SURIA MEKAR SDN. BHD. v Jabatan Kastam Diraja Malaysia (KDRM) (MA-12GS-1-10/2025)

SURIA MEKAR SDN BHD (No. Syarikat: 200001010000/512606-W)

MOHD YAAKOP BIN MOHD DAUD (No. K/P:A2651455/731112-04-5211)

NOR FARIZAN BINTI MOHD DAUD (No. K/P:A3510109/761215-04-5318) ... PERAYU-PERAYU DAN KERAJAAN MALAYSIA ... RESPONDEN (Daripada keputusan Mahkamah Sesyen di Melaka Guaman Civil No. MA-51GS-3-07/2024 bertarikh 24 September 2025) GROUNDS OF JUDGMENT A. INTRODUCTION [1] This is the appeal of the First, Second and Third Appellants against the whole of the decision of the learned Sessions Court Judge at Melaka delivered on 24 September 2025, by which the learned Judge entered judgment for the Respondent in the sum of RM206,406.00, with interest at 5% per annum from the date of filing of the Saman until full settlement, and costs of RM10,555.00, and dismissed the Appellants' counterclaim for RM11,000.00. The Notice of Appeal was filed on 3 October 2025; the Memorandum of Appeal on 29 October 2025; and a Supplementary Memorandum of Appeal on 11 March 2026. [2] The dispute concerns liability for goods and services tax ("GST") under the Goods and Services Tax Act 2014 [Act 762] ("Act 762") in respect of slope-repair and ancillary works at Kolej Kemahiran Tinggi MARA, Rembau, Negeri Sembilan ("the Project"). The Project was awarded by Jabatan Kerja Raya Malaysia ("JKR") to Faracon Sdn Bhd ("Faracon") by Letter of Acceptance dated 17 March 2015. The First Appellant participated in the execution of the Project. The Respondent contends that the participation was that of a supplier of taxable services to Faracon, and that GST is therefore chargeable on the consideration received. The Appellants contend that the participation was that of a co-venturer in a joint venture with Faracon, and that no taxable supply between the First Appellant and Faracon arose. [3] The real controversy on appeal is not whether the doctrines invoked by the parties exist, but whether the learned Sessions Court Judge committed a plainly wrong error of fact or law in concluding, on the totality of the evidence, that the First Appellant supplied taxable services to Faracon for consideration within the meaning of section 9 read with section 4 of Act 762, and whether the consequential liability of the Second and Third Appellants under section 53 of Act 762 was correctly established. [4] The threshold issues, however, are doctrinally anterior. Even if the joint-venture characterisation were accepted, it is necessary to consider (i) the operation of section 11(3) of Act 762 on the time of supply; (ii) the irrelevance of the date of the Letter of Acceptance to chargeability; (iii) the requirement under section 56 of Act 762 of a written order published in the Gazette to confer exemption; and (iv) the evidentiary effect under section 46(4) of Act 762 of the Certificate of Debt produced by the Director General. These together frame the boundaries of any joint-venture submission. [5] A further and separate question arises on the counterclaim. The Appellants pleaded restitution of RM11,000.00 paid to the Respondent, on the basis that the sum was paid as security to release the Second and Third Appellants from immigration restriction and not in discharge of any tax liability. The Respondent took the prior, jurisdictional objection that no counterclaim or set-off lies against the Government in proceedings for the recovery of taxes save with the leave of the Court under section 42(2)(e)(i) of the Government Proceedings Act 1956 [Act 359] and Order 73 rule 4 of the Rules of Court 2012. [6] Those, in summary, are the matters that fall for determination. The shape of the appeal therefore turns on the proper application of the appellate threshold for intervention with findings of fact and on the disciplined application of Act 762 to the documentary and oral record. B. MATERIAL FACTS AND PROCEDURAL HISTORY [7] The First Appellant is a company incorporated under the Companies Act 1965 (now the Companies Act 2016) carrying on business as a general contractor and general trader. It was registered as a taxable person under Part IV of Act 762, with GST registration No. 001309990912, with effect from 1 April 2015 the date Act 762 came into operation. The Second and Third Appellants are or were at material times directors of the First Appellant. The Second Appellant was a director throughout. The Third Appellant ceased to be a director on 13 July 2020 according to the SSM Notification of Change in the Register of Directors (Record of Appeal Volume II, page 16); the pleadings state 17 July 2020, but the SSM record is not in dispute on this appeal. [8] The Project was advertised by JKR. By Letter of Acceptance dated 17 March 