DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
DALAM WILAYAH PERSEKUTUAN, MALAYSIA
PERMOHONAN BAGI SEMAKAN KEHAKIMAN NO: WA-25-380-12/2018
Dalam perkara Bil-B il Tuntutan Cukai
di bawah Akta Cukai Barang dan
Perkhidmatan 2014 bertarikh
24.9.2018 yang dikeluarkan oleh
Responden ke atas Pemohon bagi
Tahun-Tahun 2015 dan 2016 dan Bil
Tuntutan Cukai di bawah Akta Cukai
Barang dan Perkhidmatan 2014
bertarikh 9.10.2018 yang dikeluarkan
oleh Responden ke atas Pemohon
bagi Tahun 2017;
Dan
Dalam perkara Akta Cukai Barang dan
Perkhidmatan 2014, khususnya
Seksyen-Seksyen 4 dan 9;
Dan
Dalam perkara Akta Komunikasi dan
Multimedia 1998, khususnya Seksyen-
Seksyen 202, 203 dan 204 dan
Peraturan-Peraturan Komunikasi dan
Multimedia (Pemberian Perkhidmatan
Sejagat) 2002;
Dan
Dalam perkara Aturan 53 Kaedah-
Kaedah Mahkamah, 2012 dan
Perenggan 1 Jadual kepada Akta
Mahkamah Kehakiman 1964.
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ANTARA
ASIASPACE SDN BHD …PEMOHON
DAN
KETUA PENGARAH KASTAM DAN EKSAIS …RESPONDEN
JUDGMENT
Introduction
[1] This is the applicant’s application for leave to commence judicial
review pursuant to Order 53, Rules of Court 2012, seeking among
others for the following reliefs :
(i) an order of certiorari to quash the respondent’s Notices issued
to the applicant dated 24.9.2018 for Years of Assessment 2015
and 2016 and Notice dated 9.10.2018 for Year of Assessment
2017 (‘the Disputed Bill of Demands’);
(ii) a declaration that the Disputed Bill of Demands are invalid in
law or in the alternative to the above reliefs;
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(iii) a order of certiorari to quash the respondent’s decision as
contained in the respondent’s Statement of Account dated
9.11.2018 (‘the Disputed Statement of Account’) purporting to
charge the penalties against the applicant;
(iv) a declaration that, should this court find that the applicant is
liable to pay the goods and services tax under the Disputed Bill
of Demands, the applicant is not liable to pay penalties under
the Disputed Statement of Account, or in the alternative;
(v) a declaration that the goods and services taxes and penalties
imposed by the respondent upon the applicant under the
Disputed Bill of Demands and the Disputed Statement of
Account are excessive and erroneous and should be reduced in
a manner that this Court deems fit;
(vi) an order to compel the respondent to discharge, revise, revoke
or amend as he case may be, the Disputed Bill of Demands
and the Disputed Statement of Account.
The Brief Facts
[2] The salient facts in this application can be summarized as follows :
(i) the applicant is a company which provides telecommunication
towers to facilitate network facilities for telecommunication
companies.
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(ii) the applicant was awarded 2 projects by the Malaysian
Communication and Multimedia Commission (MCMC) which
are the following :
(a) to build or construct 17 telecommunication towers in the
rural areas of Terengganu (Phase 1 Project) subject to a
maximum value of RM12,352,376.51 under the
notification of approval dated 9.12.2014;
(b) to build or construct 20 telecommunication towers in the
rural area of Terengganu (Phase 2 project) subject to a
maximum value of RM15,524,442.20 under notification
approval dated 30.12.2015.
(iii) In relation to the Phase 1 project, the applicant had engaged
Asiaspace Engineering Sdn Bhd (AESB) as its contractor and
for the Phase 2 Project, the applicant had engaged AESB and
Felda Prodata System Sdn Bhd as its contractor.
(iv) Further, the applicant is a registered person under the Goods
and Services Tax Act 2014 (‘GST Act 2014’) since 1.4.2015
with the goods and service tax registration number
001644281856.
(v) Next, the respondent, by letter dated 23.2.2018 to the applicant
informing the applicant that an audit was to be conducted on
the applicant for the year 2015, 2016 and 2017 and required
the applicant to provide the necessary documents.
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(vi) Thereafter, based on the audit conducted on the applicant, it
was found that there were undeclared Goods and Services Tax
(GST) payable under the projects awarded by MCMC and
further under-declared GST under the GST Act 2014.
