WONG YUNG CHUN Ketua Pengarah Hasil Dalam Negeri

KA-14-1-03/2024 Kand. 30 20/11/2025 23:52:44 IN THE HIGH COURT OF MALAYA IN ALOR SETAR IN THE STATE OF KEDAH DARUL AMAN, MALAYSIA CIVIL APPEAL NO.: KA-14-1-03/2024 BETWEEN WONG YUNG CHUN (Hong Kong Passport: K01090757) --- APPELLANT AND DIRECTOR GENERAL OF INLAND REVENUE --- RESPONDENT (In the Matter of the Special Commissioner of Income Tax in Putrajaya APPEAL NO. MOF.PKCP.700-7/1/1071) BETWEEN WONG YUNG CHUN (Hong Kong Passport: K01090757) --- APPELLANT AND 1 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal DIRECTOR GENERAL OF INLAND REVENUE --- RESPONDENT GROUNDS OF JUDGMENT Introduction: 1. This Civil Appeal arises from the decision of the Special Commissioners of Income Tax (“SCIT”) dated 20 February 2024, which dismissed the appeal filed by the Appellant, Wong Yung Chun, and upheld the assessment issued by the Respondent, the Director General of Inland Revenue. 2. The Appellant is the beneficiary owner of 1/10 share of a property held under GM 7101, Lot 5204, Bandar Alor Setar, Daerah Kota Setar, Negeri Kedah (“the said Land”) and intended to sell the said Land to Imperio Venture Sdn. Bhd. (“Imperio Venture”) via a Sale and Purchase Agreement (“SPA”) dated 9 May 2017. 3. The Appellant was granted Grant of Probate by the Hong Kong High Court on 12 February 2016 and obtained the resealed Grant of Probate by the Alor Setar High Court on 30 May 2018 for the said Land. 2 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 4. On 12 March 2019, the Appellant, a Hong Kong citizen, received the consent under Section 433B of the National Land Code (Act 828) (“NLC”) from the Kedah State Government for the transmission and transfer of the said Land. 5. The transmission and Memorandum of Transfer (“MOT”) were subsequently registered at the Kedah Land Office on 26 March 2019. 6. On 23 February 2020, the Appellant received the real property gains tax notice dated 19 February 2020 (“RPGT Notice 19.02.2020”), which stated the acquisition date as 31 May 2018 with an acquisition value of RM512,600.00 (RM190.00 per sqm) and the disposal date of 31 May 2018 with a disposal value of RM885,718.00 (RM328.00 per sqm, being the SPA price). 7. Dissatisfied with the acquisition date and the market value stated in RPGT Notice 19.02.2020, the Appellant appealed to the SCIT arguing that the acquisition date should be 26 March 2019 the date the said Land was registered onto the Appellant’s name after obtaining the consent pursuant to S.433B NLC on 12 March 2019. 3 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 8. The SCIT on 20 February 2024 dismissed the Appellant’s appeal and upheld the information stated in RGPT Notice 19.02.2020. The Appellant then filed this appeal (“this Appeal”) before this Court. 9. The issues to be determined by this Court are: (i) “Whether the acquisition date of the 1/10 share of the property held under GM7101, 5204, Tempat Tanjong Bendahara, Bandar Alor Setar, Daerah Kota Setar, Negeri Kedah is 31 May 2018; and (ii) Whether the Real Property Gains Tax Assessment Notice for the assessment year 2018 dated 19 February 2020 issued against the appellant according to the acquisition date by the Jabatan Penilaian dan Perkhidmatan Harta (“JPPH”) Kedah valued at RM512,600.00 is proper. Submission by the Parties 10. The Appellant submits that the acquisition date by a non-citizen is after obtaining the consent pursuant to S.433B under the National Land Code, namely, on 26 March 2019. Only after obtaining the consent, the Appellant could acquire the said Land and has the capacity and ownership to transfer the said Land to Imperio Venture. 4 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 11. In support of his submission, the appellant refers to the Federal Court case of Chor Phaik Har v Farlim Properties Sdn Bhd [1997] 3 MLJ 188, where Mohamed Dzaiddin FCJ (as he then was) held at p.197G: “…it follows that until his estate has been fully been administered by the administrators and distribution made according to law, the beneficiaries have no interest or property in the Estate of Chor Bah Say so as to give them any title to the said lands. Here, we agree with counsel for the appellant that the beneficiaries of his estate, being vendors of the said lands under the sale agreement could not have covenated to convey any title to the respondents.”