2015, JKR awarded the Project to Faracon for a tender sum of RM3,391,980.00. The site possession date was fixed at 30 March 2015. The completion date was originally fixed at 13 March 2016. These dates appear from the Letter of Acceptance, which is undisputed. [9] By a letter dated 20 March 2015 (exhibit D35; Rekod Rayuan Volume 2, page 138), the director of Faracon, En. Mohd Rasit bin Saleh, wrote to the Second Appellant. The text records an agreement between Faracon and the First Appellant to undertake the Project together. The phrase used in the letter is "secara kerjasama" — translated as "in cooperation" or "by way of cooperation". It is from this letter that the Appellants' joint-venture case is principally drawn. [10] A current account at Maybank, Cawangan Alor Gajah, with account number 5040 4941 0821 (exhibit D34), was operated. The Second Appellant gave evidence that the parties agreed to use the account for the project's financial transactions. The account opening documents tendered through the Maybank officer SD3 (En. Shazzly) establish, however, that the account is in the sole name of Faracon Sdn Bhd, and was opened on 7 July 2008 — some seven years before the Project. The Second Appellant was added as a second authorised signatory. The Director of Faracon (Mohd Rasit) was the primary signatory. [11] Following commencement of works after 1 April 2015, payments were made by JKR to Faracon. Faracon in turn made payments to the First Appellant. The First Appellant entered the payments received in its own General Ledger maintained on the UBS accounting system. The audit officer of the Respondent, Puan Suhaila binti Ahmad (SP3), identified the income entries during her audit. [12] Under section 41 of Act 762, the First Appellant was required, as a registered person, to furnish a return (Penyata GST-03) in respect of each taxable period and to account for output tax on its taxable supplies. The First Appellant filed quarterly returns. The audit conducted by SP3 between 20 June 2018 and 31 July 2018 examined the taxable periods from 1 April 2015 to 31 December 2017. SP3 concluded that the First Appellant had under-declared output tax in the sum of RM213,399.48 and had over-claimed input tax in the sum of RM3,952.49, yielding a net additional tax of RM217,351.97. [13] A Bill of Demand (No. L0381249600) was issued to the First Appellant on 15 August 2018 in the sum of RM217,351.97. No payment was made. Two further payments of RM1,000.00 and RM10,000.00 (totalling RM11,000.00) were made by the Appellants on dates not now in dispute. A Bill of Demand for further late-payment penalty in the sum of RM189.11 was issued on 4 April 2024. After credit for the RM11,000.00, the balance claimed was RM206,406.00. A Certificate of Debt under section 46(4) of Act 762 ("the Certificate of Debt") was signed by the State Deputy Director of Customs on behalf of the Director General on 2 May 2024. [14] The Respondent commenced proceedings against the Appellants in the Sessions Court at Melaka on 30 July 2024 to recover the sum as a civil debt under section 46(1) of Act 762. The Second and Third Appellants were joined under section 53(1) of Act 762, which renders the directors of a company jointly and severally liable for GST due and payable by the company. The Appellants filed a Defence and Counterclaim on 9 September 2024. The pleaded defence is that the works were performed by joint venture and not subcontract; that no taxable supply between the First Appellant and Faracon arose; and that the RM11,000.00 paid was a security deposit, not tax. [15] The trial was heard before the learned Sessions Court Judge, YA Puan Haderiah binti Siri, on 23 June 2025, 24 June 2025, 25 June 2025, 26 June 2025 and 24 July 2025. The Respondent called the following witnesses: SP1 (Bakri bin Abd. Rahman, Deputy Director, Enforcement and Compliance, JKDM Melaka, certifying officer for the Certificate of Debt); SP2 (Normah binti Md Yusuf, Head of Audit, who directed the audit); SP3 (Suhaila binti Ahmad, the audit officer); SP4 (Zanariah binti Mohamad Zin, Investigating Officer for the parallel late-payment penalty file) and SP5 (Muhammad Nasri bin Ismail, the auditor from MNZ Waja Associates). The Respondent also called En. Hafiz, the accountant who managed the First Appellant's UBS accounting system. The Appellants called three witnesses: SD1 (Mohd Rasit bin Saleh director of Faracon); SD2 (the Second Appellant); and SD3 (En. Shazzly, the Maybank officer). [16] By Judgment delivered on 24 September 2025, with written Grounds (Alasan Penghakiman) issued on 24 October 2025, the learned Sessions Court Judge allowed the Respondent's claim in the sum of RM206,406.00, with interest at 5% per annum from the