JUDGMENTBY: EDGAR JOSEPH JR FCJ (DELIVERING THE GROUNDS OF JUDGMENT OF THE COURT) FCJ

This was an appeal by the Government of Malaysia (the Revenue) from an order of the High Court Tawau, Sarawak (Ian Chin J) extending an order of stay of execution in respect of an order for summary judgment under O 14, obtained against the taxpayer, Jasanusa Sdn Bhd (the taxpayer), on 2 March 1993, pursuant to two notices of assessment, both dated 4 January 1990 in respect of the years of assessment 1984 and 1986, demanding payment of the sums of RM3,183,717.50 and RM2,492,609.85, respectively.

The background facts may be taken in substance from the judgment of the learned judge where they have been set out with admirable clarity and detail.

By a letter dated 15 November 1990 from the Revenue to the taxpayers agents, the Revenue had requested from the taxpayer the following material:

(1) a list of the vehicles, their registration numbers, chassis

numbers, types, engine power, costs, dates of purchase, dates of

sales, the names, identity card numbers and addresses of the

purchasers and the sale prices;

(2) a letter from the Road Transport Department certifying the

vehicles to have been registered in the taxpayers name; and

(3) copies of the hire-purchase/leasing agreements.

In response to this request, the taxpayers agents had, by letter dated 26 March 1991, supplied to the Revenue letters of the Forestry Department, documents of the Road Transport Department and lists relating to the ownership, registration numbers, chassis numbers and engine horse powers of some 48 vehicles. This letter ended with the following paragraph:

Since the vehicles were sold many years ago, our client could not

obtain any vehicle registration cards or letters from the Forestry

Department or JKJR to substantiate their ownership over the rest of the

vehicles. However, efforts are [being] made to obtain confirmation

letters from the relevant buyers and these will be forwarded to you if

any are received.

Based on documents now enclosed, we shall be pleased if you could

finalize our clients tax affairs for assessment years 1984 and 1986 as

soon as possible.

On 17 February 1992, the taxpayer had lodged Form Q with the Revenue which evoked the following response from the Revenue by letter dated 15 May 1992:

We have received the Form Q. The Director General [intends] to review

the assessment under s 101(1).

You are hereby directed to furnish the following particulars in respect

of your claim of capital allowances.

(2) 1: List of all the assets along with the date of purchase and

documentary evidence of ownership.

(2) 2: The documentary evidence of use in the company.

(2) 3: In addition to the above you are hereby requested [to

produce] all books of accounts to show and [confirm] the

ownership.

2 Please note that in the absence of the above documentary

evidence, the Director General may not amend the notice of

assessment.

3 It is proposed to hold a follow-up meeting on Monday, 25 May 1992

at 10am in our office. The presence of the board of directors is

essential.

Contemporaneously, the Revenue had by another letter, also dated 15 May 1992 addressed to the taxpayer, requested the following material:

(1) schedule of export sale;

(2) schedule of payment of extraction fee;

(3) schedule of payment of royalty;

(4) schedule of timber purchased;

(5) schedule of timber licence utilized licence issued to outside

agency/party utilized;

(6) schedule of utilization of companys timber licence; and

(7) schedule of purchase of fixed assets.

The taxpayers agents had replied thereto by a letter dated 8 June 1992 which, however, was not included in the record of appeal provided.