Jasa Merin (Malaysia) Sdn. Bhd. v Pemungut Duti Setem (WA-25-318-10/2023)

JASA MERIN (MALAYSIA) SDN. BHD. (No. Pendaftaran Syarikat: 198001002390 (56173-U))

JM GLOBAL 3 (LABUAN) PLC (No. Pendaftaran Syarikat: Ll06542)

JM GLOBAL 4 (LABUAN) PLC (No. Pendaftaran Syarikat: Ll06549) … PEMOHON-PEMOHON

1.

MENTERI KEWANGAN … RESPONDEN-RESPONDEN)

The Applicants file this judicial review application to impugn two decisions; that of the Collector of Stamp Duty (1st Respondent) imposing Ad Valorem duties on the agreements executed by the Applicants and the Minister of Finance (2nd Respondent) who refused the Applicants the exemption from such duties.

The Applicants seek the following orders:

Certiorari to quash the 1st Respondent’s Notices of Assessment dated 15.08.2023 and 17.08.2023 on the Restructuring Documents, on grounds of illegality, irrationality, unreasonableness, and/or breach of legitimate expectation;

(ii) Certiorari and/or declaration to quash the 2nd Respondent’s Decision by way of the letter dated 12.07.2023 which rejected the application for stamp duty exemption;

(iii) Declaration that all Restructuring Documents are exempt from stamp duty under Section 35 and Paragraph 3 of the General Exemptions, First Schedule of the Stamp Act 1949;

(iv) Further or alternatively, a mandamus directing the 1st Respondent to reassess the Restructuring Documents under Item 22(2)(a) of the First Schedule of the Stamp Act; and

Mandamus directing the 1st Respondent to refund the stamp duty already paid pursuant to the Notices of Assessment. Key background facts

The facts giving rise to the present proceedings are as follows:

Between 2005 and 2016, the Applicants acquired 21 vessels through shipbuilding contracts with Malaysian shipyards as part of their fleet expansion program;

(ii) To finance the purchase of these vessels, the Applicants obtained financing from Affin Bank Berhad, Bank Pembangunan Malaysia Berhad and Maybank Islamic Berhad through separate Facilities Agreements with each bank (“Original Financing Documents”);

(iii) The 1st Respondent granted stamp duty exemptions on all the Original Financing Documents under Section 35 and Paragraph 3 of the General Exemptions, First Schedule to the Stamp Act 1949;

(iv) The global oil price crash in 2016 and the Covid-19 pandemic, severely impacted the Applicants’ business operations which made it necessary for the Applicants to restructure their existing loan repayments. Pursuant thereto, the Applicants executed new agreements; (“Restructuring Documents”);

By a letter dated 31.01.2020, the Applicants’ solicitors applied for stamp duty exemption on the Restructuring

(vi) However, on 11.02.2020, the 1st Respondent issued a Notice of Stamp Duty Assessment for the Affin Bank Restructuring Document, imposing ad valorem duty of RM 1,540,000.00 under Item 27(a)(iii), First Schedule to the Stamp Act;

(vii) The Applicants were subsequently informed that all Restructuring Documents would be subject to ad valorem duty and would not receive the same exemption as the Original Financing Documents;

(viii) In response, the Applicants submitted various appeals to the 1st Respondent for an exemption from ad valorem duty. They were informed that the imposition of ad valorem duty would be maintained;

(ix) Simultaneously, the Applicants also submitted an exemption application by letter of 12.12.2020 to the 2nd Respondent;

On 5.1.2021, the 2nd Respondent issued a response rejecting the Applicants’ exemption application, stating as follows: "2. Kementerian Kewangan telah meneliti permohonan tetuan untuk mendapatkan pengecualian duti setem ke atas restructured security documents termasuk facility agreement bagi pihak Jasa Merin (Malaysia) Sdn. Bhd. dan dimaklumkan bahawa permohonan tersebut tidak diluluskan."