date of filing of the Saman until full settlement, together with costs of RM10,555.00. The counterclaim was dismissed. [17] Twelve grounds appear in the original Memorandum of Appeal dated 29 October 2025, and a further six in the Supplementary Memorandum of Appeal dated 11 March 2026. They reduce, on analysis, to four substantive complaints: first, that the learned Judge erred in characterising the relationship between the First Appellant and Faracon as a subcontract; secondly, that the learned Judge erred in holding that the absence of a Ministerial exemption certificate under section 56 of Act 762 was determinative; thirdly, that the learned Judge insufficiently appreciated the evidence and made bare findings on key matters; and fourthly, that the learned Judge erred in dismissing the counterclaim. C. ISSUES FOR DETERMINATION [18] Stripped of overlapping iterations in the two memoranda, the following issues fall to be decided:

Whether the learned Sessions Court Judge committed a plainly wrong error in characterising the relationship between the First Appellant and Faracon as one of subcontract rather than joint venture; and whether, on the totality of the evidence, the conclusion that the First Appellant supplied taxable services for consideration within section 9 of Act 762 was open to the learned Judge.

Whether, on a proper construction of sections 9,11(3) and 56 of Act 762, the absence of a written order made by the Minister under section 56 and published in the Gazette is fatal to any defence of GST exemption, irrespective of the characterisation of the underlying commercial relationship.

Whether the Certificate of Debt dated 2 May 2024, produced under section 46(4) of Act 762, is conclusive evidence of the making of the assessment and sufficient authority for judgment, and whether collateral challenge to the merits of the assessment is open in proceedings for civil debt recovery under section 46(1).

Whether the counterclaim for RM11,000.00 is maintainable, having regard to the statutory bar in section 42(2)(e)(i) of the Government Proceedings Act 1956 read with Order 73 rule 4 of the Rules of Court 2012; and, if maintainable, whether the dismissal on the merits was justified on the evidence. D. APPELLATE THRESHOLD AND STATUTORY FRAMEWORK

The threshold for appellate intervention [19] This is a rehearing on documents. The principle governing the threshold for appellate intervention with findings of fact made by a trial court is well settled. In Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 2 MLRA 1; [2004] 4 CLJ 309, the Federal Court restated the function of an appellate court in these terms. A finding of the trial court will not be disturbed unless the appellate court is satisfied that it is plainly wrong, in the sense that the trial court has misdirected itself in law or has reached its conclusion without judicial appreciation of the evidence. The expression "insufficient judicial appreciation of evidence" is directed at the process of evaluation the assessing, weighing, and reasoned acceptance or rejection of the material before the court and a decision arrived at without that process may be set aside on appeal. [20] That formulation was reaffirmed in UEM Group Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785, where the Federal Court confirmed that an appellate court will not, generally speaking, intervene with the decision of a trial court unless it is shown to be plainly wrong in arriving at that decision, and that a decision is plainly wrong where the trial court is guilty of no, or insufficient, judicial appreciation of the evidence. [21] More recently, in Merita Merchant Bank Singapore Ltd v Dewan Bahasa dan Pustaka [2015] 1 MLRA 1, the Federal Court applied the same threshold to the converse situation, holding that where there has in truth been insufficient judicial appreciation of the pleadings and of the contemporaneous documentary record, the appellate court is not merely entitled but bound to intervene and to correct the resulting error. [22] Where, however, the trial court has failed to address material evidence or has made "bare findings of fact" unsupported by reasoning or evidence, appellate intervention is not only permissible but obligatory. So much was held in MMC Oil & Gas Engineering Sdn Bhd v Tan Bock Kwee & Sons Sdn Bhd [2016] 3 MLRA 144; [2016] 2 MLJ 428; [2016] 4 CLJ 665, in which the Court of Appeal held that a first-instance judgment is open to challenge where it fails to address, or wholly ignores, material evidence or issues placed before the court, or where bare findings of fact are made with no supporting reasoning or evidence; in such a case the appellate court must itself review the evidence afresh.

