MOHD NAJIB HJ ABD RAZAK v. GOVERNMENT OF MALAYSIA & ANOTHER APPEAL

Federal Court, Putrajaya
Abang Iskandar Abang Hashim PCA, Mohamad Zabidin Mohd Diah CJM, Nallini Pathmanathan, Mary Lim Thiam Suan, Abu Bakar Jais FCJJ
[Civil Appeal Nos: 01(i)-18-05-2022(W) & 01(i)-17-05-2022(W)]
Abang Iskandar Abang Hashim PCA, Mohamad Zabidin Mohd Diah CJM, Nallini Pathmanathan, Mary Lim Thiam Suan, Abu Bakar Jais FCJJ

JUDGMENT

Nallini Pathmanathan FCJ:

Introduction

[1] The primary issue that falls for adjudication and decision in these two appeals brought by the Appellants, Mohd Najib Abd Razak ('Najib Razak') and Mohd Nazifuddin Mohd Najib ('Nazifuddin'), is the constitutionality of s 106(3) of the Income Tax Act 1967 ('ITA'). The primary ground put forward by the Appellants is that s 106(3) usurps judicial power in art 121 of the Federal Constitution ('FC'). It is also contended that the impugned section contravenes art 5(1) FC in that it does not accord the Appellants a fair trial and impedes their right of access to justice.

[2] It is submitted that this contravention arises because s 106(3) expressly limits the defences available to a taxpayer seeking to challenge a summary claim brought by the Respondent, the Government of Malaysia, represented by the Inland Revenue Board ('Inland Revenue') as a debt due, based on monies assessed to be due from the taxpayer. The statutory provision in issue, namely s 106(3) ITA, stipulates that "the Court shall not entertain" any plea that the tax claimed is 'excessive, incorrectly assessed, under appeal or incorrectly increased...'. This limitation on defences that may be considered by the Court, it is maintained, amounts to a usurpation of judicial power as stated above, and therefore warrants being struck down under art 4(1) FC.

[3] In further support of this primary assertion, it is contended that s 106(3) thereby precludes the right to a fair trial by the taxpayer, flouting art 5(1) FC which recognizes this right as part of the right to life. Additionally, the Appellants argue that art 8(1) FC is also contravened in that the Inland Revenue is accorded unlimited powers, creating a disparity between the rights of the Inland Revenue and the taxpayer. This, it is argued, amounts to a contravention of art 8 of the FC. The amicus curiae concurs with the Appellants in that it is submitted that there is a contravention of art 8 FC as s 106(3) ITA ousts judicial power and has no rational nexus with the objective of the ITA.