Stamp duty is applicable to the total consideration for property transfers and cannot be split into separate components, including fees for infrastructure works.

[1] The appellant had lodged an appeal against the judgment of the Court of Appeal. Leave to appeal was granted by this Court on 15 June 2009 to determine the following question:

whether, in an agreement whereby the purchaser of land also appoints the vendor to carry out infrastructure works in the vicinity of the property for a fee but the completion of the sale and purchase of the property and registration of the transfer is independent of the completion of the infrastructure works and payment of the infrastructure fee, the infrastructure fee should form part of the consideration for the transfer or conveyance of the property under item 32(a) of the First Schedule of the Stamp Act 1949 .

[2] In order to appreciate the above question fully, a need arises for us to highlight in brief some of the antecedents and facts of the case, and they are as follows. BASF Services (Malaysia) ie, the appellant purchased a piece of property held under HS (D) 20021 PT NO 8030, Mukim Sungai Karang, Daerah Kuantan, Negeri Pahang (the property) from Perbadanan Kemajuan Negeri Pahang (PKNP) pursuant to an agreement dated 11 October 1997. The agreement carries the title "Purchase, Sale, Development and Infrastructure Agreement" (hereinafter referred to as the agreement) and at the time of the agreement PKNP was the beneficial owner. It was yet to be issued with the document of title to the property though alienation has been approved.

[3] The agreement comprises three types of payment to be made to PKNP, namely, the purchase price of RM84,593,372, a development fee for development and preparation of the property to be undertaken by PKNP amounting to RM24,794,609 and a sum of RM61,257,269 for the infrastructure fee, also payable to the latter. The aggregate sum is RM170,645,250. In consideration of the payment of deposits towards the purchase price, the development fee and the infrastructure fee, PKNP agrees to sell and the appellant agrees to purchase the property free of encumbrances.

[4] This agreement, which is also conditional upon approval of the Foreign Investment Committee provides that after the signing of the agreement, PKNP is to procure the issuance of a separate document of title free from encumbrances, liens etc. from the relevant authorities. Upon the agreement becoming unconditional, PKNP, after receiving the issue document of title of the property, is to execute and deliver a valid and registrable Memorandum of Transfer in favour of the appellant. After the needful has been carried out in accordance with the agreement the transfer form will be sent to the Collector of Stamp Duties, ie, the respondent for stamp duty adjudication. Adjudication is the process whereby a document either stamped or unstamped is presented to the Collector for assessment of the stamp duty chargeable. It will be the appellant's responsibility to pay the stamp duty.

[5] Even though the transfer form was sent for adjudication, the appellant stated that the purchase price to be RM84,593,372, thus omitting the development and infrastructure fees as part of the consideration. Despite that downsized contractual sum, the respondent still assessed the stamp duty on the aggregated contractual sum of RM170,645,250, under item 32(a) of the First Schedule to the Stamp Act 1949 (the Act). The First Schedule specifies the instruments chargeable with stamp duty and the proper stamp duty to be imposed. In the instant case, notice of assessment dated 30 December 1999, on an ad valorem basis, the Collector of Stamp Duties had assessed the stamp duty chargeable to be RM6,799,804.

[6] Being dissatisfied with the stamp duty imposed, the appellant filed a notice of appeal by way of case stated to the High Court. The learned judge of the High Court concluded that stamp duty was payable only on the purchase price and the development fee, thus excluding the infrastructure fee. The respondent's assessment was thereupon set aside. Ironically even though the developm