Syed Ahmad Idid JC:

The plaintiffs' claim is for RM592,524.24 due from the defendant as income tax and penalty under Income Tax Act 1967 and the plaintiffs pray for judgment for:

(a) the sum of RM592,524.24;

(b) interest thereon at the rate of 8% per annum from the date of judgment to the date of payment;

(c) costs of this suit;

(d) such further and other reliefs as the Court deems fit.

From the records, this matter has come before the Court on more than three occasions since 1987. The hearing and the written submissions were completed between 28 January 1991 and 4 March 1991.

On 6 May 1988, the plaintiffs filed a summons-in-chambers asking to enter final judgment under O. 14 of the Rules of High Court 1980 on two grounds:

(a) a certificate signed by the Senior Assistant Director of Inland Revenue giving the name and address of the defendant and the amount of tax due from him shall be sufficient evidence and authority for the Court to give judgment;

(b) there is no defence to this suit.

On 20 July 1988, Lee Beng Hock of Unit SH.01-24.3 Jabatan Hasil Dalam Negeri explained that the delay in filing of the O. 14 application was due to two reasons:

(a) the statement of defence dated 20 November 1987 filed by the defendant's Counsel raised a number of issues and the plaintiffs' civil suit unit had to refer the matter to the plaintiffs' assessing unit for their opinion and for the purpose of preparing the O. 14 application;

(b) Before the O.14 application could be prepared the officer-in-charge of the civil suit in the plaintiffs' branch in Kota Kinabalu was transferred to Kuala Lumpur and this situation inadvertently led to the misfiling of the defendant's file.

Mr. Lee Beng Hock, an Examiner in the Department of Inland Revenue, signed an affidavit on 9 February 1988 affirming that:

(a) The defendant, Lee Tain Tshung @ Lee Thien Chiung, is justly and truly indebted to the plaintiff in the sum of RM592,524.24 being income tax due for year of assessment 1974, Additional and Increases of Income Tax levied under ss. 103(4) and 103(5A) of the Income Tax Act 1967;

(b) As required by the provisions of s. 96 of the Income Tax Act 1967, the defendant had been notified of the amount of chargeable income, the tax charged thereon, the place at which payment is to be made, the penalty for late payment increases imposed by ss.103(4) and 103(5A) of the Income Tax Act 1967, and his rights of appeal under s. 99 of the Income Tax Act 1967.

(c) With reference to para. 2(a), (b), (c) and (d) of the statement of defence filed in Court, the income tax for the year of assessment was raised under the provisions of the Income Tax Act 1967. The defendant appealed against the said assessment and his appeal will be dealt with according to s. 99 of the Income Tax Act 1967.

(d) A certificate under s. 142(1) of the Income Tax Act 1967, signed by the Senior Assistant Director for and on behalf of the Director-General of Inland Revenue shall be sufficient evidence and authority for the Court to give judgment for the amount.

Five months later, on 7 July 1988, the defendant filed an affidavit-in-opposition where:

(1) he denied he was indebted to the plaintiffs in the sum of RM592,524.24 being income tax as alleged or at all on the following grounds:

(a) the alleged tax of RM513,008 was purported to be charged on capital receipts of RM600,000.

(b) capital receipts amounting to RM600,000 arising from the realisation of investment in a rubber estate contained in CL2016. District of Kota Kinabalu, to repay loan/overdraft facilities demanded by Bank Bumiputra Malaysia Berhad does not constitute gains or profits from a business and therefore should not be included as taxable income. CL2016 was charged to Bank Bumiputra Malaysia Berhad for 1/4 million from 13 June 1972 for quarry operation by him under the name and style of The Sun Enterprise.

(c) the realisation of the investment was also for the satisfaction of outstanding amounts demanded by MIDF for a quarry p