(ii) The statutory architecture of Act 762 [23] The relevant provisions of Act 762, so far as material to this appeal, are sections 4,9,11,41,43,46,53 and 56. They form an integrated scheme. Section 4 defines "supply" to mean all forms of supply, including importation of services, done for a consideration, and provides that anything which is not a supply of goods but is done for a consideration is a supply of services. Section 9 imposes GST on (a) any supply of goods or services made in Malaysia, and (b) any importation of goods, subject to the exceptions in subsections (2) and (3). Section 9(2) makes the tax chargeable on any supply made in Malaysia if it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him. Section 9(3) makes the tax due and payable at the time of supply by the person making the supply. [24] Section 11 governs the time of supply. Section 11(3), which is the provision invoked by the Respondent, provides that " [s]ubject to subsections (4), (5), (6) and (8), the time of supply of services shall be at the time the services are performed". The time of supply is therefore tethered to the moment of performance, not to the moment of contract. [25] Section 41 imposes the obligation to furnish a return for each taxable period. Section 43, which is the provision under which the impugned assessment was raised, empowers the Director General to assess to the best of his judgement the amount of tax due and payable from a taxable person who fails to apply for registration, fails to furnish a return, or furnishes a return which appears to the Director General to be incomplete or incorrect. [26] Section 46 governs recovery of tax as a civil debt. Section 46(1) provides that tax due and payable, penalty, surcharge, fee or other money payable under the Act may be recovered by the Minister as a civil debt due to the Government. Section 46(4) is of central importance for the present appeal. It provides: "In any proceedings to recover the tax, penalty, surcharge, fee or other money under subsection (1), the production of a certificate signed by the Director General that any tax, penalty, surcharge, fee or other money and the amount shown thereof as due in any return, assessment or notice made under this Act from a person named therein and giving the address of the person and purporting to be a copy of or an extract from any notice of assessment shall be conclusive evidence of the making of the assessment and shall be sufficient authority for the court to give judgement for that amount." [27] Section 56(1) confers the exemption power on the Minister. It provides that the Minister "may, by order in the Gazette and subject to any conditions as he deems fit to impose, relieve any person or class of persons from the payment of the whole or any part of the tax which may be charged and levied on any taxable supply of goods or services or any importation of goods or class of goods". Section 56(2) provides that any order made under subsection (1) shall be laid before the Dewan Rakyat. The exemption power is therefore confined to the Minister, exercised by Gazette order, with parliamentary tabling. No officer of any other department or agency including JKR possesses any statutory authority to grant GST exemption. [28] Section 53 governs liability of company directors. Section 53(1) provides that where any tax, penalty, surcharge, fee or other money is due and payable under Act 762 by a company, the directors of the company shall, together with the company, be jointly and severally liable for that sum. That provision gives effect to a settled legislative policy of imposing personal liability on those who control taxable companies.

(iii) The Government Proceedings Act and counterclaims [29] Section 42(2)(e)(i) of the Government Proceedings Act 1956 [Act 359] requires the Rules of Court to provide that "a person shall not be entitled to avail himself of any set-off or counterclaim in any proceedings by the Government for the recovery of taxes, duties or penalties, or to avail himself in proceedings of any other nature by the Government of any setoff or counterclaim arising out of a right or claim to repayment in respect of any taxes, duties or penalties". [30] That requirement is given effect in the present rules by Order 73 rule 4 of the Rules of Court 2012, which provides that, notwithstanding Order 15 rule 2 and Order 18 rules 17 and 18, a person may not in any proceedings by the Government make any counterclaim or plead a set-off if the proceedings are for the recovery of, or the counterclaim or set-off arises out of a right or claim to repayment in respect of, any taxes, duties or penalties. Order 73 rule 4(2) further provides that no counterclaim may be made or set-off pleaded without the leave of the Court in proceedings against the Government, in the circumstances there set out. [31] The combined effect of these provisions has been considered in Government of Malaysia v Dato' Mahindar Singh [1996] 5 MLJ 626 (High Court), in which Arifin Zakaria J (as he then was) struck out a counterclaim brought against the Government, holding that a claim which in substance seeks repayment in respect of taxes, duties or penalties falls squarely within the predecessor of Order 73 rule 4, and may not be pursued by way of counterclaim or set-off without the leave of the court. E. ANALYSIS AND DETERMINATION

