The High Court has dismissed an appeal by Datuk Seri Najib Razak and his son, Datuk Mohd Nazifuddin Najib, to stay bankruptcy proceedings initiated by the Inland Revenue Board (LHDN).
The action arose after they failed to settle tax arrears of RM1.69 billion and RM37.6 million, respectively.
Judicial Commissioner Suhendran Sockanathan @ Saheran Abdullah ruled that there was no basis to grant a stay. “I don’t see any other damages that would warrant a stay,” he said on Monday (17 Nov).
He emphasised that the merits of a tax assessment fall under the jurisdiction of the Special Commissioners of Income Tax (SCIT), not the courts.
“The court’s role is only to facilitate the collection and recovery of tax. The formula of ‘pay now, dispute later’ is again, to facilitate the collection of tax,” he added.
The judge noted that an appeal to the SCIT does not suspend the collection process, as it remains within the framework of the Income Tax Act.
The court ordered Najib and Nazifuddin to pay RM7,000 each in costs.
In 2020, separate High Courts granted LHDN’s applications for summary judgment to recover the arrears from Najib and Nazifuddin for the years 2011 to 2017.
A summary judgment allows the court to decide a case based on written submissions without a full trial or witness testimony.
The government, through LHDN, filed bankruptcy notices against both men on 4 February 2021.
On 16 October 2023, the Federal Court upheld the High Court’s decision and dismissed their appeal, confirming that the arrears must be paid.