MAN TRUCK & BUS (M) SDN BHD KETUA PENGARAH KASTAM,JABATAN KASTAM DIRAJA MALAYSIA.

DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA SEMAKAN KEHAKIMAN NO.: BA-25-9-01/2020, BA-25-29-04/2020, BA-25-43-05/2020 DAN BA-25-53-06/2020 ANTARA MAN TRUCK & BUS (M) SDN BHD ...PEMOHON DAN KETUA PENGARAH KASTAM, JABATAN KASTAM DIRAJA MALAYSIA ...RESPONDEN [1] The applicant is a company incorporated in Malaysia which assembles and distributes MAN trucks with its principal in Munich, Germany. The applicant imports driver's cabins and accessories in one complete set and assemble them in Malaysia as finished product to be sold locally. The respondent is the Director General of the Royal Malaysian Customs Department. [2] The four applications (“Applications”) for leave filed by the applicant were heard together. The respondent raised an objection to the Applications premised upon the ground that the applicant should exhaust the domestic appeal as provided in the relevant legislation instead of going for judicial review to challenge the decisions of the respondent. Having heard the arguments, | dismissed the Applications with costs. Background facts [3] The four Applications are: 3.1 S.2 3.9 3.4 25-9-01/2020 concerns with the decision to issue a (a) Bill of Demand (“BoD”) 1 dated 18.10.2019 under section 17(1) Customs Act 1967 (“CAct”) and (6) BoD 2 dated 29.10.2019 under section 46(1) Goods and Services Tax Act 2014 (“GSTA’). 25-29-04/2020 concerns with the decision to issue a (a) BoD 3 dated 17.1.20 under section17(1) CAct and (6) BoD 4 dated 30.1.20 under section 46(1) GSTA. 25-43-05/2020 (a) BoD 5 dated 11.3.20 under section 17(1) CAct, (6) BoD 6 dated 11.3.20 under section 43(5) GSTA and (c) BoD 7 dated 11.3.20 under section 38 Sales Tax Act 2018 (“STA’). 25-53-06/2020 (a) BoD 8 dated 29.5.20 under section 17(1) CAct and (6) BoD 9 dated 25.6.20 under section 38 STA. [4] The applicant has been importing prime mover including Cab in the form of CKD (completely knocked down) under tariff code 8701.20.100. The approval was obtained from the Ministry of International Trade and Industry (“MITI’). Thereafter in 2003 MITI approved the applicant’s application to import prime movers in the form of CKD together with fully assembled Cabs. Further approvals were given to the applicant in 2010 and 2016. [5] On 23.9.2019 the respondent’s officials namely Pasukan Audit Pasca Import came to the applicant's business premises to conduct inspection pursuant to sections 106A and 106B of the CAct. As a result nine BoD were issued in stages which are the subject matter of these Applications. Respondent’s objection [6] The learned Federal Counsel raised the objection to the Applications on the ground that the applicant should exhaust the domestic appeal which is provided for in section 143 of the CAct and section 96 of the STA respectively. It was submitted that the exceptions enunciated by the Supreme Court in Government of Malaysia v. Jagdis Singh [1987] 2 MLJ 185 do not apply to the facts and circumstances of these Applications. Further the applicant, she submitted, had failed to identify under which exception that the leave should be granted. [7] The learned counsel for the applicant in response submitted that at leave stage the Court should consider whether the application was frivolous and that the availability of domestic appeal should be considered during the hearing of the substantive application. He further referred to section 141N of the CAct which provides for an option to appeal to the Tribunal or High Court. Therefore, he submitted that the applicant was not prohibited by law to seek remedy by way of judicial review. [8] He further submitted that the decisions were ultra vires, legally wrong and/or in excess of jurisdiction in that the respondent failed to take into account the approvals by MITI, the respondent failed to give any reasons for raising the BoD and that the applicant was not heard before the decisions were made. It was further argued that the applicant has a legitimate expectation that the respondent would adhere to the exemption given by MITI for the applicant to import cabs under CKD tariff classification code. In addition the learned counsel pointed out since the BoD pertaining to goods and services tax were issued after GSTA was repealed, the applicant could no longer appear before the Goods and Services Tax Appeal Tribunal as it was no longer in existence therefore, there would be no legally constituted tribunal to hear his appeal. Decision Excess of jurisdiction [9] It cannot be disputed that the threshold at leave stage is extremely low and as long as the application is not frivolous leave ought to be given (QSR Brands Bhd v. Suruhanjaya Sekuriti_& Anor [2006] 3 MLJ 164). However when there is an internal or domestic remedy or appeal provided by the relevant