(vii) In the circumstances, the respondent issued the following Bill of
Demands to the applicant :
(a) Bill of Demand dated 24.9.2018 for Year Assessment
2015 from the period of 1.4.2015 to 31.12.2015 in the
amount of RM339,066.10.
(b) Bill of Demand dated 24.9.2018 for Year Assessment
2016 from the period of 1.1.2016 to 31.12.2016 in the
amount of RM667,555.98.
(c) Bill of Demand dated 9.10.2018 from the period of
1.1.2017 to 31.1.2018 in the amount of RM1,258,439.93.
(viii) Dissatisfied with the Disputed Bill of Demands, the applicant
filed this judicial review application.
Preliminary Objection For Leave Application
[3] At the outset, the Federal Counsel representing the respondent in this
case has raised a preliminary objection that the applicant’s
application for leave is frivolous and vexatious as the applicant has
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not exhausted the statutory appeal procedure under the GST Act
2014 before filing this judicial review application.
The Findings of the Court
[4] It is settled law that the court may grant leave to commence judicial
review if the application is not frivolous or vexatious and the applicant
has prima facie arguable case.
[5] The Federal Court in WRP Asia Pacific Sdn Bhd v Tenaga
Nasional Bhd [2012] 4 MLJ 296, [2012] 4 CLJ 478 explained the
test for leave to commence a judicial review in the following words :
“Leave may be granted if the leave application is not thought of as
frivolous, and if leave is granted, an arguable case of granting the reliefs
sought at the substantive hearing may be the resultant outcome. A rider
must be attached to the application though, i.e., unless the matter for
judicial review is amenable to judicial review no success may be
envisaged.”
[6] This test was followed by the Court of Appeal in Peguam Negara
Malaysia v Nurul Izzah bt Anwar [2017] 5 CLJ 595, where it states :
“[23] The law in the subject is well-settled and the authority on which the
appellant principally relies in considering the test for granting leave is the
pronouncement of the Federal Court in the case of WRP Asia Pacific
Sdn Bhd v. Tenaga Nasional Berhad [2012] 4 CLJ 478 in which the
applicable test was stated in para 12 at p.488 in the following terms :
‘...At the leave stage, on a quick perusal of the material available, if the court
thinks that subsequently at the substantive hearing stage an arguable case may
be disclosed, and the relief sought may be granted, leave should be
granted...Without the need to go into depth of the abundant authorities, suffice if
we state that leave may be granted if the leave applicantion is not thought of a
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frivolous, and if leave is granted, an arguable case in favour of granting the relif
sought at the substantive hearing may be the resultant outcome...’
We would also refer to the case of Tuan Hj Sarip Hamid & Anor v Patco
Malaysia Bhd [1995] 3 CLJ 627 [TAB 4] His Lordship Edgar Joseph Jr.
FCJ wherein in Supreme Court approved the following guidelines stated in
R. V Secretary of State for the Home Department, ex parte Rukshanda
begum [1990] Crown Office Digest 109, Dip, the Court of Appeal in
England correctly laid down guidelines to be followed by the Court when
considering an application for leave, in the following terms :
(i) The Judge should grant leave if it is clear that is a point for further
investigation on a full inter partes basis with all such evidence as is
necessary on the facts and all such argument as is necessary on
the law.
(ii) If the Judge is satisfied that there is no arguable case be should
dismiss the application for leave to move for judicial review.
(iii) If on considering the papers, the Judge comes to the conclusion
that he really does not know whether there is or is not an arguable
case, the right course is for the Judge to invite the putative
respondent to attend and make representations as to whether or
not leave should be granted. That inter partes leave hearing should
not be anywhere near so extentive as a full substantive judicial
review hearing. The test to be applied by the Judge at that inter
partes leave hearing should be analogous to the approach adopted
in deciding whether to grant leave to appeal against an arbitrator’s
award.....namely; if, taking account of a brief for further
consideration, then he should grant leave.”
[7] Reverting to the present application, the applicant’s main challenged
is the issuance of the Disputed Bill of Demands by the respondent
dated 24.9.2018 and 9.10.2018 with the total amount of
RM2,265,062.01.
[8] The issuance of this Bill of Demands is pursuant to the power
conferred under subsection 43(8) of GST Act 2014 which states :
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“Power to assess
(8) Where an amount has been assessed and notified to any
person under subsection (1), 92), (5) or (7), it shall be deemed to
be an amount of tax due and payable from him and may be
recovered accordingly and the amount of tax and penalty, if any,
shall be paid by the person, whether or not that person
appeals against the assessment, to the Director General
unless or except to the extent that the assessment has been
withdrawn or reduced.”
