute a special circumstance.

“If the court grants a stay of proceedings, it would give a great impact to the tax recovery process. The stay would, if granted, defeat the whole substratum of the tax recovery legislation as manifested in Sections 103 106 of the Income Tax Act 1967.

“In fact, the tax could be paid in instalments. The tax must be paid first, any money can be refunded by the director-general of the IRB later. Therefore, Najib’s application for a stay of application is dismissed with costs at RM15,000,” he said.

The judge said the court opined that the defendant’s fear of losing was mere speculative and without lawful basis.

“With regard to the risk of losing qualification as a Member of Parliament due to potential bankruptcy proceedings, this court agrees with the IRB that such contention is nothing more than fear of losing,” he said.

The judge also said that the former prime minister had not shown any cogent evidence to prove the IRB’s inability to compensate.

Lawyer Muhammad Farhan Muhammad Shafee represented Najib, while senior revenue counsel Norhisham Ahmad appeared for the IRB.

On August 8, last year, Najib filed an application for a stay of proceedings of the IRB’s suit, seeking him to pay RM1.69 billion in income tax, pending an appeal on the tax assessment to IRB.

However, the IRB, in its supporting affidavit, said that Najib still had to pay the total amount of RM1.69 billion even if he had filed an appeal against the tax assessment.

IRB Monitoring Unit assistant director Hisyamuddin Mohd Hassan, in his supporting affidavit, said that according to Section 103 of the Income Tax Act 1967, all the assessed tax shall be due and payable on the day the notice of assessment is served, whether or not the person appeals against the assessment.

On June 25, last year, the government through the IRB filed the suit against Najib, seeking him to pay RM1.69 billion in unpaid tax with interest at five per cent a year from the date of judgment, as well as costs and other relief deemed fit by the court.