statute to review the said decision then the approach is different. It is settled that the applicant must demonstrate that his application meets one of the exceptions pronounced in Government of Malaysia & Anor v. Jagdis Singh [1987] 2 MLJ 185 namely that there has been a clear lack of jurisdiction or a blatant failure to perform some statutory duty or in appropriate cases a serious breach of the principles of natural justice. Further to that if the merits of the application involve disputes of facts then it should go before the tribunal established under the relevant legislation in which the impugn decision was made (Ketua Pengarah Hasil Dalam Negeri v. Mudah.my Sdn Bhd [2017] 2 MLJ 197). [10] | could not agree with the learned counsel for the applicant’s argument that section 141N of the CAct gives the option to the applicant either to appeal to the Tribunal or go for judicial review simply because section 141N deals with the issues in dispute should not be heard at the same time by the Tribunal or the court. Further an appeal does not include judicial review. Similarly in section 143(1) of the CAct which provides that if an appeal has been lodged with the Tribunal or the High Court against the decision of the Director General, the applicant cannot apply to the Director General to review his decision. Again it talks about appeal and not judicial review. [11] A clear instance of a decision made in excess of jurisdiction or acted without jurisdiction is the case of Society of La Salle Brothers v. Ketua Pengarah Hasil Dalam Negeri [2018] 2 MLRA 71. There the appellant had obtained leave to seek an order of certiorari to quash the respondent's decision in issuing the notices of assessment. However, upon hearing the substantive application the High Court dismissed the same. The Court of Appeal in allowing the appeal held that the issuance of the notices of assessment was illegal and without jurisdiction because there was a letter confirming the tax exemption status issued on 26.1.1970 to the appellant and there was no express provision in the Income Tax Act 1967 revoking rights acquired under the Income Tax Ordinance 1947. Tengku Maimun Tuan Mat JCA (as she then was) at p.83 had this to say: “[48] Given that the respondent acted without jurisdiction, the third issue has to be resolved in favour of the appellant. Notwithstanding that it has failed to resort to the appeal procedure under s 99 of the ITA 1967, the appellant cannot be precluded from applying for judicial review. This principle was set out in Government of Malaysia & Anor v. Jagdis Singh ... .”. In these Applications the BoD were raised pursuant to the relevant provisions of the CAct referred to earlier. It was not disputed that the GSTA came to an end on 1.9.2018 and the STA came into force the same day and BoD 2, 4 and 6 were issued after the said date. Section 4 of the Goods and Services Tax (Repeal) Act 2018 (“GSTRA”) empowers the respondent to collect any goods and services tax due. Thus, there complaint about the respondent had acted without jurisdiction should fail. Appeal to which tribunal [12] As regards the appeal, section 5 of the GSTRA reads: (1) Any application for review under subsection 124(1) of the repealed Act pending before the Director General for his decision immediately before the appointed date shall, on or after the appointed date, be dealt with under the repealed Act as if the repealed Act had not been repealed. (2) Any decision made by the Director General under subsection 124(2) of the repealed Act before or after the appointed date, which is appealable to the Goods and Services Tax Appeal Tribunal, may be appealed by an aggrieved person to the Customs Appeal Tribunal provided that the appeal is made within thirty days from the date such decision was made known to the aggrieved person by the Director General. (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.”. It does not seem to cover the BoD 2, 4 and 6 as there was no application pending before the Director General and there was no appeal pending before the Goods and Services Tax Appeal Tribunal. [13] Section 141M of the CAct provides: “(1) The Tribunal shall have jurisdiction to determine any appeal made under section 143 of the Act, section 47 of the Excise Act 1976, subsection 96(5) of the Sales Tax Act 2018, section 81 of the Service Tax Act 2018, and section 126 of the repealed Goods and Services Tax Act 2014 as provided under section 5 of the Goods and Services Tax (Repeal) Act 2018 [Act 805]. (2) Without affecting subsection (1), the Minister may by order prescribe any additional matters to be within the jurisdiction of the Tribunal. (3) An appellant may lodge with the Tribunal an appeal in the prescribed form together with the prescribed fee.”