Azmi LP:

This is an appeal against the judgment of the High Court at lpoh giving leave to the plaintiff, Government of Malaysia, to sign final judgment against the defendant company, for the sum of $1,320,440.15 cts, alleged to be additional income tax and increases on that additional income tax imposed under the law against the defendant company for the years of assessment 1960 to 1971.

The writ in this suit was duly served on the defendant and the defendant entered appearance on 31 October 1972. It filed its defence on 7 December 1972. The defence denied that it was liable to pay any additional income tax or increases, assessed or imposed against it. It also contended that s. 106(3) of the Income Tax Act 1967 was of no assistance since the defendant company's plea was that no tax whatsoever was due by it to the plaintiff. It went on to maintain that the certificate signed by the Director-General under s. 142(1) of the Income Tax Act was merely rebuttal evidence.

The plaintiff, 13 days later applied for leave to sign final judgment against the defendant. The application was heard by the Senior Assistant Registrar on 18 January 1973 and she gave leave to sign final judgment as claimed. The defendant appealed to the Judge. The learned Judge gave leave to defend on condition that the defendant deposited the amount claimed in Court before 30 April 1973 and when defendant failed to do so the learned Judge subsequently restored the order of the Senior Assistant Registrar. Against that judgment the defendant company appealed to this Court.

The learned Judge in his judgment pointed out that under the provisions of O. XIV r. 1, a defendant should be given unconditional leave to defend if he can satisfy the Court that he has a good defence to the action on the merits or discloses such facts as would be deemed sufficient to entitle him to defend the action generally. I might further state here that where there is a bona fide triable issue the defendant is entitled to leave to defend without being put upon terms to pay money into Court, even though it may appear that the defendant is not likely to succeed (Jacobs v. Booth's Distillery Co. [1901] 85 LT 262, Runnacles v. Mesquita [1876] 1 QBD 416 and a defence on merits includes any legal defence. The learned Judge pointed out that by reason of the provisions of s. 106(3) of the Income Tax Act of 1967, the Court was precluded from entertaining any plea that the amount sought to be recovered by the Government was excessive, incorrectly assessed or was the subject matter of an appeal before the Special Commissioners. Section 106 reads as follows:

106 (1) Tax due and payable may be recovered by the Government by civil proceedings as a debt due to the Government

(2) ...

(3) In any proceedings under this section the Court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased under s. 103(4) or (5).

The learned Judge then referred to the provisions of s. 142(1) of the Act, and that sub-section reads as follows:

142(1) In a suit under s. 106 the production of a certificate signed by the Director General giving the name and address of the defendant and the amount of tax due from him shall be sufficient evidence of the amount so due and sufficient authority for the Court to give judgment for that amount.

He pointed out that if a suit was brought under s. 106 of the Act a certificate signed by the Director-General that the defendant was the person from whom that tax was due and if the certificate gave the amount of the tax to be due, then such a certificate "shall be sufficient evidence of the amount so due and sufficient authority to give judgment for that amount." The amount specified in the certificate was consequently prima facie evidence that the amount claimed by the plaintiff was the amount due from the defendant. He went on therefore to say that if the taxpayer wished to dispute t