Issue (a) - The characterisation question [32] The first and most substantial complaint on appeal is that the learned Sessions Court Judge erred in characterising the relationship between the First Appellant and Faracon as one of subcontract, and not as a joint venture. The complaint is articulated in nine of the eighteen grounds of appeal (Memorandum of Appeal grounds 2 to 6 and 8; Supplementary Memorandum of Appeal grounds 2, 3 and 4). It is the core of the Appellants' case. [33] Three propositions are advanced. First, that the letter from Faracon to the First Appellant dated 20 March 2015 (exhibit D35) records an agreement to undertake the Project "secara kerjasama" by way of cooperation and not on a subcontract footing. Secondly, that during the crossexamination of SP3 at the Notes of Evidence (Rekod Rayuan Tambahan) at pages 119 to 121, SP3 conceded that, on the kerjasama footing, there would be no taxable supply between the First Appellant and Faracon. Thirdly, that the operation of the Maybank account at Cawangan Alor Gajah with two signatories one from each company bespoke a joint venture rather than a subcontract. [34] The starting point is that the characterisation of a commercial arrangement is a question of mixed fact and law, the factual component of which lies preeminently within the province of the trial court. Whether parties have entered into a joint venture or a subcontract turns on the totality of their dealings, including the documentary record, the conduct of the parties, and the surrounding circumstances. The trial judge enjoys the audiovisual advantage. Appellate intervention is to be measured against the high threshold articulated in Gan Yook Chin and UEM Group (above). The question is not whether this Court, were it exercising an original jurisdiction, might have characterised the relationship differently, but whether the learned Sessions Court Judge was plainly wrong, in the sense that no tribunal properly appreciating the evidence could have characterised it as she did. [35] Common-law principles inform the characterisation. A joint venture in the legal sense, as distinct from the loose commercial use of that expression, requires several elements: a joint contribution of property, money, effort or skill to a common undertaking; a shared interest in the subject matter of the venture; mutual agency; a sharing of both profits and losses; and a community of interest in the performance of the undertaking. The locus classicus in Commonwealth jurisprudence is United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; 60 ALR 741; [1985] HCA 49 (High Court of Australia), in which Mason, Brennan and Deane JJ observed that "joint venture" is not a term of art with a settled common-law meaning, but bears its ordinary-language meaning of an association of persons for a particular commercial undertaking entered into with a view to mutual profit, each usually contributing money, property or skill. Whether an arrangement amounts to a joint venture in law is therefore a question of substance, to be answered from the incidents of the parties' relationship, and not from the label they have chosen to attach to it. [36] Against that doctrinal background, the evidence on which the learned Sessions Court Judge made her findings requires careful examination. [37] First, the Letter of Acceptance dated 17 March 2015. The Letter was issued by JKR. The contracting party named is Faracon. The First Appellant is not named, anywhere, in the Letter of Acceptance. No subsequent documentation from JKR identifies the First Appellant as a co-contractor. The Project, in contractual terms, is and remains Faracon's project. [38] Secondly, the letter dated 20 March 2015 (exhibit D35) from Mohd Rasit (Faracon) to the Second Appellant. The Appellants place principal reliance on this document. The word "kerjasama" is, however, an inherently ambiguous expression in commercial usage. It can mean cooperation in a loose, working sense; or it can describe a joint venture in the technical sense. The word itself cannot bear the doctrinal weight the Appellants seek to place upon it. Characterisation depends not on the label adopted in private correspondence, but on the substance of the relationship as disclosed by all the evidence. [39] Thirdly, the bank account. The undisputed evidence from SD3, the Maybank officer, is that the account was opened on 7 July 2008, some seven years before the Project was awarded; that it is in the sole name of Faracon Sdn Bhd; and that the Second Appellant was added as a second authorised signatory. That is not the profile of a joint-venture account. A genuine joint-venture financial vehicle would, ordinarily, be a project-specific account, opened contemporaneously with the venture, and styled in the joint names of the venturers. The mere addition of a second signatory to a pre-existing company account is consistent with operational convenience, not with the legal apparatus of a joint venture. [40] Fourthly, the absence of joint-venture documentation. The Second Appellant did not produce any written joint-venture