. [Emphasis added] 12. The Appellant also avers that the Respondent had admitted and agreed with this contention during oral submission before the SCIT. NP: p 89-90 Hakim So sekarang ni, Puan Nurul Nasyrah, tadi 26/03/2019 boleh diterima lah sebagai Tarikh acquisition dalam kes ini? LHDN terima? Pn Nurul Kami boleh terima, Yang Arif. Pn Nurul Yang Arif, pihak kami telah pun…kalau kita lihat kepada Ikatan Dokumen Responden Tambahan, 5 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal Ikatan Dokumen Tambahan Responden E1, Yang Arif. Ada 2 laporan nilaian yang telah diekshibitkan iaitu laporan nilaian bagi Tarikh pemerolehan pelupusan 30 Mei 2018 dan juga yang kedua laporan nilaia bagi tarikh pemerolehan ataupun pelupusan 30 Mei 2018 dan 26 Mac 2019. Memandangkan telah diputuskan bawah tarikh pemerolehan Adalah pada 26 Mac 2019, jani nilai harta tanah akan dinilai berdasarkan tarikh nilaian pada 26 Mac 2019 Yang Arif. En Cho Iaitu pada kadar RM674,500 lah berdasarkan Laporan Jurunilai JPPH. Pn Nurul Betul. Ya [Emphasis added] 13. With this admission by the Respondent, the Appellant argues that the RPGT Notice 19.02.2020 is void because the acquisition and valuation date of 31 May 2018 within that notice has been admitted as being wrong. 14. The Respondent in its submissions agrees with the findings that the acquisition date of the 1/10 share of the said Land by the Appellant is 26 March 2019 according to the transmission register date of the said Land. 6 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 15. Regarding the second issue, the appellant submits that the SCIT had in law and in fact wrongly decided to uphold and retain the valuation in RPGT Notice 19.02.2020 valued at RM512,600.00. 16. The Appellant avers that the Respondent had admitted that the acquisition date in RPGT Notice 19.02.2020 is wrong, hence accordingly the valuation date of the RPGT Notice 19.02.2020 is wrong and therefrom, the valuation of RM512,600.00 in that notice is wrong and not proper. 17. The Appellant also argues that the Respondent’s witness SR-2, Puan Aimi Amira binti Zainal Abidin, an Officer from JPPH Alor Setar branch admitted that the JPPH valuation report 1 at 31/05/2018 @ RM512,600.00 is void and the JPPH valuation report 2 at 31/05/2018 and at 26/03/2019 @ RM674,500.00 is right even though there was a 10-month gap between the two. 18. Furthermore, the Appellant submits that the SCIT had erred in her decision to uphold the RPGT Notice 19.02.2020 even though the findings of her decision had agreed with the Respondent’s admission that the assessment conducted for RPGT Notice 19.02.2020 was done according to the wrong acquisition date of 31 May 2018. 7 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 19. The Appellant argues that the Respondent had misconstrued and misled the SCIT towards the meaning of “market value” under the Real Property Gains Tax Act 1976 (“RPGT Act 1976”) and Stamp Act 1949. It has referred to different value and assessment which resulted in different market value on a same valuation date. 20. In opposing this, the Respondent claims that the RPGT Notice 19.02.2020 was done pursuant to Para 19(1) Second Schedule of RPGT Act 1976. 21. The Appellant also avers that the definition of “market value” is guided by the Malaysian Valuation Standards (“MVS”) in accordance with the International Valuation Standard (IVS) thus, if the assessment date is the same, the valuation result must be the same even for different Act of Parliament. Findings and Decision of the Court 22. After a full deliberation and appraised the facts adduced by both parties through their submissions by the learned counsels for the Appellant and the Respondent, on the balance of probabilities, this Court agrees with the Appellant and allows this appeal. This decision is based on the following reasons. 8 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal Jurisdiction of the High Court 23. This Court begins by reaffirming the limited scope of the High Court’s jurisdiction in hearing appeals from the SCIT, restricting it to a question of law. 24. The two leading authorities on this scope of question of law are the House of Lords case of Edwards (Inspector of Taxes) V Bairstow & Harrison 15 TC 207 and the Privy Council case of Chua Lip Kong v Director General of Inland Revenue [1982] 1 MLJ 235 whereby the findings of primary facts by the SCIT are unassailable. 