(xi) Thereafter, the 1st Applicant continued to appeal to the 2nd Respondent;

(xii) By letter dated 13.4.2023 the 2nd Respondent informed the 1st Applicant that its appeal was not allowed, and the decision of 5.1.2021 remains;

(xiii) On 12.7.2023, the 2nd Respondent responded again to inform the 1st Applicant that its earlier decision on 13.4.2023 stands;

(xiv) Following the decision of the 2nd Respondent, the 1st Respondent then issued five Notices of Assessment dated 15.8.2023 and 17.8.2023 respectively to the Applicants imposing Ad Valorem duties on the Restructuring Documents including penalties. On appeal by the Applicants on the penalties, the 1st Respondent agreed to waive the penalties. The Applicants paid the ad valorem duties on 14.9.2023;

(xv) On 9.10.2023, the Applicants sent a Notice of Objection to the Ad Valorem duties assessed pursuant to section 38A of the Stamp Act 1949;

(xvi) On review of the assessment made, the 1st Respondent maintained the Ad Valorem duty. The Applicants were duly notified of the decision;

(xvii) Dissatisfied with the decision of the 1st Respondent, the Applicants then filed an appeal to the Kuala Lumpur High Court against the decision by filing five Originating Summons in respect of the five Restructuring Documents;

(xviii) Concurrently, the Applicants have also filed the present judicial review proceedings. Grounds for review

The Applicants contend that the 2nd Respondent’s decision in refusing to grant exemption and the 1st Respondent’s Notices of Assessments are vitiated by illegality, irrationality, and/or procedural impropriety, thereby amenable to judicial review.

The reasons in support can be broadly summarized as follows:

The exemption given to the Original Financing Documents have given rise to a legitimate expectation that the same exemption granted would similarly apply to the

(ii) The Respondents acted contrary to the Stamp Act 1949 by failing to apply similar exemption under Paragraph 3 of the General Exemptions, First Schedule to the Stamp Act as the Restructuring Documents are supplementary instruments of the Original Financing Documents. Alternatively, it ought to have imposed nominal duty under Item 22(2)(a), First Schedule to the Stamp Act, to the Restructuring Documents being supplementary instruments of the Original Financing Documents; and

(iii) The Respondents acted unreasonably and irrationally in failing to appreciate the true nature of the Restructuring Documents and common industry practices in ship financing. Contention of the 1st Respondent

The 1st Respondent raises a jurisdiction issue in that this Court has no jurisdiction to hear the challenge to the assessments by way of judicial review. Instead, the Applicant’s remedy is by bringing an appeal under section 39 of the Stamp Act. Having in fact done so, this judicial review proceedings is an abuse of the process of the court.

On the merits, the 1st Respondent contends that the Restructuring Documents involve loan facility and do not fall under the General Exemption in section 35 read with Paragraph 3 of the First Schedule to the Stamp Act 1949. As such, the instruments were correctly imposed Ad Valorem duty under Item 27(a)(iii) of the First Schedule to the Act.

The issue of legitimate expectation does not arise nor does it apply. The Original Financing Documents are different from the Restructuring Documents. In any event, this issue is a matter to be ventilated in the appeal under section 39. Contention of the 2nd Respondent

The 2nd Respondent takes the position that the judicial review application is time-barred. The decision to reject the application for exemption was given on 5.1.2021. This is the operative date the decision was made and which the judicial review application is to be premised on. The Applicants have failed to file the application within three months from this date as mandated under O. 53 r. 3(6) of the Rules of Court 2012.

Section 80 of the Stamp Act confers a wide discretion on the 2nd Respondent to grant or refuse an exemption. His decision is not subject to scrutiny in review proceedings. Analysis and findings Application against 2nd Respondent is time barred

I shall deal with the Applicants’ case against the 2nd Respondent as it concerns a jurisdiction point.

The provisions of O. 53 r. 3 (6) of the Rules of Court 2012 obligate the Applicants to file the present application within 3 months from the date of the decision it is seeking to impugn.

The law on mandatory compliance within the time frame to apply for judicial review is well settled. Before an application for judicial review can be entertained, compliance with the procedure laid down is imperative. Failure to observe the period stipulated in Order 53 of the Rules of Court 2012 goes to jurisdiction.