agreement, profit-sharing formula, loss-sharing arrangement, allocation of risk, mutual agency clause, or formula for periodic accounting. The documentary record contained no such formal agreement. The Second Appellant's own account of how the parties dealt was that payments were determined on an ad hoc basis: 'Kalau dia nak guna duit dulu, saya ada tolak berapa dia ambil. Saya buat kira-kira macam itulah. Tak ada surat, tak ada apa.' (Notes of Evidence, Rekod Rayuan Tambahan, p. 115). That is, the Second Appellant's own account of how the parties dealt: when Faracon needed money first, the amount paid to the First Appellant was reduced correspondingly, in an entirely informal manner. None of the orthodox indicia of a joint venture in the legal sense was present. [41] Fifthly, the income flow. The undisputed evidence is that JKR paid Faracon; Faracon paid the First Appellant; the First Appellant did not receive payment directly from JKR. In a joint venture properly so called, the venturers would ordinarily share in the proceeds from the principal as a matter of right under a joint-venture agreement; here, the First Appellant's entitlement derived entirely from Faracon. That pattern is more consistent with a subcontracting arrangement than with a joint venture. [42] Sixthly, the First Appellant's own contemporaneous statement. By a letter found at page 12 of Bundle C, authored by the First Appellant itself, it is recorded that: "Kami juga telah dimaklumkan oleh pihak Faracon Sdn Bhd bahawa projek tersebut mendapat pengecualian GST daripada Kerajaan. Oleh itu, segala tuntutan pihak kami kepada pihak Faracon adalah tidak termasuk GST." [43] Translated: "We were also informed by Faracon Sdn Bhd that the said Project enjoys GST exemption from the Government. As such, all our claims to Faracon were not inclusive of GST." Two features of this statement are decisive. First, the First Appellant describes itself as having made "tuntutan" claims against Faracon. That is the language of a supplier dealing with a recipient, not of a co-venturer in a joint enterprise. Secondly, the reason the claims "did not include GST" is given not as the absence of any taxable supply, but as the supposed exemption of the Project from GST. The letter is evidence consistent with the First Appellant having made claims to Faracon, and indicates that the reason GST was not included was the First Appellant's belief (whether mistaken or not) that the Project enjoyed an exemption. The letter does not, however, expressly admit that the supplies were taxable under Act 762; that characterisation remains a legal conclusion to be drawn from the totality of the evidence. [44] Against this body of evidence, the Appellants advance the cross-examination concession of SP3. The exchange, on its face, appears favourable. SP3 agreed, on the kerjasama footing, that there would be no supply of services from the First Appellant to Faracon, but instead a supply of services by Faracon together with the First Appellant to JKR. Cross-examination, however, is rarely the end of the matter. On re-examination (Notes of Evidence at the relevant pages of Rekod Rayuan Tambahan, immediately following the cross-examination), SP3 explained that, even on a kerjasama footing, the works were in fact performed by the First Appellant; that the income from those works was credited to the First Appellant's accounts; and that the audit was directed to the substance of the transactions in the First Appellant's books not to the characterisation of the underlying relationship at common law. SP3 explained that the audit was a documentary exercise built on the First Appellant's own General Ledger entries, and that the documentary basis remained valid irrespective of how the upstream relationship between the First Appellant and Faracon was labelled. [45] The choice between the cross-examination concession and the re-examination qualification was preeminently a matter for the trial court. The learned Sessions Court Judge was entitled, on the audio-visual advantage, to weigh the two, and to prefer the documentary record the General Ledger, the Bill of Demand, and most importantly the First Appellant's own letter at Bundle C page 12 over a witness's answer under cross-examination, which was conditional and qualified on reexamination. There is no warrant to disturb that preference. [46] The Appellants further invoke the doctrine of approbate and reprobate. The argument is that the Respondent, having permitted SP3 to concede in cross-examination, cannot now adopt an inconsistent position. The doctrine relied upon, as articulated by the Court of Appeal in Cheah Theam Kheng v City Centre Sdn Bhd & Other Appeals [2012] 2 MLRA 125; [2012] 1 MLJ 761; [2012] 2 CLJ 16, is that a party may not approbate and reprobate — may not blow hot and cold by adopting two inconsistent positions to suit the exigencies of its case. The doctrine does not assist the Appellants, for three reasons. First, it governs a party's election between inconsistent positions of its own; it does not operate to convert an opposing witness's answer under cross-examination into a binding position of the party who called that witness, still less into an estoppel against the Government in the