25. Judicial intervention is however mandated where the SCIT had either: (a) misdirects itself on the law; (b) draws an inference or conclusion that is inconsistent with the primary facts found by them; or (c) bases its conclusion on evidence lacking probative value. 26. This principle of judicial intervention is encapsulated by Lord Viscount Simonds in Edwards V Bairstow (supra) where it was held at p.29 (2nd paragraph): “For it is universally conceded that, though it is a pure finding of fact, it may be set aside on grounds which have been stated in 9 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal various ways but are, I think, fairly summarised by saying that the court should take that course if it appears that the commissioners have acted without any evidence, or on a view of the facts which could not be reasonably entertained.” 27. Furthermore, this principle was followed by our Supreme Court case of Lower Perak Co-Operative Housing Society Bhd v Ketua Pengarah Hasil Dalam Negeri [1994] 2 MLJ 713 whereby Edgar Joseph Jr SCJ in delivering the judgment held (at p.732D): “THE DUTY OF THE COURT WHEN HEARING APPEALS FROM THE SPECIAL COMMISSIONERS First of all, it would be pertinent to say that in considering this appeal we have kept in the forefront of our minds the much- quoted principles enunciated by Lord Radcliffe in Edwards v Bairstow and Harrison, regarding the duty of the court when hearing appeals from commissioners in tax cases. It will be recalled in that case what Lord Radcliffe said (at pp 35-36) was this: ….. When the case comes before the court it is its duty to examine the determination having regard to its law knowledge of the relevant law. If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of 10 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination… [Emphasis added] 28. It is the Court’s finding that the present case falls under the second category when the SCIT had erred in accepting the information stated in RPGT Notice 19.02.2018. The Law Governing Non-Citizen Acquisition of Land 29. As a matter of clarification, the Federal Court in the case of Chor Phaik Har v Farlim Properties (supra) stressed (at p.195D) that: “… a beneficiary under an intestacy has no interest or property in the personal estate of a deceased person until the administration of the latter’s estate is complete and distribution made according to the law of distribution of the intestate estate.” [Emphasis added] 30. For a Malaysian citizen, the interest or acquisition of a land as a beneficiary starts when the transfer of the property to the 11 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal beneficiary has been completed. However, for non-citizen, any acquisition of land is subject to Section 433B of the NLC which states: “Non citizen and foreign companies may acquire, etc., land only with approval of State Authority. (1) Notwithstanding anything contained in this Act or in any other written law— (a) a non-citizen or a foreign company may acquire land by way of a disposal under Division II; (b) a dealing under Division IV with respect to alienated land or an interest in alienated land may be effected in favour of a non-citizen or a foreign company; (c) alienated land, or any share or interest in such land, may be transferred or transmitted to, or vested in, or created in favour of any person or body as "trustee", or of two or more persons or bodies as "trustees", where the trustee or one of the trustees, or where the beneficiary or one of the beneficiaries, is a non-citizen or a foreign company; (d) the Registrar may in respect of any land register any person or body as "representative" or make a memorial in favour of any person or body as "representative" if such person or body is a non-citizen or a foreign company; (e) the Registrar may endorse any memorial of transmission on the register document of title to any land in favour of a non-citizen or foreign company, 12 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal but only after the prior approval of the State Authority has been obtained upon an application in writing to the State Authority by such non-citizen or foreign company:” [Emphasis added] 31. Hence, for real property gains tax assessment purposes, while a Malaysian citizen acquisition date is on the death of the deceased, non-citizen and/or foreign companies only acquire their interest and rights of the land after the approval of the State Authority pursuant to S.433B NLC. 32. Therefore, in the instant case, the Appellant only acquired his 1/10 share of the said Land after receiving the approval of the State Authority on 12 Mac 2019 and subsequently register the transmission of property on 26 March 2019. 