JUDGMENT

Peh Swee Chin SCJ:

In Government of Malaysia v. Preston Corpn. (M) Sdn. Bhd. [1981] Wan Hamzah J (as he then was), held that a penalty imposed by the Director General of Inland Revenue under s. 113(2) of Income Tax Act 1967, was an assessment within the meaning of the word, and was therefore appealable to the Special Commissioners under s. 99(1).

Apparently, this did not find acceptance from all quarters so that the same issue was re-litigated in the instant appeal, when Tallala J in Muar High Court again came to the same conclusion upholding what Hamzah J (as he then was) decided. We feel it imperative to re-examine the same point in order to crystalize the position one way or another.

To recapitulate the salient facts, the respondents, (hereinafter called the taxpayers), using a heading entitled "Purchase of Logs" in their income tax returns, inter alia, apparently caused the Ketua Pengarah Hasil Dalam Negeri (hereinafter called the Revenue) to miss charging the taxpayers with timber profits tax. When the Revenue realized it they assessed and charged the timber profits tax which the taxpayers duly paid without protest apparently and there has been no appeal from this ass