Abdul Aziz Mohamad JCA:

This was an appeal from the High Court's refusal of an order of mandamus to direct the respondent to issue and serve on the appellant company notices of assessment for years of assessment 1982, 1983 and 1984.

According to s. 42 of the Income Tax Act 1967, the statutory income of a person from a source consists of the amount of his adjusted income from that source plus the amount of certain charges falling to be made in relation to that source and then reduced by the amount of certain allowances falling to be made in relation to that source. One of the allowances is set out in para. 15 of Schedule 3 to the Act. It is an allowance for certain plant expenditure. It is known as an annual allowance (para. 14, Schedule 3). The allowance is a proportion of the expenditure. The proportion is prescribed by rules. The first rules were the Income Tax (Qualifying Plant Annual Allowances) Rules 1968 (P.U.154/68), now revoked by the 2000 Rules (P.U.(A) 52/2000). The proportions, or rates as they were termed there, were set out in the Schedule to the 1968 rules. The Schedule was completely substituted by an amendment in 1980 (P.U.(A) 346/1980), the new Schedule becoming the Schedule to the 1968 Rules. In 1982 came the Income Tax (Qualifying Plant Annual Allowances) Rules 1982 (P.U.(A) 74/1982) which were to have effect in respect of qualifying plant expenditure incurred from 1 January 1981 to 3 December 1985. The effect of r. 2 was to apply to the qualifying plant expenditure of a person for that period, for the purpose of determining the annual allowances, a rate specially formulated in that rule (which rate we need not set out), "unless he elects in writing, when claiming an annual allowance for that year in respect of that expenditure, that the allowance be equal to the rates prescribed in the (1968 Rules)".

In the returns that the appellants furnished the respondent under s. 77 of the Actfor the years of assessment 1982, 1983 and 1984, the appellants did not make that election, although presumably they did claim the annual allowances. So the consequence was that the rate specially formulated in r. 2 of the 1982 rales would be applied.

According to the respondent, no assessment was made for those years because the appellants had no chargeable income.

A couple of years later, the appellants, through their tax agents, commenced efforts to have the 1968 rates applied for those years. The efforts apparently started with a letter of the appellants' tax agents dated 27 January 1987. The respondent refused to apply the rates of the 1968 rules.

Being dissatisfied with the respondent's decision in the matter of the rates for the annual allowances, the appellants wished to appeal to the Special Commissioner but they found that according to s. 99(1) an appeal to the Special Commissioner could only lie against, and therefore required, an assessment. So on 9 August 1988 the appellants' tax agents requested the respondent to issue notices of assessment under s. 96(1) for those years. (According to that section, the respondent is required to serve a notice of assessment on the person concerned as soon as assessment has been made). The respondent replied on 28 September 1988 that he could not issue notices of assessment because the appellants had no chargeable income to assess income tax on, but he would produce tax computations for those years. These were furnished in a letter dated 1 December 1988. They showed nil chargeable income for 1983 and 1984 and did not show any chargeable income for 1982.

According to the statement under O. 53 r. 3(2) of the Rules of the High Court 1980that went in support of the appellants' application for leave to apply for mandamus, it was not the appellants' case that the respondent had not made assessments for the years 1982, 1983 and 1984. The appellants' case, as was evident to us from sub-para. (i) of para. 3 of the statement, was that assessments had been made for those years, and sinc