33. Thus, the acquisition date for the computation of the real property gains tax for the Appellant’s 1/10 share of the said Land is 26 March 2019 and not 31 May 2018. It cannot be 31 May 2018. 34. After the acquisition date was resolved by the parties, the learned Senior Revenue Counsel representing the Respondent 13 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal admitted during the SCIT hearing, and reiterated in submissions before this Court, that the correct acquisition date is 26 March 2019 which corresponds to the registration of the transfer, following the satisfaction of all precedent conditions of the SPA. 35. Subsequently, this consensus establishes that the RPGT Notice 19.02.2020 was founded upon an erroneous primary fact which is the acquisition date. A fortiori, the valuation price corresponding to that date the market value of RM512,600.00 (“MV1”) was rendered null and void. 36. Despite the Respondent’s explicit admission that the acquisition date was 26 March 2019 which renders the corresponding MV1 void, the SCIT proceeded to dismiss the Appellant’s appeal before her and upheld the RPGT Notice 19.02.2020. The Respondent had subsequently sought to mitigate this error by submitting a revised valuation (MV2 of RM674,500.00) based on the newly agreed acquisition date. 37. Hence, the SCIT had committed a fundamental error of law in her determination to uphold an assessment that was acknowledged by the Respondent itself to be predicated upon a wrong acquisition date and a voided valuation. This insistence on upholding a legally and factually compromised instrument, even when superseded by the Respondent’s own admission and revised determination is indeed an error of law. 14 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 38. Here, a conclusion is vitiated if it is inconsistent with primary facts, particularly when those facts are admitted by the opposing party. This Court is guided by the Privy Council case of Lim Foo Yong Sdn Bhd v Comptroller General of Inland Revenue [1986] 2 MLJ 161 at p.169B (right) that: “Their Lordships have felt unable to agree with this, having regard to the reasoning upon which the decision of the Special Commissioners was based and to the inconsistencies of their findings. There was, in their Lordships’ view, no evidence of probative value upon which the Commissioners could legitimately conclude that the transactions giving rise to the additional assessments were other than the realisation of capital assets. The conclusion reached was based upon fallacious reasoning and was, in any event, inconsistent with their own findings as to the purpose of the disposition… The Special Commissioners are, of course, as the Federal Court rightly observed, the judges of fact, but in finding the facts and drawing inferences of secondary fact from them, they must not misdirect themselves and they must draw conclusions from facts having probative value. In their Lordships’ judgment, the Special Commissioners in this case both misdirected themselves by reaching conclusions inconsistent with primary facts found by them and drew inferences from matters which were of no probative value in supporting their conclusions.”. 