IRB: We’ll object to all judicial review bids

> Inland Revenue Board wants taxpayers disputing claims to pay first and then appeal against decision through the Special Commissioners of Income Tax

KUALA LUMPUR: The Inland Revenue Board of Malaysia (IRB) will object to all applications for judicial review in cases against taxpayers, said IRB director of legal department Abu Tariq Jamaluddin.

“IRB is aware that there are now a lot of cases where taxpayers choose not to go to SCIT (Special Commissioners of Income Tax) but instead file a judicial review application to the High Court and at the same time try to get a stay order for the payment of tax,” he said during a panel session at the Malaysian Tax Conference 2018 yesterday.

Abu Tariq said taxpayers need to get leave for judicial reviews so once the taxpayer files the leave application, IRB will work together with the AttorneyGeneral’s Chambers to object to the leave application.

“So all judicial review applications now will be objected to by IRB. Of course, the main reason for the objection is that the appropriate way would be to go to the SCIT. We know that if leave is granted, stay will be granted. To us, once a stay is granted, that defeats the purpose of Section 103 of the Income Tax Act that you have to pay first.

“If you want to dispute an assessment, you can appeal but you have to pay first. Once stay is granted, that will go against the spirit of Section 103. That’s the reason why we will make sure that all applications will go through the normal process of appeal which is at SCIT,” he added.

Abu Tariq said the option of a judicial review is still open to taxpayers but taxpayers will have to show illegality and irrationality on IRB’s part. For example, cases where IRB fails to follow a High Court decision or fails to follow its own public ruling would be appropriate cases for a judicial review.

MK Land Holdings, Tenaga Nasional and Magnum are among companies contesting huge additional tax and penalty decisions by IRB.

Shook Lin & Bok senior partner Sudharsanan R. Thillainathan said the judicial review option is more attractive for taxpayers as it allows them to bypass the SCIT, which takes a long time and also does not afford a stay of payment during the proceedings.

“The SCIT is bogged down with work. If you file an appeal today, first of all, the DG has up to 12 months to review and thereafter if the DG feels this is not a matter that can be settled or if parties are unable to settle the matter, then only the matter gets transmitted to the SCIT. And the SCIT’s workload is so heavy, they will give you a hearing date in two or three years’ time.

“Not that they are not trying to accommodate because I know in matters that I’ve handled, when I begged and pleaded they have tried to give very early dates. But the truth of the matter is, their diaries are packed and everyone needs a quick solution to a problem especially when the problem requires you to pay first, argue later,” he said.