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2023 MarsdenLR 869
HIGH COURT (SHAH ALAM)
SHAHNAZ SULAIMAN, J
Courts (Malaysia) Sdn Bhd – Plaintiff
Versus
Menteri Kewangan Malaysia – Defendant
PERMOHONAN SEMAKAN KEHAKIMAN NO BA-25-83-12/2022
An applicant for judicial review must disclose all relevant facts; failure to do so leads to dismissal for lack of an arguable case, especially when alternative remedies exist.
Headnote:(A) Income Tax Act 1967 - Subsections 127(3A) and 135 - Judicial review application for exemption from tax assessment - Court ruled that respondent had no obligation to respond as the omission does not equate to rejection of application - Applicants must disclose all relevant facts for consideration - Application dismissed for lack of merit. (Paras 12, 26, 38, 48)
(B) Judicial Review - Principles governing leave to apply - Leave may be granted if an arguable case is disclosed, and application is not frivolous - Must disclose all material facts known to ensure a prima facie case - Court must consider the merits of both the application and objections raised. (Paras 14, 26, 40)
(C) Leave and Mandamus - The judicial review seeks to impugn administrative actions; an assessment must be challenged through prescribed legal avenues and cannot be resolved through judicial review when alternative remedies are available. (Paras 39, 41)
| Table of Content |
|---|
| 1. judicial review application initiation (Para 1 , 2 , 3 , 4) |
| 2. nature of applicant's tax-related communications with irb (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 3. principles governing leave for judicial review (Para 13 , 14 , 15) |
| 4. objections raised regarding applicant's candour (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 25) |
| 5. discussion on abuse of process in judicial review (Para 26 , 27 , 28 , 29) |
| 6. interpretation of respondent's failure to respond (Para 30 , 31 , 32 , 33 , 34) |
| 7. limitations on the respondent's duties (Para 35 , 36 , 37) |
| 8. assessment of arguable case in judicial review applications (Para 40 , 41 , 42 , 43 , 44) |
| 9. considerations for application stay (Para 46 , 47) |
[1]This is an application under Order 53 rule 3 of the Rules of Court 2012Courts (Malaysia) Sdn Bhd for leave of court to commence judicial review proceedings against the respondent, the Minister of Finance.
[2]The main relief sought by the applicant is for an order directing the respondent to exercise the respondent’s power to give an exemption under subsection 127(3A)Income Tax Act 1967section 135ITA
Brief Factual Background
[3]The facts as garnered from the submission and affidavits filed are as follows. The applicant is principally involved in the retailing of electronic and electrical appliances as well as household furniture and furnishing which are available for sale on cash and credit basis.
[4]About 70% of the applicant’s business takes place on a credit basis through an instalment payment scheme known as Flexi Credit Plan. This scheme has been in place since 1987 when the applicant started its business in Malaysia.
[5]Vide a letter dated 28.9.2020, the Inland Revenue Board (“IRB”) informed the applicant of its preliminary audit findings. IRB contended, among others, that section 4BITA
[6]On 20.10.2020, the applicant issued a letter to the IRB stating that the interest income should be assessed as business income under section 4(a) ITA
[7]IRB vide a letter dated 28.3.2022 maintained its position.
[8]On 11.10.2022, the IRB via an email attached a letter dated 11.10.2022, where the IRB maintained its position that the interest income should be assessed under section 4(c) ITA
[9]On 25.10.2022, the applicant issued a letter dated 21.10.2022 disagreeing with IRB’s position.
[10]On 9.12.2022 Form JA for the Year of Assessment 2017 and NONC for the Year of Assessment 2018 and 2019 were raised against the applicant.
[11]On 21.12.2022, the applicant submitted a request to the respondent to give the DGIR directions under section 135subsection 127(3A) ITA
[12]The respondent failed to respond to the applicant’s request to issue a direction under section 135subsection 127(3A) ITA
Principles for granting leave
[13]There are two stages in judicial review proceedings as provided under Order 53 of the Rules of Court 2012
[14]For the leave stage of the judicial review proceedings, there are established principles for the court to determine whether leave ought to be granted or not. The principles are authoritatively settled and set out in the case of WRP Asia Pacific Sdn Bhd v. Tenaga Nasional Bhd ;
“At the leave stage, on a quick perusal of the material available, if the court thinks that subsequently at the substantive hearing stage an arguable case may be disclosed, and the relief sought may be granted, leave should be granted ...Without the need to go into depth of the abundant authorities, suffice if we state that leave may be granted if the leave application is not thought of as frivolous, and if leave is granted, an arguable case in favour of granting the relief sought at the substantive hearing may be the resultant outcome. A rider must be attached to the application though ie, unless the matter for judicial review is amenable to judicial review absolutely no success may be envisaged.”
[15]The guiding principles for leave for an application for judicial review is that the applicants must show prima facie that the application is not frivolous
