Back
2022 MarsdenLR 2558
HIGH COURT MALAYA KUALA LUMPUR
SOONWEE TRADING SDN BHD – Appellant
Versus
KETUA PENGARAH KASTAM & ANOR – Respondent
[Originating Summons No: WA-24-42-08/2020]
Taxpayers may rely on representations from Customs authorities regarding GST invoicing practices; contradictory assessments and unfair penalties post-repeal of GST provisions are legally unsound.
Headnote:(A) Goods and Services Tax Act 2014 – Sections 30, 43, 124, and 126 – Appeal dismissed by Customs Appeal Tribunal regarding additional GST claims imposed just before the GST repeal – Customs raised additional tax, asserting incorrect invoice preparation, and sought a penalty post-repeal – Court found representation by Customs misled taxpayer into reliance on proper invoicing practices under GST which were not followed by the Customs, and assessed claims were inconsistent. The court emphasized taxpayers’ legitimate expectations based on previous representations (Paras 4.1, 43-80).
(B)
The tribunal must consider legitimate expectations created by authorities and prevent unfair assessments – Applied concepts of res judicata and which governs the right to appeal. Taxpayer entitled to appeal despite repealed provisions of the Act (Paras 31-41).
(C)
The imposition of penalties after the repeal of the GST Act was erroneous and constituted a wrongful exercise of power (Paras 72-76).
(D)
The court established that penalizing the taxpayer so close to the repeal of the GST Act without allowing avenues for appeal was unjust (Paras 73-80).
Result:
Appellant's appeal allowed with costs.
JUDGMENT
Introduction
[1] The Appellant is appealing against the decision of the Second Respondent (the Customs Appeal Tribunal) dated 21 July 2020 which dismissed the Appellant's tribunal appeal in respect of the additional Goods and Services Tax (GST) raised by the First Respondent.
[2] The Appellant filed an Originating Summons (OS) dated 13 August 2020 (encl 1) primarily seeking the following reliefs:
2.1 Satu Perintah bahawa keputusan Responden Kedua bertarikh 21 July 2020 yang menolak rayuan Perayu di bawah Rayuan MOF TRK 700-6/8/47 (2019) diketepikan;
2.2 Satu Perintah bahawa Responden Kedua telah terkhilaf dalam menolak rayuan Perayu di bawah Rayuan MOF TRK 700-6/8/47 (2019);
2.3 Satu Perintah bahawa tuntutan cukai yang dituntut oleh Responden Pertama terhadap Perayu di bawah Akta Cukai Barang dan Perkhidmatan 2014 melalui surat bertarikh 28 August 2018 (No Rujukan L1879808064) berjumlah RM504,644.90 dan surat bertarikh 7 August 2018 (No Rujukan L1747497024) berjumlah RM326,376.60 diketepikan;
2.4 Satu Perintah bahawa penalti berjumlah RM176,310.25 yang dicaj oleh Responden Pertama diketepikan;
2.5 Kos; dan
2.6 Lain-lain perintah atau relif selanjutnya yang Mahkamah yang Mulia ini anggap wajar dan berpatutan.
[3] After the hearing, I allowed the Appellant's OS (Enclosure 1). The grounds for my decision appear below.
Backgrounds Facts And Contention Of Parties
[4] The background facts in this appeal gathered from the cause papers, submitted by parties are as follows:
4.1 The Appellant (a registered person under the GST) is a gold and jewellery wholesaler where customers are also registered person under the GST regime.
4.2 The Appeal concerns the First Respondent's tax claim against the Appellant under the Goods and Service Tax Act 2014 (GST Act), whereby the First Respondent issued three Notices dated, 3 August 2018, 7 August 2018 and 28 August 2018 respectively, the last of which was dated 3 days before the repeal of the GST Act, to claim for additional GST of:
a) RM326,376.60 for the period of 1 April 2017 to 31 December 2017;
b) RM504, 644.90 for the period of 1 May 2015 to 31 January 2018;
[See TAB A1, Surat Jabatan Kastam bertarikh 3 August 2018, The Appellant's Core Bundle]
[See TAB B1, Surat bertarikh 7 August 2018 untuk Tuntutan Cukai di bawah Akta Cukai Barang dan Perkhidmatan 2014 ('GST'): Soonwee Trading Sdn Bhd no rujukan: L1747497024, The Appellant's Core Bundle]
[See TAB B1, Surat bertarikh 28 August 2018 untuk Tuntutan Cukai di bawah Akta Cukai Barang dan Perkhidmatan 2014 ('GST'): Soonwee Trading Sdn Bhd no rujukan: L1879808064, The Appellant's Core Bundle]
4.3 After the repeal of the GST Act on 31 August 2018, the First Respondent imposed a penalty of RM176,310.25 against the Appellant under the repealed Act by issuing a statement of account dated 9 October 2018 to the Appellant.
[See TAB D1, Surat Jabatan Kastam bertarikh 9 October 2018 The Appellant's Core Bundle]
4.4
a) The Additional GST was raised by the Custom, purportedly on the ground that the Appellant's manner of preparation of GST invoices, where GST was calculated only on the balance amount after set off being made for the value of the scrap gold returned by the Appellants' customers, was incorrect. An example of the GST invoice prepared by the Appellant:
[See TAB E1, Appellant's Core Bundle]
b) The Custom holds the view that the GST should be calculated on the amount of RM4217 [RM4127 + RM90], and not only on the amount of RM90.
[5] It is the Appellant's contention that the manner of preparation of invoices as above, was in reliance on the representation made by a custom officer that such set off is allowed, as it resulted in no loss of GST collection to the Custom.
[6] It is also the Appellant's contention that the First Respondent has acted capriciously, in raising additional GST against the Appellant, evident by the contradictory statements issued by the First Respondent where:
6.1 The Notice dated 3 August 2018 and 7 August 2018 purportedly