. Subsection 141M(1) specifically refers to section 126 of the GSTA which deals with appeal to the Tribunal against the Director General’s decision which was none pending. However, | am of the view that the situation is salvaged by subsection 141M(2) which empowers the Minister to prescribe additional matters to be within the Customs Appeal Tribunal. | think this would sufficiently answer the anomaly posed by the learned counsel for the applicant. Other issues [14] The complaint by the applicant was that the respondent ignored the fact that the importation was approved by MITI. To my mind, the respondent did not question the approvals given by MITI. The issue raised by the respondent was whether the goods were CKD in nature or CBU (completely built up). The applicant had been importing prime mover including cab in the form of CKD under tariff code 8701.20.100. On 8.9.2003 the applicant obtained approval to import prime mover in the form of CKD together with fully assembled Cabs. The applicant vide a letter dated 13.7.2004 sought clarification with the respondent whether the importation of prime mover in the form of CKD with fully assembled Cabs would be under similar tariff code. It appears that there was a meeting between the applicant and the respondent which prompted the applicant to write to the MITI on 18.3.2010 and it was indicated in the said letter (enclosure 2 PR-4) that the description of the goods imported by the applicant did not meet the CKD definition. Additional approval was given by the MITI thereafter to import the same description of goods. And on 23.9.2019 the audit team visited the applicant’s business premises. This was followed by a round- table discussion where the respondent made it clear that it was of the view that the goods were not in the form of CKD and eventually the issuance of the BoD. [15] Now, the question is who to decide whether the goods imported by the applicant were in the form of CKD or CBU. | do not think this is purely a legal issue. The appellate courts in Ta Wu Realty Sdn Bhd v. Ketua_Pengarah Hasil Dalam Negeri & Anor [2009] 1 MLJ 555, Iskandar Coast Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2019] 6 MLRA 219, Ketua_Pengarah Hasil Dalam Negeri v. Mudah.my Sdn Bhd [2017] 2 MLJ 197 and Ketua Pengarah Hasil Dalam Negeri v. Alcatel-Lucent Malaysia Sdn Bhd & Anor [2017] 1 AMR 231 had respectively dealt with issues like whether the tax to be collected was income tax or real property gains tax, whether it was royalty payment or withholding tax, whether compensation from compulsory acquisition was taxable and all held that the domestic appeal would be the proper forum to deal with these issues. The description of the goods imported by the applicant shows ‘cab in the form of CKD’ and subsequently ‘fully assembled cabs’ which prima facie gives the impression that the latter was a CBU type. Hence, issues of facts are involved and the proper forum to resolve this is the Customs Appeal Tribunal. [16] | do not see any valid argument with respect to breach of natural justice as the applicant was accorded a round-table discussion. In Alcatel-Lucent (supra) at p.237 Suriyadi Halim Omar FCJ said: “[23] According to the appellant, the facts show that the appellant's conduct was in compliance with the principles of natural justice. By having several meetings between the representative of the first respondent, the respondent's tax agent, and the assessors involved in the audit, the respondents had been accorded their fundamental rights to be heard.”. [17] The Court of Appeal in Law Pang Ching & Ors v. Tawau Municipal Council [2010] 2 CLJ 821 at p.838 quoted a passage from Lord Diplock’s judgment in Council of Civil Service Unions v. Minister for Civil Service [1985] AC 374 at pp. 408-409 held that for a legitimate expectation to arise the decision must affect the other person: “by depriving him some benefit or advantage which either (i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision-maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.”. The respondent is the penultimate authority to decide whether the goods imported were CBU or CKD and whether import duty should be imposed or otherwise. In this Applications | found none. [18] Based on the reasons discussed | dismissed all four Applications with costs and disallowed any stay. \e (TUN ABD MAJID BIN DATO’ HJ. TUN HAMZAH) Hakim Mahkamah Tinggi Malaya, Shah Alam Tarikh: 15 Oktober 2020 Peguamcara-Peguamcara:- Peguamcara Pihak Perayu S Saravana Kumar TETUAN ROSLI DAHLAN SARAVANA PARTNERSHIP Advocates & Solicitors Level 16, Menara 1 Dutamas, Solaris Dutamas, No. 1, Jalan Dutamas 1, 50480 Kuala Lumpur Tel : 03—6209 5400 Fax : 03-6209 5498 Peguamcara Pihak Responden Krishna Priya JABATAN PEGUAM NEGARA, Bahagian Perbicaraan & Rayuan, Aras 5, No. 45, Lot 4G7, Presint 4, Persiaran Perdana, 62100 Putrajaya. Tel : 03-8872 2000 Fax : 03-8890 5673