assessment and collection of tax. Secondly, the position maintained by the Respondent has been consistent throughout: that the First Appellant, as a registered person, supplied taxable services for consideration, that supply being evidenced by its own General Ledger and by its own letter at Bundle C page 12. Thirdly, the answer of SP3 now relied upon was conditional directed to the hypothesis of a kerjasama footing and was qualified in re-examination; an equivocal and conditional answer is not the clear and unequivocal adoption of a position to which the doctrine of approbate and reprobate could attach. [47] On the totality of the documentary and oral record, the conclusion that the relationship between the First Appellant and Faracon bore the substance of a supply of services for consideration (regardless of the labels used in private correspondence) was a conclusion reasonably open to the learned Sessions Court Judge. The threshold for appellate intervention articulated in Gan Yook Chin and UEM Group is therefore not crossed. The learned Sessions Court Judge neither misdirected herself in law nor failed to appreciate the evidence; her conclusion on the characterisation question was one reasonably open to her on the General Ledger entries, the Bill of Demand, the Certificate of Debt, and the First Appellant's own contemporaneous letter. Ground (a) fails. [48] The Appellants' second principal argument shifts the legal ground. Even if a taxable supply existed, it is said that the Project enjoyed GST exemption. The exemption is variously attributed to: (a) the date of the Letter of Acceptance, 17 March 2015, which preceded the coming into force of Act 762 on 1 April 2015; (b) a letter from a JKR officer (IDD5), dated 22 November 2019, addressed to Faracon, stating that the Project was not subject to GST; and (c) the absence of any prosecution or recovery action against Faracon. [49] None of these grounds is sound. [50] First, the date of the Letter of Acceptance. The time of supply is fixed by section 11(3) of Act 762, which provides that the time of supply of services is at the time the services are performed. The works under the Project were not performed before 1 April 2015. Site possession was on 30 March 2015 (a Monday). Works were performed from April 2015 until at least the contractual completion date of 13 March 2016, and the audit examined payments and returns for taxable periods up to 31 December 2017.The time of supply, in respect of every work-package performed after 1 April 2015, fell within the operation of Act 762. The date of the Letter of Acceptance is, on this point, immaterial. The principle was applied in AgroMod Industries Sdn Bhd v Tribunal Rayuan Cukai Barang dan Perkhidmatan & Anor [2019] MLJU 1789 (High Court), in which it was held that, where the supply is completed after the coming into operation of Act 762, GST is chargeable upon it notwithstanding that the underlying agreement was concluded before the appointed date; it is the time of supply fixed by the Act, and not the date of the contract, that governs chargeability. [51] Secondly, the JKR letter. Section 56(1) of Act 762 confers the exemption power on the Minister, exercisable by order in the Gazette, subject to parliamentary tabling under section 56(2). No Gazette order was tendered. No Ministerial certificate was tendered. The letter from JKR (IDD5), even if admissible, cannot displace the requirement of a Gazette order. JKR is a department of the Government but it is not the Minister; its officers have no statutory authority under Act 762 to grant exemption. Whatever may have been written, or said, in IDD5 by a JKR officer, the statement is administratively irrelevant for GST purposes. As the High Court observed in Dyson Manufacturing Sdn Bhd v Ketua Pengarah Kastam [2024] CLJU 546, in a taxing statute one looks to what is clearly said, with nothing to be read in and nothing to be implied. An exemption from tax can be conferred only in the manner the statute prescribes — here, by order of the Minister published in the Gazette under section 56 — and cannot be brought into existence by a representation, however expressed, emanating from a body that holds no statutory power to grant it. Thirdly, the question of admissibility. The Appellants complained at trial that the learned Sessions Court Judge erred in refusing to mark IDD5 as an exhibit, on the ground that its maker (the JKR officer concerned) was not called to verify it. They invoke section 35 of the Evidence Act 1950 (entry in public records) and section 74 (definition of public documents). It is unnecessary to resolve the admissibility question on this appeal, for the simple reason that, even if IDD5 had been admitted, it would not have created any exemption under section 56 of Act 762. IDD5 was authored by a JKR officer who lacked the statutory authority to grant GST exemption. Its content is, on this point, immaterial. The principle in Dyson Manufacturing (above) is dispositive: the admission of a document into evidence cannot endow it with a legal operation that the statute withholds from it. Even had IDD5 been received, it could not in law have created an exemption under section 56 of Act 762, and its exclusion therefore