15 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal [Emphasis added] 39. On the second issue, whether the RPGT Notice 19.02.2020 issued against the Appellant according to the acquisition date by the JPPH Kedah valued at RM512,600.00 is proper, this Court must first determine the assessment calculation of the market value. Acquisition price is defined in Para 4 Second Schedule of RPGT Act 1976: Paragraph 4: Acquisition Price (1) Subject to subparagraphs (2), (3) and (4) and the other provisions of this Schedule, the acquisition price of an asset is the amount or value of the consideration in money or money's worth given by or on behalf of the owner wholly and exclusively for the acquisition of the asset (together with the incidental costs to him of the acquisition) less- (a) any sum received by him by way of compensation for any kind of damage or injury to the asset or for the destruction or dissipation of the asset or for any depreciation or risk of depreciation of the asset; (b) any sum received by him under a policy of insurance for any kind of damage or injury to or the loss, destruction or depreciation of the asset; and (c) any sum forfeited to him as a deposit made in connection with an intended transfer of the asset. [Emphasis added] 40. “Market value” is defined in Para 11 Second Schedule of the RPGT Act 1976 as: 16 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal Paragraph 11: Definition of Market Value (1) Subject to this paragraph, the market value of an asset, which is acquired or disposed of is the price which it would fetch if it were sold in a transaction between independent persons dealing at arm's length at the time of the acquisition or disposal. (2) If- (a) the parties to the disposal of an asset are unable to agree on its market value; or (b) there is only one party to the disposal of an asset; or (c) the Director General is of the opinion that the market value of an asset as agreed on by the parties to its disposal is incorrect, the market value in question shall be determined by the Director General. [Emphasis added] 41. For the purpose of this Appeal, the onus of proving that the assessment is excessive or erroneous lies with the Appellant pursuant to Para 13 Fifth Schedule of RPGT Act 1967. Paragraph 13: Onus of Proof 13. The onus of proving that an assessment against which an appeal is made is excessive or erroneous shall be on the appellant. 17 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 42. This was made clear by Edgar Joseph Jr in the Supreme Court case of Lower Perak Co-Operative Housing Bhd. (supra) whereby it was held at p 733H: “THE ONUS ON THE TAXPAYER We recognize that in an appeal by a taxpayer to the special commissioners against an assessment made under the Act, the assessment stands unless the taxpayer is able to satisfy the special commissioners that the assessment is overcharged. It follows, that in such an appeal the onus is on the taxpayer to demonstrate that the assessment should not have been made (see Norman v Golder, 5 per Macnaghten J at p 295) and so, the assessment stands unless and until the taxpayer satisfies the commissioners that it is wrong (per Lord Greene at p 295). The taxpayer, therefore, undertakes the same onus when he brings a further appeal to the High Court and yet another appeal to this court.”. [Emphasis added] 43. The critical question in our present case is about the quantum of the acquisition price namely the market value (“MV”) to be applied for the purpose of computing the chargeable gains under RPGT Act 1976. The Appellant urges this Court to disregard the Respondent’s revised MV, namely MV2 (RM674,500.00) in favour of the higher value of RM885,719.00. 18 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 44. It is submitted by the Appellant in the appeal to the SCIT, that the stamp duty assessment notices of Memorandum of Transfer (MOT) for the said Land adopting the valuation dates of the SPAs 23/01/2017 and 09/05/2017 had stated the same valuation of RM 885,719.00 for 1/10 share of the said Land being RM328 sqm2. This valuation was done by the same JPPH Alor Setar which the Respondent relies on in this instant case. 45. The inconsistency by JPPH a government department which citizens expect to be professional and reliable, is, to say the least, glaringly obvious. 46. The Respondent correctly asserts that the imposition of stamp duty is governed by the Stamp Act 1949, and for conveyances on sale, the duty is assessed on the consideration or the market value, whichever is the greater pursuant to Paragraph 32 First Schedule of Stamp Act 1949. 47. The real property gains tax chargeable gain, conversely, is calculated based on the difference between the disposal price and the acquisition price, the latter being the market value at the time of acquisition when no consideration price is provided pursuant to Section 7 of RPGT Act 1976. 