[9] Although the GST Act 2014 has been repealed, section 4 of the
Goods and Services Tax (Repeal) Act 2018 provides inter-alia where
there involves any under paid services tax, it can be collected under
the repeal act.
Section 4 states as follows :
“4. (1) Notwithstanding the repeal of the Goods and Services Act 2014 –
(a) any liability incurred may be enforced; or
(b) any goods and services tax due, overpaid or erroneously
paid may be collected refunded or remitted, under the
repealed Act as if the repealed Act had not been repealed.
(2) Notwithstanding the repeal of the Goods and Services Act 2014,
section 178, 181 and 191 of the repealed Act continue to remain in
operation after the appointed date.”
[10] The words ‘as if the repeal Act had not been replaced’ in subsection
4(1)(b) would includes the right to appeal to the Director General
under sections 126 and 127 of GST Act 2014.
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[11] For ease of reference, sections 126 and 127 states :
(i) Section 126
“Right of appeal
126. (1) Subject to section 127, any person aggrieved by the decision of
the Director General may appeal against the decision.
(2) The appeal shall be made to the Tribunal within thirty days from
the date the disputed decision was made known to the aggrieved person
or within any such extension of time that may be granted by the Tribunal in
the prescribed manner together with the prescribed fee. ”
(ii) Section 127
“Jurisdiction of Tribunal
127. (1) The Tribunal shall have jurisdiction to determine appeals relating
to goods and services tax except on matters specified in the Fourth
Schedule.”
[12] The present application does not falls under any matters specified in
the Fourth Schedule and as such it is within the jurisdiction of the
Tribunal to hear and determine the appeal in regard to the applicant’s
case.
[13] Further, the Customs (Amendment) Act 2018 provides as follows :
“Amendment to section 141M
10. Subsection 141M(1) of the principal Act is amended by substituting
for the words ‘subsection 68(2) of the Sales Tax Act 1972’ and ‘subsection
50(2) of the Service Tax Act 1975’ the words ‘subsection 96(5) of the
Sales Tax Act 2018, section 81 of the Service Tax Act 2018, and section
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216 of the repealed Goods and Services Tax 2014 as provided under
section 5 of the Goods and Services Tax (Repeal) Act 2018 [Act 805]’.”
[14] Subsection 5(3) of the Goods and Services Tax (Repeal) Act 2018
then states the following :
“Pending application for review and pending appeal
5. (3) Any appeal before the Goods and Services Tax Appeal Tribunal
which is pending immediately before the appointed date shall, on or after
the appointed date, continue to be heard and decided by the Customs
Appeal Tribunal.”
[15] Reading the provision of subsection 5(3) above and the amendment
to section 141M of Custom Act 1967, the conclusion is that any
appeal before the Goods and Service Tax Appeal Tribunal is to be
heard before the Custom Appeal Tribunal.
[16] Hence, in this present case, the applicant which dissatisfied by the
Director General’s decision in issuing the Bill of Demands, has the
remedy to appeal to the Custom Appeal Tribunal but has failed to do
so.
[17] In this regard it is in instructive to refer to the case of Robin Tan
Peng Heng @ Muhamad Rizal bin Abdullah (suing as public
officer at Penang Turf Club) v Ketua Pengarah Kesatuan Keserja
Malaysia & Anor [2011] 2 MLJ 457, where it states :
“[16] The second question could better be described as a consequence
of the first question. Section 71A has provided a remedial mechanism
within the framework of the trade union legislation, that is a specific
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procedure whereby an appeal lies to the Minister. The second
question relates to another matter, that is since s. 71A(1) is applicable
to an employer does it still permit the employer to have an option not to
appeal, and additionally, instead have recourse to a court of law in order
to challenge the registration. The declaratory orders sought by the
appellant would have the effect of negating the decision of the first
respondent. By praying for the declaratory orders the appellant is in
effect appealing against the decision of the first respondent while a
specific procedure has been lain down in the Act 262. By statue a
second tier has been established whereby an appeal lies to the
Minister. The word used in s.71A(1)(b) is ‘may’. In construing the word
‘may’ generally, it could be contended that the word is permissive in
relation to the person who is given the right to appeal in the sense that is
gives the person a choice to prefer an appeal against the decision of the
registrar or not to. But in relation to the person who is to be affected by
the appeal we do not see this as directory. The declaratory orders
sought seen to reverse the decision of the registrar. Hence is that
sense if an employer wishes to refute recognition then it is the
mandatory procedure that is laid down that has to be resorted to for
the legislation has identified the specific procedure whereby any
person who is dissatisfied is to seek further recourse with the
Minister if that person wishes to negate the decision of the registrar.
