The erroneous classification of an entity as an importer due to improper evaluation of transaction facts can lead to unlawful tax demands.

[1] This is an appeal against the decision of the High Court at Shah Alam, given on the 29 November 2013, dismissing the appellant's judicial review application. In the judicial review application the appellant had sought for an order of certiorari to quash the decision of the Minister of Finance (1^st respondent) dated 25 May 2012. The decision of the 1^st respondent was a refusal of remission of import duties and sales tax pursuant to s 14A of the Customs Act 1967 and s 33 of the Sales Tax Act 1972 respectively, applied for by the appellant.

[2] Having read the written submissions of parties and heard their oral submissions on 11 August 2014, we stood down the matter for our further deliberation. We indicated to the parties that we would deliver our decision on a date to be informed. This is our decision.

[3] The appellant was in the business of buying and selling used prime movers. In the months of March to June 2008, the appellant bought 69 units of used prime movers. The appellant claimed that it had bought the used prime movers from Scania Malaysia Sdn Bhd (Scania Malaysia) at a unit price of RM111.278.50 to RM119.874.00 depending on the model (pp 238 to 241 Appeal Records). The supplier or exporter of the Prime Movers was Scania (GB) Ltd United Kingdom (Scania UK).

[4] The importation of the prime movers requires an Approved Permit ("AP") issued by the Ministry of International Trade and Industry. Declaration in the customs declaration form (Borang K1) and payment of the customs duties as well taxes must be made before the said prime movers could be released from customs' control.

[5] In the Borang K1, the name of another company, Red Synergy Corporation Sdn Bhd (Red Synergy) was stipulated as the consignee/importer of the said prime movers. Red Synergy held the APs in respect of importing the prime movers. Two authorised agents nominated to handle the importation were lMF Supplies & Service Sdn Bhd and Yumaco Freight Sdn Bhd respectively ('the forwarders'). After clearance with the customs, the forwarders issued the invoices for the customs duties, sales tax as well as other charges to the appellant. A lump sum payment for the invoice was made by the appellant as shown at pp 352 and 432 of the Appeal Records.

[6] The customs officer in ascertaining the customs duties payable had based his assessment on "harga panduan taksiran". After payment of the duties by the forwarders, the customs released the prime movers. The Customs Officer had valued RM33,000.00 as customs duties per unit of prime mover in accordance with s 13(1) of the Customs Act 1972.

[7] Subsequently, an audit was conducted by the 2^nd respondent on Scania Malaysia in respect of the importation of the said prime movers for the purposes of verifying the declared value by the importer and the assessed value by the Customs Officer.

[8] From the audit conducted, it was discovered that the declared value and the assessed value were not based on the actual amount paid to the exporter. There was therefore a shortfall in the import duties and sales taxes (short-paid taxes) paid to the customs.

[9] Treating the short-paid taxes as a debt due to them, the 2^nd respondent had proceeded to take steps to recover the same from the appellant instead of Scania Malaysia upon whom the audit was conducted. First, a Notice of Demand dated 25 March 2011 was issued to the appellant requesting payment of the short-paid taxes of 23 units of the prime movers. Another Notice of Demand dated 1 April 2011 was issued by the customs demanding payment of short-paid taxes for the remaining 45 units of prime movers. The total amount of short-paid taxes was RM782,087.19 and