19 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 48. However, the Appellant’s objection is anchored not merely on the transactional value used for stamp duty, but on the Respondent’s inconsistency in declaring the MV of the subject property (namely the said Land). The Appellant had presented evidence of a ‘Notice of Assessment for Stamp Duty’, issued by the Respondent, in which the figure of RM885,719.00 was entered in both the “Consideration” column and the “Market Value” column. 49. It is unfathomable that a market value on SPAs dated 23/01/2017 and 09/05/2017 can be assessed to a higher value but subsequent valuations based on the revised MV for real property gains tax, set at RM674,500.00 for the proper acquisition date of 26/03/2019 represents a substantial decrease in the per square meter value compared to the earlier stamp duty valuation. 50. The Respondent cites adherence to Malaysian Valuation Standards (MVS) and International Valuation Standards (IVS) yet simultaneously admits that the comparable transactions provided by the Appellant’s private valuer were rejected partially because they relied on old data of year 2014/2015. The Respondent fails to provide a convincing explanation supported by transparent, probative evidence as to how the MV determined by the same JPPH could drop so dramatically during this period. 20 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal Contradictory Valuation in Stamp Duty Assessment 51. The Court notes the compelling submissions of the Appellant concerning the manifest inconsistency arising from the Respondent’s own records regarding the valuation of the said Land for stamp duty purposes versus real property gains tax purposes. 52. The Appellant forcefully argued that the Market Value of the said Land should be determined to be RM885,718.64 (or rounded to RM885,719.00) for the 1/10 portion, aligning with the assessment for stamp duty (Duti Ad Valorem). This figure corresponds to RM328.00 per square meter. 53. The Appellant referred to the ‘Notice of Assessment for Stamp Duty’ related to the transfer of a portion of the said Land, specifically citing the document where the figure RM885,718.64 was entered in both the “Consideration” (Bahagian A(a)) column and the “Market Value” (Bahagian A(b)) column. This fact was confirmed during the examination of the Appellant’s witness, Lee Woei Nen (SP-1). 54. The Appellant highlighted that the specific ‘Notis Taksiran Pindah Milik Harta Tanah (Duti Ad Valorem)’ for the transaction related to Ooi Mei Ching’s portion (5/50) showed an internal comment in the log system (PDS 15/eStamps) by a JPPH officer stating "telah dinilai - RM885,718.64 utk 5/50bhgn”. This log entry is found in the record (see pages 92 to 98 of Ikatan 21 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal Dokumen Perayu “D” and cross-referenced with page 90 of the same bundle). 55. The Appellant further contended that these notices were issued based on the ‘Sale and Purchase Agreement (PJB 1)’ dated 23/01/2017, aligning with Section 12A(b) of the Stamp Act 1949. 56. The core of the Appellant's contention is the contradiction that arises when the Respondent uses one, higher market value (RM885,718.64) for charging stamp duty (where the higher value between consideration and market value is taken) but insists on a significantly lower market value (RM674,500.00) in calculating real property gains tax liability. 57. As evidence of the consistent nature of this stamp duty valuation across all co-owners of Lot 5204 who disposed of their shares to the same acquirer, the Appellant referenced multiple notices of assessment for stamp duty, all showing the market value corresponding to the consideration for their respective portions. 