JUDGMENT

Chong Siew Fai J:

This is an application by the defendant to set aside the judgment in default of appearance obtained by the plaintiff on 17 March 1987.

The following facts are not disputed: The defendant was served with 6 notices of assessment or additional assessment relating to income or development taxes for years of assessment 1975, 1978 (additional), 1983 (2 notices), 1984 and 1985. The defendant failed to pay up, and the assessed taxes were increased by 10% and subsequently another 5% under subsections (4) and (5A) of s. 103 of the Income Tax Act 1967 respectively. As the amount was not paid, the plaintiff took out the writ herein culminating with entry of the default judgment. The defendant now seeks to set aside the default judgment.

The taxes assessed and the increased sums imposed were, if unpaid, recoverable as if they were taxes due and payable under the Act. (See s. 103(4) and (5A) of the Income Tax Act) .

It is not disputed that the judgment is a regular judgment.

In his affidavit made on 25 October 1988 the defendant explained why the default judgment was suffered to be entered. Briefly, it is that after receipt of the writ of summons, he had left the matter to his "adviser and accountant" who failed to take the necessary steps to defend the action. The explanation, of course, is a factor to which the Court will have regard, if and when considering whether discretion ought to be exercised to allow the application. Evans v. Bartlam [1937] 2 All ER 646.

For the defendant it was contended that the defendant had a good defence on merits on the grounds that:

(1) putting concisely, some of the taxes contained in some of the notices of assessment were incorrectly assessed, in that they were not gains or profits liable to tax under the Income Tax Act 1967.

(2) the plaintiff did not refer the matters to the Special Commissioners appointed under the said Act.

In normal case, where applications are made to set aside default but regular judgments, the rule, which has sometimes been described as "an almost inflexible rule", is that there ought to be affidavits stating facts showing a defence on the merits. Or, at any rate, where the application is not thus supported, it ought not be granted except for some very sufficient reason. Farden v. Richter [1889] 23 QBD 124. And, to show a defence on the merits, a defendant need only disclose an arguable or triable issue.

In our instant case, the crucial question, however is: Having regard to the relevant provisions in the Income Tax Act 1967 (to which provisions I shall refer) and in view of the nature of the claims in this action, does that normal rule of showing defence on the merits apply?

Section 103(1) of the Act makes the assessed tax due and payable at the place specified in the notice of assessment whether or not the person assessed appeals against the assessment.

Under s. 103(4) and (5A) of the Act, the assessed and increased taxes shall, upon the expiry of the period therein specified, be recoverable as if they were taxes due and payable under the Act.

Section 106(1) of the Act provides that tax due and payable may be recovered by the Government by civil proceedings as a debt due to the Government, and subsection (3) of s. 106 enacts, inter alia, that in any proceedings under the section the Court shall not entertain any plea that the amount of tax sought to be recovered is excessive or incorrectly assessed or increased under s. 103(4) or (5A).

In Government Of Malaysia V. Abdul Rahman the Court, in dismissing the appeal against the grant of leave to sign final judgment under O. 14, held that it could not entertain any plea that the tax or additional tax was incorrectly assessed. The dictum of the late Arulanandom J on that point was approved by the Supreme Court in the recent case of Chong Woo Yit V. Government Of Malaysia [1989] 1 CLJ 9 of which I am bound. I would reproduce here the relevant part of the judgment by Gunn Chit Tuan SCJ (at 13):

We would agree and approve the fo