Petronas application for judicial review of State Sales Tax dismissed
KUCHING: The High Court here yesterday dismissed an application by Petroliam Nasional Bhd (Petronas) for a judicial review to declare the State Sales Tax imposed by the Sarawak government as null and void.
In making the ruling, High Court judge Azhahari Kamal Ramli also awarded costs of RM50,000 to the respondents, namely the Sarawak Comptroller of State Sales Tax and the Sarawak government.
He said there were no grounds for the court to grant the declaration as Article 95B(3) of the Federal Constitution, which provides that the Legislature of Sabah and Sarawak may also make laws for the imposing of sales tax, and any sales tax imposed in the two states shall be deemed to be among the matters enumerated in the State List and not in the Federal List.
Azhahari said since Article 95B(3) of the Constitution stated that any sales tax imposed by state law was deemed to be among the matters enumerated in the State List, the State Sales Tax Ordinance and any subsidiary legislation made thereunder was constitutional and valid.
“Based on the above reasons, there is no merit in the application for the declaratory relief,” he added.
The High Court heard the submissions from the parties involved on Jan 3 and 4, where Petronas as the applicant was represented by counsels Datuk Malik Imtiaz Sarwar and Alvin Chong, while the respondents were represented by the state legal counsel Datuk Seri J.C. Fong and state Attorney-General Datuk Talat Mahmood Abdul Rashid.
The application, among others, was to seek a declaration from the court that the State Sales Tax (Taxable Goods and Rate of Tax) (Amendment) (No 2) Order 2018, Section 2, 7, 8, 11(1), 12(1), 12(6), 12(7) and 15(d) of the Sarawak Sales Tax Ordinance 1998 and Regulation 19 C, Sarawak State Sales Tax Regulations 1998 were ultra vires the Federal Constitution and thus null and void.
Speaking to reporters outside the court later, Malik said he would wait for further instructions from his clients whether to proceed to appeal against the decision or otherwise.
“We will study the grounds of the dismissal before discussing further (on the next course of action) with our client (Petronas) on the matter,” he said.
Fong hoped that the court’s decision would be accepted by Petronas and it would not proceed to appeal against the judgment.
“And (I hope) Petronas, Petros (state-owned oil and gas company) and the state government will work together to help the oil and gas industry, which is currently coming under a challenging period because of low oil prices and low global demand,” he added.