In Wong Kin Hoong & Anor (suing for themselves and on behalf all of the occupants of Kampung Bukit Koman, Raub, Pahang) v Ketua Pengarah Jabatan Alam Sekitar & Anor. [2013] 4 MLJ 161 the Federal Court held, In conclusion, we are of the view that the time frame in applying for judicial review prescribed by the Rules is fundamental. It goes to jurisdiction and once the trial judge had rejected the explanation for the delay for extension of time to apply for judicial review, it follows that the court no longer has the jurisdiction to hear the application for leave for judicial review. Whether the application has merits or not, is irrelevant. (See also: Ketua Pengarah Hasil Dalam Negeri v Genting Malaysia Bhd [2025] 2 MLJ 822 (CoA)).

The Applicants through their solicitor’s letter of 12.12.2020, applied to the 2nd Respondent for stamp duty exemption.

The power of the 2nd Respondent to grant exemption is provided for under the following provision: Power to exempt, reduce or remit duties

(1) The Minister of Finance may by order published in the Gazette exempt from duty, which would otherwise be chargeable under this Act, any class of instrument or any of the instruments belonging to that class, or any instruments when executed by or in favour of any particular class of persons, or by or in favour of any members of that class.

The Minister of Finance may in any particular case—

exempt from duty any instrument or all instruments in relation to any scheme which would otherwise be chargeable under this Act; or

(ii) reduce or remit the duties with which any instrument or all instruments in relation to any scheme are chargeable.

The Minister of Finance may by order published in the Gazette reduce or remit, in the whole or any part of Malaysia, the duties with which any particular class of instruments, or any of the instruments belonging to such class, or any instruments when executed by or in favour of any particular class of persons, or by or in favour of any members of such class, are chargeable.

Any order made under subsection (1) or (2) or any exemption, reduction or remission made under subsection (1A) may be made to operate retrospectively to any date, whether before or after the commencement of this Act, and may relate to duties chargeable under any written law repealed by this Act as well as to duties chargeable under this Act, and, in the case of any such exemption, remission or reduction, any moneys paid in respect thereof shall be refunded.

The 2nd Respondent replied by letter of 5.1.2021 that the application for exemption was not approved.

Subsequent to this letter, the Applicants were repeatedly informed the same in response to several appeal letters sent. To recapitulate, the Applicants were informed via the 2nd Respondent’s letters dated 29.12.2022, 13.4.2023 and yet again on 12.7.2023 that their appeals cannot be considered. What is significant is at all material times, reference was made to the decision on 5.1.2021 when the Applicants were first informed that their application for exemption was not approved.

However, for the purpose of these proceedings, the Applicants have taken the response of the 2nd Respondent given on 12.7.2023 as the impugned decision. This is apparent from the reliefs sought, and the intitulement in the cause papers filed.

I am of the view that the Applicant is wholly misconceived in taking this position. There was no decision to speak of on 12.7.2023. It was but another response in the series of rejection to the Applicants’ appeals.

It is material to note that the Stamp Act 1949 makes no provision for an appeal against a decision made under s. 80. Therefore, the decision against which the Applicant should challenge is that of 5.1.2021, and no other.

The Applicants cannot be allowed to take the last response of the 2nd Respondent for the purposes of computation of time to file judicial review proceedings.

Therefore, having filed this application for judicial review on 11.10.2023, the Applicant was clearly time-barred from doing so.

Where an applicant fails to file the judicial review application within 3 months, he may still be allowed to file the application if he successfully applies for an extension of time under Order 53 r. 3(7). However, the Applicant did not do so.

In the circumstances, premised on the authorities hereinbefore cited, this court has no jurisdiction to hear this application against the 2nd Respondent.

The wordings of section 80 confers on the 2nd Respondent a power whether to allow the exemption or otherwise. This is evident from the word “may” employed in the provision. The terms of the provision are clear in that the 2nd Respondent is conferred the power to exempt from duty an instrument which is otherwise chargeable with duty under the Stamp Act.

Viewed in the context of the wordings of the provision, I am of the view that the power given to the Minister is wide and it is purely permissive. The Minister is not required to exercise it positively in favour of the Applicants. If he refuses, he is not required to justify his refusal. The discretion to grant or not to grant the exemption is his alone, and is not subject to scrutiny. The words employed in section 80 suggests it to be so as “the Minister may by order published in the Gazette exempt from duty any class of instruments or any of the instruments belonging to that class….”.