[17] In our opinion the legislation by stipulating that the decision of
the Minister is to be final is itself indicative that when there is
alreadystipulated a second tier identified in the legislation, courts are
not authorised to interfere for the statutory right that has accured is
not purely formal but mandatory. In other words the statutory right
has to be exhausted.”
[18] In another decision by the Federal Court in Ketua Pengarah Hasil
Dalam Negeri v Alcatel-Lucent Malaysia Sdn Bhd & Anor [2017] 1
MLJ 563, the same issue was explained in the following words :
“[58] To dispel any fear of a taxpayer, merely because he has to face
such an awesome body in the form of the government, Gill FJ in Sun Man
Tobacco Co. v Government of Malaysia [1973] 2 MLJ 163 had occasion to
state :
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The doors of justice are not shut do him merely because its claiman is the
Government, but he has to enter the doors of the Special Commissioners
first to raise the plea of non-observance of the principle of natural justice
or toestablish that the Director-General acted arbitrarily and in a non-
judicial maner. It is only after he has availed himself of that remedy as
laid down by the law that he has a right to come to the courts.
(Emphasis added.)
[59] The respondents when asked about the failure, replied that the
issue of withholding tax is not an assessment, hence the irrelevancy of s.
99 in this appeal.”
[19] Apart from the abovementioned cases, the Court of Appeal in
Pengarah Kastam Negeri Johor v Kedai Makan Kebun Teh
(Sutera Utama) Sdn Bhd & Ors and another appeal [2014] 3 CLJ
733 had this to say on this issue :
“[18] Having perused that provision, we would agree with learned SFC
that such recourse could only be had after therespondent taxpayer had
exhausted the available remedy as provided for by Parliament within the
four corners of the Sales Tax Act 1972. That would necessarily mean
that the respondent taxpayer must have exhausted its appeal remedy
with the Director-General of Customs in respect of the impugned notice as
envisaged under s. 68 of the Sales Tax Act 1972 (supra). While s. 141N
seems to suggest that the aggrieved party go to the High Court, it
does not expressly say that the aggrieved taxpayer may do so
without first exhausting its remedy by appealing to the Director-
General.”
[20] In any event, as judicial review is the discretion of the court, the
application for leave to commence judicial review may be allowed in
an exceptional circumstances as explained by the Supreme Court in
Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ
185, which held :
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“Held, allowing the appeal: (1) the discretion is still with the courts
to act by way of judicial review but where there is an appeal provision
avilabe to the applicant, certiorari should not normally issue unless there
is shown a clear lack of jurisdiction or a blantant failure to perform
some statutory duty or in appropriate cases a serious breach of the
principles of natural justice;”
[21] In the present application, the issuance of the Bill of Demands by the
respondent was made pursuant to subsection 43(8) of the GST Act
2014 and there is nothing before this court to show failure by the
respondent to perform any statutory duty nor any serious breach of
principles of natural justice. As such, there is no exceptional or
special circumstances for this court to exercise its discretion to allow
the applicant’s leave application as the applicant has not exhausted
the remedy under the section 126 of GST Act 2014 to appeal to
Custom Appeal Tribunal.
Conclusion
[22] Based on the abovementioned reasons, I find, the applicant’s
application for leave to commence judicial review is frivolous and
vexatious and as such is dismissed with costs of RM1,000.00.
DATED THIS 28TH JANUARY 2019
signed
[ NORDIN BIN HASSAN ]
JUDGE
HIGH COURT SPECIAL AND APPELLATE POWERS
KUALA LUMPUR HIGH COURT.
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Parties :
[1] Nad Segaram & Soo Siew Mei
Messrs Shearn Delamore & Co
Advocates & Solicitors …for the
Tingkat 7, Wisma Hamzah-Kwong Hing Applicant
No. 1, Leboh Ampang
50100 Kuala Lumpur
[2] Puan Krishna Priya a/p Venugopal
Federal Counsel
Jabatan Peguam Negara …for the
Bahagian Guaman Respondent
No. 45, Persiaran Perdana
Presint 4
Putrajaya.
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