58. The list of notices of assessment for stamp duty (‘Notis Taksiran Pindah Milik Harta Tanah (Duti Ad Valorem)’) referred to by the Appellant for co-owners' transfers included the following (all pertaining to portions of the Subject Property transferred to Imperio Venture Sdn Bhd): 22 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal No Vendor Portion of Relevant Notices (in Subject Property Bundle of Appellant Document) 1 Ooi Mei 5/50 Pages 591–602 Ching 2 Ng Hean 1/50 Pages 603–614 Teck 3 Ng Seng Aik 5/50 Pages 615–628 4 Ng Siew Hoi 5/50 Pages 629–642 5 Ng Siew 5/50 Pages 643–654 Hwa 6 Ng Hean 1/50 Pages 655–666 Cheow 7 Ng Siu Eong 5/50 Pages 667–678 8 Ng Lai Hock 1/50 Pages 679–692 9 Ng Sok 1/50 Pages 693–702 Hoon 10 Ng Goay 1/50 Pages 703–714 Kee 23 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 Huang 5/50 Pages 715–726 Xiuchuan 12 Huang 5/50 Pages 727–738 Xiujiang (Note: Pages 591–738 refer to documents within Bundle of Appellant Document filed in the course of the appeal before the SCIT. (See “Rekod Rayuan Jilid 3B Bahagian C”/ Enclosure 9)) 59. The Respondent's witness (SR-2, Aimi Amira) acknowledged that, according to the log/system used (PDS 15/eStamps), the value of RM885,718.64 was recorded as the Consideration (Balasan) for the transfer of 5/50 portion. While SR-2 stated she was not the stamp duty officer and should not comment on stamp duty matters, she confirmed that the system operates by taxing based on "whichever is higher" between consideration and market value. The Appellant countered that since the terms for "Market Value" in both the Stamp Act and RPGT Act 1976 are similar, the Respondent should grant the benefit of the higher valuation to the taxpayer, a position supported by principles of tax statute interpretation. 60. This documented, consistent valuation of RM885,718.64 for stamp duty provides a strong factual basis, drawn from the Respondent's own internal administrative actions and JPPH assessments related to the same property and time period, supporting the Appellant's proposed market value. The 24 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal contradictory valuations further confirm this Court’s decision to order for the MV to be reassessed. Strict Interpretation Rule in Tax Statutes 61. It is an established canon of interpretation that in tax statutes, the imposition of a charge must be clear and unambiguous. If the words of a taxing statute or the facts leading to its application are indefinite, uncertain and capable of being interpreted in two ways, the rule is that the construction more favourable to the taxpayer must be adopted. 62. This principle was applied in the case of Perak Construction Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2001] 8 CLJ 498 where the court held that ambiguous inferences regarding development expenditures should not have been drawn against the taxpayer. Similarly, in this instant case, the Respondent’s own documentary evidence (the stamp duty notice) creates a palpable ambiguity, rendering the MV of RM674,500.00 highly suspicious. 63. The Court finds that the MV of RM674,500.00 is fundamentally compromised by the Respondent’s prior formal declaration of a higher MV (RM885,719.00) for an earlier, related transaction involving the same subject property. This inconsistency, coupled with the lack of transparent, probative evidence 25 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal justifying the subsequent depreciation in value, compels this Court to apply the rule favourable to the taxpayer, the Appellant. JUDICIAL INTERVENTION AND CONFLICTING VALUATIONS 64. In resisting the substitution of the market value, the Respondent vehemently contended that the appeal lies strictly on a question of law, and that the factual findings of the SCIT regarding the valuation—specifically the market value of RM674,500.00— were binding and unassailable by this Court. The Respondent submitted that the Court lacked the jurisdiction to interfere with the methodology of valuation used by the Respondent’s expert, as this constitutes a finding of fact. Furthermore, the Respondent argued that the Appellant's reliance on the Stamp Duty Notice valuation of RM885,719.00 constituted a "misconception of law" (salah faham undang-undang). The rationale offered was that Stamp Duty is levied on the instrument based on the higher of consideration or market value, whereas RPGT is calculated based on the acquisition price minus the disposal price, making the Stamp Duty assessment irrelevant for RPGT valuation purposes. 65. This Court acknowledges the long-established principle, derived from Lord Radcliffe’s judgment in Edwards v Bairstow (supra), that judicial intervention in tax appeals is only permissible where the SCIT commits an error of law, or where the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to 26 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal the determination reached. In this present appeal, this Court finds that such an error of law arose not from the determination of a technical fact, but from the SCIT's failure to address the manifest legal absurdity caused by the Respondent’s own contradictory administrative actions. 