Therefore, the merits of his decision in allowing the exemption or otherwise cannot be the subject of challenge in judicial review proceedings. Recourse to the remedy under s. 39 of Stamp Act

On 9.10.2023, the Applicants through their solicitor made an objection to the Ad Valorem Duty assessments on the Restructuring Documents by sending a Notice of Objection under section 38A. The relevant provision reads: Notice of objection

(1) Any person who is dissatisfied with an assessment or additional assessment of the Collector under this Part may, by written notice (referred to in this Act as “notice of objection”), object to the assessment or additional assessment and apply to the Collector to review the assessment or additional assessment.

Every notice of objection shall state the grounds of objection to the Collector’s assessment or additional assessment and shall be made within thirty days after the date of the assessment or additional assessment or such further period as the Collector may allow in any particular case.

The person giving a notice of objection shall furnish further particulars and information in relation to the grounds of the objection if required to do so by the Collector in writing.

The Collector shall, on receipt of a notice of objection and such further particulars and information as he may require under subsection

(3), review the assessment or additional assessment.

After the objection has been determined, the Collector shall notify the person in writing of his decision.

Thereupon, the Collector reviewed the assessment decided to maintain the Ad Valorem duty imposed. The Applicants were informed of the decision pursuant to section 38A (5).

The Applicants then filed five Originating Summons to the Kuala Lumpur High Court in respect of all the agreements executed, bearing the following suit numbers as follows:

WA-24-91-12/2023;

(ii) WA-24-92-12/2023;

(iii) WA-24-32-03/2024;

(iv) WA-24-33-03/2024; and

WA-24-34-03/2024.

These cases are presently pending in the courts filed.

Section 39 allows the Applicants to appeal against a decision made under s.38A (5). The provision states as follows:

(1) Any person who is dissatisfied with the decision of the Collector under subsection 38A(5) may, within twenty-one days after the person is notified in writing of that decision and upon payment of duty in conformity therewith, appeal against the decision to the High Court by filing a notice of appeal with the High Court and may for that purpose require the Collector to state and sign a case, setting forth the question upon which is opinion was required, and the decision made by him.

Therefore, the proper remedy and platform to address the Applicants’ grievance on the assessments has been clearly provided under Section 39 of the Stamp Act 1949.

35.

The Applicants have correctly resorted to the procedure in section Nonetheless, the judicial proceedings are also being proceeded concurrently. I find that they are precluded from doing so by decided authorities.

In Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ 185, the Supreme Court examined U.K cases that have been decided on the issue and found it to have consistently upheld the cardinal principle that save in the most exceptional circumstances the review jurisdiction will not be exercised where other remedies are available. It held as follows: A clear principle is reiterated here i.e. it is not a rigid rule that whenever there is an appeal procedure available to the applicant he should be denied judicial review. Judicial review is always at the discretion of the court but where there is another avenue or remedy open to the applicant it will only be exercised in very exceptional circumstances. …. In answer to the first question we would therefore hold that the discretion is still with the courts but where there is an appeal provision available to the applicant certiorari should not normally issue unless there is shown a clear lack of jurisdiction or a blatant failure to perform some statutory duty or in appropriate cases a serious breach of the principles of natural justice.

In Pengarah Kastam Negeri Johor & Anor v Kedai Makan Kebun Teh (Sutera Utama) Sdn Bhd & Ors and another appeal [2014] 4 MLJ 377, the Court of Appeal held that the existence of a statutory appeal procedure is a bar to judicial review. It held as follows: Again, with regard to the statutory remedy as contained under s 68 of the Sales Tax Act 1972 we are of the view that the position in such a case is rather trite. This court is guided by a slew of cases emanating from high authority such as Manggai v Government of Sarawak & Anor [1970] 2 MLJ 41, Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ 185, and Robin Tan Pang Heng @ Muhammad Rizal bin Abdullah (suing as public officer at Penang Turf Club) v Ketua Pengarah Sekerja Malaysia & Anor [2011] 2 MLJ 457; [2010] 9 CLJ 505. These cases have decided that where a statute has provided for a further internal remedy to an aggrieved party, then it would become incumbent that recourse must first be had to that grievance mechanism. In other words, the respondent is statutorily obliged to exhaust that remedy first before running, as it were, to the courts for what is essentially a discretionary relief. The apex court in the Robin Tan’s case was guided by what Lord Templeman had said in the Re Preston [1985] AC 835 to the following effect: Judicial review process should not be allowed to supplant the normal statutory appeal procedure. The respondent taxpayer had invited the court to do just the opposite of what was stated by Lord Templeman and with respect, such invitation ought not to be accepted by the court.

