Seaport Worldwide Sdn Bhd (No. Pendaftaran Perniagaan: C1151286308) Ketua Pengarah Hasil Dalam Negeri

Seaport Worldwide Sdn Bhd (No. Pendaftaran Perniagaan: C1151286308) Ketua Pengarah Hasil Dalam Negeri

Because SWSB had invoked the statutory appeal route to the Special Commissioners of Income Tax and no exceptional circumstances (excess of jurisdiction, blatant statutory failure or serious breach of natural justice) were shown, judicial review was inappropriate; the prohibition order was wrongly granted because the Revenue acted within statutory powers in assessing tax and imposing penalty, the transaction was a lease not a sale so development expenses were not deductible under s33, and the imposition of penalty under s113(2) was lawful.

Citation
J-01(IM)-323-07/2020 & J-01(A)-352-08/2020 (Mahkamah Rayuan)
Parties
Appellant (j 01(im) 323 07/2020); Respondent (j 01(a) 352 08/2020): Seaport Worldwide Sdn Bhd; Respondent (j 01(im) 323 07/2020); Appellant (j 01(a) 352 08/2020): Ketua Pengarah Hasil Dalam Negeri
Court
IM
Jurisdiction
Malaysia
Judgment Date
27 January 2022
Case Number
J-01(IM)-323-07/2020 & J-01(A)-352-08/2020 (Mahkamah Rayuan)
Procedural Posture
Tax Judicial Review and Appeals / Court of Appeal Determination on Appeals From High Court Judicial Review (after Appeal to SCIT Initiated)
Outcome
Revenue appeal allowed; High Court Judicial Commissioner's prohibition order set aside; SWSB appeal against refusal of other reliefs dismissed.
Legal Topics
Tax Assessment and Appeal Exhaustion, Prohibition (prerogative Relief), Penalty Under S113 Income Tax Act 1967, Deductibility of Development Expenses (s33), Characterisation of Lease Vs Sale
Source Language
Malay/English
Tax Law Administrative Law Judicial Review Property/land Law Procedural Law Tax Assessment and Appeal Exhaustion Prohibition (prerogative Relief) Penalty Under S113 Income Tax Act 1967 +2 more

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Parties

Seaport Worldwide Sdn Bhd

Appellant (j 01(im) 323 07/2020); Respondent (j 01(a) 352 08/2020)

Ketua Pengarah Hasil Dalam Negeri

Respondent (j 01(im) 323 07/2020); Appellant (j 01(a) 352 08/2020)

Procedural Posture

Tax Judicial Review and Appeals / Court of Appeal Determination on Appeals From High Court Judicial Review (after Appeal to SCIT Initiated)

Legal Issues

  1. 1 Whether judicial review was permissible before exhaustion of statutory appeal under s99 ITA
  2. 2 Whether prohibition order was correctly granted prohibiting Revenue enforcement action
  3. 3 Whether the lease agreement amounted to sale/disposal of leasehold interest or a mere lease

Ratio Decidendi

Because SWSB had invoked the statutory appeal route to the Special Commissioners of Income Tax and no exceptional circumstances (excess of jurisdiction, blatant statutory failure or serious breach of natural justice) were shown, judicial review was inappropriate; the prohibition order was wrongly granted because the Revenue acted within statutory powers in assessing tax and imposing penalty, the transaction was a lease not a sale so development expenses were not deductible under s33, and the imposition of penalty under s113(2) was lawful.

Court Disposition

Revenue appeal allowed; High Court Judicial Commissioner's prohibition order set aside; SWSB appeal against refusal of other reliefs dismissed.

Orders

  • Revenue appeal allowed and Judicial Commissioner's prohibition order set aside; costs RM10,000 payable (subject to allocator fee).
  • SWSB appeal dismissed; costs RM15,000 payable (subject to allocator fee).