66. The Respondent cannot, through its various agencies (LHDN, JPPH), rely on two conflicting market valuations— RM885,719.00 for stamp duty (where the higher value favors the government) and RM674,500.00 for RPGT (where the lower value favors the government)—for the same asset during the same relevant period. This inconsistent administrative position creates an ambiguity which, under the established rule of construction for taxing statutes, must be resolved strictly against the taxing authority and in favor of the taxpayer. 67. When there is ambiguity regarding the application of a tax liability, or where the enforcement of two differing valuations is sought by the same revenue body and made by the same government valuation agency, the Court is compelled to adopt the interpretation or value that benefits the Appellant. Accordingly, the Court finds that the adoption of the Market Value of RM885,719.00, as repeatedly declared or used in the notices of assessment for stamp duty, is legally mandated to correct the error of law arising from the inconsistent and ambiguous application of factual data by the Respondent. This specific intervention, which fixes the necessary parameters, is 27 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal within the Court’s jurisdiction to amend the assessment and remit the matter under binding terms. Conclusion 68. The SCIT committed a fundamental error of law by upholding the RPGT Notice 19.02.2020 despite knowing that it was based on an incorrect acquisition date (31 May 2018) and a voided market valuation (RM512,600.00). Furthermore, the subsequent determination of a revised market valuation (RM674,500.00) was fatally tainted by the unexplained, glaring inconsistency with the MV previously declared by the same JPPH for stamp duty purposes on the same asset (RM885,719.00). 69. The Appellant successfully discharged the onus of proving that the assessment upheld by the SCIT was erroneous and excessive. Accordingly, this Court finds that the SCIT's determination was inconsistent with the primary facts found and admitted by the Respondent, thereby necessitating judicial intervention under the principles set out in Edwards v Bairstow. For the reasons detailed above, this Court hereby allows the Appeal, sets aside the decision of the SCIT dated 20 February 2024, and substitutes the following final orders to govern the reassessment: (a) The appeal is allowed with no order as to costs. 28 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) The deciding order of the SCIT dated 20 February 2024 is hereby set aside. (c) The RPGT Notice 19.02.2020 for the Year of Assessment 2018 is hereby set aside. (d) The matter is remitted to the Respondent to reassess the chargeable gains for the disposal of the 1/10 share of the said Land, based on the agreed acquisition date of 26 March 2019 and the acquisition price/ market value of RM885,719.00 for the said 1/10 share. Dated: 20th November, 2025 -------------------------------------------------- DR. HJ JOHN LEE KIEN HOW @ MOHD JOHAN LEE JUDGE HIGH COURT OF MALAYA ALOR SETAR Solicitor For : Cheng Ming Fui & Cho Boon Cheong The Appellant Messrs. Cheng Ming Fui & Co Advocates And Solicitors 29 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal Solicitor For : Azrul Safinas binti Rosli & The Respondent Norhamizah binti Ab Han LHDN, Cyberjaya Authorities Cases Chor Phaik Har v Farlim Properties Sdn Bhd [1997] 3 MLJ 188 Chua Lip Kong v Director General of Inland Revenue [1982] 1 MLJ 235 Edwards (Inspector of Taxes) V Bairstow & Harrison 15 TC 207 Lim Foo Yong Sdn Bhd v Comptroller General of Inland Revenue [1986] 2 MLJ 161 Lower Perak Co-Operative Housing Society Bhd v Ketua Pengarah Hasil Dalam Negeri [1994] 2 MLJ 713 Perak Construction Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2001] 8 CLJ 498 Statutes Stamp Act 1949 Real Property Gains Tax Act 1976 National Land Code 30 S/N drAbVXIso021Sk725tI4A **Note : Serial number will be used to verify the originality of this document via eFILING portal