Finally, in a recent decision of the Court of Appeal in Ketua Pengarah Hasil Dalam Negeri v Jeffrey Florian and other appeals [2025] MLJU 831 it was held as follows: [66] Since the Respondents had exercised their rights to appeal under section 99 of the ITA 1967, the Respondents cannot now make a U-Turn to state that the filing of the judicial review was based on the question of law or even as an abundance of caution. Even if the Respondents claimed that it was a question of law, the Federal Court in Alcatel-Lucent (supra) has put in place the proper process for revenue matters to be dealt with by the parties i.e. either party to the proceedings before the Special Commissioners may appeal on a question of law against a deciding order or may request the Special Commissioners to state a case (generally known as case stated) for the opinion of the High Court. [67] The validity of otherwise of the impugned notice of assessment or the existence or otherwise of an error of law may be raised as an issue in the hearing of the Respondents’ appeal before the SCIT under Section 99 as extensive provisions have been enacted from Sub-Sections 99 to 102 and Schedule 5 to the ITA which establish adequate machinery for the disposal of the Respondents’ complaint by way of due process of law. … [70] The ITA has specifically provided comprehensive provisions on the right and procedure of appeal for the taxpayers to avail themselves to in the event they were aggrieved by the act of the Appellant. Parliament would not have enacted in vain without any real significance such comprehensive provisions on appeal. It is income tax legislation that allows any person aggrieved by an assessment to appeal before a body that is dedicated specifically to hear such appeals. It would indeed be an exercise in futility to create such a mechanism of appeal if it is not to be complied with.

The Applicants have attempted to proffer an explanation as to the course taken. Their Affidavit in Reply states that these judicial review proceedings include the 2nd Respondent as a party whose decision they are challenging. The 2nd Respondent’s decision is not the subject of the appeal under s. 39. As the decision of the Collector to impose Ad Valorem duty was consequent to the decision of the 2nd Respondent, this judicial review against both is intended to preserve the rights of the Applicants.

In my view, the decision of the 2nd Respondent not to allow an exemption is a separate matter from that of the 1st Respondent in imposing Ad Valorem duties. Having taken the course of action of an appeal by filing the Originating Summonses, the Applicants ought not to allow this Judicial Review proceedings to continue against the 1st Respondent. The merits of the Applicants’ case which hinges on the application of section 35 and paragraph 3 of the General Exemptions in the First Schedule, is a matter to be ventilated in the appeal.

The Applicants also contend that having as the Original Financing Documents were given an exemption, a legitimate expectation has arisen for a similar exemption for the Restructuring Documents. The same treatment ought to be accorded.

To my mind, the question of legitimate expectation does not arise as there is no evidence of a representation made to the Applicants to give rise to an expectation of an exemption on the Restructuring Documents. The law on the applicability of the doctrine of legitimate expectation is trite. (See: Pentadbir Tanah dan Daerah Petaling & Ors v Bandar Utama City Corp Sdn Bhd (previously known as Damansara Jaya Sdn Bhd) & Anor and another appeal [2021] 4 MLJ 689).

In any event, the issue of legitimate expectation is one to be advanced in the s. 39 appeal.

In the absence of any exceptional circumstances which the Applicants have to show, the present application against the 1st Respondent is therefore an abuse of the process of the court.

Premised on the above reasons, the judicial review application against both the Respondents in enclosure 21 is dismissed. I order that costs of RM 5,000.00 be paid to each of the Respondents. Dated: 6th April 2026 -sgd-Alice Loke Yee Ching Judge High Court Kuala Lumpur Counsel for Applicants: Pn. Dayang Roziekah Ussin Tetuan Azmi & Associates Counsel for 1st Respondent: Pn. Ashrina binti Ramzan Senior Revenue Council (Pn. Nik Amyrah Syarinie binti Mohd Dasuki and Pn. Siti Aisyah binti Yusof @ Md. Nasir, Revenue Council together with her) Lembaga Hasil Dalam Negeri Counsel for 2nd Respondent: