Tax liability disputes must follow statutory appeal processes to be triable; failure to do so precludes contesting assessments.

[1] This appeal came up for disposal on 20 July 2017. The leave questions before us are as follows:

(i) Whether in hearing and deciding the application for summary judgment in a civil action for the recovery of tax due and payable by the taxpayer under s 23(1) of the Real Property Gains Tax Act 1976 , the court can entertain the issue of whether there has been a chargeable gain accruing and/or disposal of assets between the buyer and the seller prior to the assessment raised against the taxpayer.

(ii) Whether in deciding the applicant's civil claim under s 23(1) of the Property Gains Tax 1976, the issue as to a chargeable gain had accrued and/or disposal of assets raised a triable issue.

(iii) Which is the right forum to hear and decide regarding the facts on whether there has been a chargeable gain accruing and/or disposal of assets under the assessment raised by the applicant.

[2] Before proceedings could commence, the counsel for the respondent informed the court that he had reached an amicable settlement with the appellant. After some clarification made by the parties, the court allowed the appeal, and the order of the court of Appeal was set aside. We observed that the majority judgment of the court of Appeal would remain on record, and unless dealt with, would cause confusion to parties and legal advisors alike as it does not reflect the correct position of the law. For the aforesaid reasons, we delivered judgment immediately and indicated to parties that our grounds of judgment will follow subsequently.

[3] Very briefly the facts of the case are as follows:

On 23 April 1997, the respondent entered into a Sale and Purchase Agreement with a company known as Yeng Chong Realty Sdn Bhd (Yeng Chong) wherein the respondent agreed to sell to Yeng Chong a piece of land located in Melaka (the said land) for RM31,739,793.62. The respondent asserted that the sale of the said land to Yeng Chong was not completed as Yeng Chong did not fulfil its obligations under the Sale and Purchase Agreement. As such the respondent contended that it could not be said to have "disposed" of the said land, nor could it be said that a "chargeable gain had accrued to the appellant within the meaning of the Real Property Gains Tax (RPGT) Act. Therefore, according to the respondent, it was not liable at all to pay any RPGT under the law. The respondent asserted that it had filed two Civil Suits No: S-22-1468-2002 and S-22-448-2005 against Yeng Chong in respect of the purchase price payable for the said land, which suits have not yet been concluded.

[4] Before we proceed to deal with the law, the current "mother ship" of Taxing Acts is the Income Tax Act 1967 [Act 53]. For specialised areas of transactions, the legislature enacted similar Taxing Acts to govern assessment of tax in these particular fields, one instance of which is the Real Property Gains Tax Act 1976 , [Act 169] (the said Act). From a perusal of the relevant provisions, provisions relating to assessment of tax, appeals and recovery of tax in the said Act are similar to the Income Tax Act 1967 (Act 53).

[5] In our instant case, ss 14 and 15 of the said Act deal with the raising of notices of assessment by the appellant as set out in s 17 of the said Act. The right to appeal against that assessment is enshrined in s 18 of the said Act and we set out the same:

"Right of appeal

18. (1) A person aggrieved by an assessment made on him may appeal to the Special Commissioners against the assessment in the same manner as an appeal against an assessment of income tax made under the Income Tax Act 1967, and ss 99, 100, 101, 101(1A), 101(1B), 101(1C) and 102 of that Act, as far as they are applicable and with the necessary modificatio