Tee Geok Hock JC:

GROUNDS OF JUDGMENT

INTRODUCTION

[1]On 10 March 2021 this Court granted the Plaintiff a summary judgment against the 1^st and 2^nd Defendants in the sum of RM18,340,245.00 and interests and costs in respect of composite assessment of tax under section 96AIncome Tax Act 1967

[2]Being dissatisfied, the 1^st and 2^nd Defendants have appealed against this Court's decision dated 10 March 2021 which granted summary judgment against them. The Grounds of Judgment in that appeal have been delivered by this Court in respect of the said appeal of the 1^st and 2^nd Defendants.

[3]As regards the Plaintiff's application for summary judgment against the 3^rd Defendant, it was dismissed with an O.14A order that the Plaintiff's claim in the suit against the 3^rd Defendant shall be disposed of by answering a question of law.

[4]The question of law directed for O. 14A disposal of the Plaintiff's claims against the 3^rd Defendant is as follows:

"whether the expression 'during the period in which that tax is liable to be paid by that company in the amended section 75AIncome Tax Act 1967section 75A vide Amendment Act 761".

[5]After having read and considered the parties' respective further written submissions on the question of law, this Court on 30 March 2021 answered the question of law in the negative and therefore dismissed the Plaintiff's claims against the 3^rd Defendant.

[6]The Plaintiff has now appealed against this Court's said decision dated 31 March 2021 which dismissed the Plaintiff's claims against the 3^rd Defendant. The Grounds of Judgment herein will only deal with the said question of law and the resulting dismissal of the Plaintiff's claims against the 3^rd Defendant.

FACTS

[7]The 2^nd and 3^rd Defendants are at all material times the directors and shareholders of the 1^st Defendant, SKS Bumi Jaya Sdn Bhd (formerly known as Wealthy Construction & Communication Sdn Bhd): paragraph 6 of Plaintiff's Affidavit-In-Support (Enclosure 8) and Exhibit "MRCY-1" (SSM search report).

[8]The 2^nd Defendant has been a Director of the 1^st Defendant-company since 30.8.2007 and has been holding 3,495,000 issued ordinary shares in the 1^st Defendant-company, representing 69.9% of the total issued ordinary share capital in the 1^st Defendant-company: see paragraphs 6 and 7 of Plaintiff's Affidavit-In-Support and Exhibit "MRCY-1".

[9]The 3^rd Defendant has been a Director of the 1^st Defendant-company since 18.12.1996 and has been holding 1,505,000 shares in the 1^st Defendant-company, representing 30.1% of the total issued share capital of the 1^st Defendant-company : paragraphs 6 and 7 of Plaintiff's Affidavit-In-Support and Exhibit "MRCY-1".

[10]On 16.4.2018, the Plaintiff and the 1^st Defendant entered into a tax settlement agreement under section 96A(1)Income Tax Act 1967^nd and 3^rd Defendants as Directors on behalf of the 1^st Defendant-company.

[11]Under the tax settlement agreement, it was expressly agreed that "the said sum of RM15,879,000.00 shall be paid by the Company to the Director-General of Inland Revenue in the following manner, that is to say:

(a)initial payment of RM3,975,000.00 on or before 31 May 2018 and

(b)forty eight (48) monthly instalments of RM248,000.00 each payable on or before the last day each month commencing from June 2018.

but provided that if any instalment is not paid on the due date the full amount then outstanding shall become due and payable forthwith."

[12]The signing of tax settlement agreement by the 1^st Defendant was backed by the 1^st Defendant's Directors' Circular Resolution in writing: paragraph 9 of Plaintiff's Affidavit-In-Support and Exhibit "MRCY-3".

[13]Pursuant to the tax settlement agreement, the Plaintiff issued to and served on the 1^st Defendant a Notice of Composite Assessment dated 15.5.2018 for Years of Assessment 2008 to 2013 stating that the tax amount of RM15,879,000.00 is payable by the 1^st Defendant company: paragraph 11 of Plaintiff's Affidavit-In-Support and Exhibit "MRCY-4".

[14]When the 1^st Defendant defaulted i