occasioned no injustice to the Appellants. That said, the document might still have had some evidential relevance to the Appellants' state of mind or to their defence narrative; however, its exclusion on the ground that its maker was not called as a witness was a permissible exercise of the trial judge's discretion, and no miscarriage of justice has been shown. [53] Fourthly, the absence of action against Faracon. The argument has no statutory foundation. The Director General is empowered under section 43 of Act 762 to assess the tax due and payable from "any taxable person" in the specified circumstances. The First Appellant was a taxable person. The audit revealed under-declaration of output tax and over-claim of input tax in its own returns. The Director General's discretion to proceed against the First Appellant is not contingent on parallel proceedings against another party. Selectivity in enforcement is a function of administrative practice, not a precondition to validity. Whether Faracon is or is not separately liable is, in this appeal, an irrelevance. [54] On the burden of proof. Section 101 of the Evidence Act 1950 places the burden of proving the existence of any fact essential to a legal right on the party asserting it. Where the Respondent has produced the Certificate of Debt and the audit findings establishing a prima facie liability under section 43, the evidential burden shifts to the taxpayer to displace the assessment by producing the documentary evidence of exemption. That principle is reflected in Lethumanan Chettiar Alagappan (as Executor to SL Alameloo Achi, Deceased) & Anor v Secure Plantation Sdn Bhd [2017] 5 CLJ 418, in which the Federal Court explained that, although the legal burden rests throughout on the party asserting a right, the evidential onus shifts in the course of the trial: once that party has adduced evidence establishing a prima facie case, the onus passes to the opposing party to adduce evidence in rebuttal. The Respondent having established a prima facie liability through the audit findings and the Certificate of Debt, the onus lay on the Appellants to prove the exemption asserted; no order of the Minister under section 56 having been produced, that onus was not discharged.

(iii) Issue (c) — The conclusive evidence effect of the Certificate of Debt [55] The Respondent's claim was founded on a Certificate of Debt issued under section 46(4) of Act 762. The statute is express: production of the Certificate of Debt is "conclusive evidence of the making of the assessment" and "sufficient authority for the court to give judgement for that amount". [56] The expression "conclusive evidence" is a term of art in revenue legislation. It excludes contradiction in the court that gives judgement. In Kerajaan Malaysia v Kumpulan Liziz Sdn Bhd & Ors [2021] 5 CLJ 510 (High Court), a certificate signed by the Director General was treated as evidence of the sums stated, sufficient to found judgment in the absence of material displacing the certificate itself. The position was put more firmly by the Court of Appeal in Ketua Pengarah Kastam v Howe Keat Sdn Bhd [2025] CLJU 3807, in relation to the analogous certificate under section 22A of the Customs Act 1967: such a certificate is admissible as sufficient evidence of the facts stated, the Director General is not required to give evidence to substantiate it, and a taxpayer who wishes to challenge the facts certified must apply to the court to that end, failing which the certificate stands. The same reasoning attends section 46(4) of Act 762. [57] The proper avenue for challenge to the merits of an assessment under Act 762 is the administrative-review route: an application to the Director General under section 124; appeal to the GST Appeal Tribunal (formerly under sections 125 to 141); and, ultimately, judicial review at the High Court. The Appellants did not pursue any of those avenues. Once the matter has arrived at civil debt recovery under section 46(1), a direct collateral attack on the merits of the assessment is not open in the absence of a challenge to the certificate itself on grounds such as fraud or manifest error apparent on its face. The Certificate of Debt is, by force of section 46(4), conclusive evidence of the making of the assessment, not necessarily of every underlying factual assumption. [58] It follows that the Respondent's case, viewed strictly through the lens of section 46(4), did not require extensive additional evidence to establish the fact and amount of the assessment, although the Respondent in fact adduced further evidence. The fact that the Respondent additionally called four witnesses, and produced an extensive audit trail, fortified rather than weakened the case. The trial proceeded on substance; the dispositive evidentiary foundation was the Certificate of Debt itself.

(iv) Issue (d) — The counterclaim for RM11,000.00 [59] The Appellants pleaded a counterclaim in the sum of RM11,000.00, alleged to have been paid as security for the release of immigration restrictions imposed on the Second and Third Appellants, and not as part of any tax discharge. Two distinct objections arise: a jurisdictional objection, and a factual objection. [60] Section 42(2)(e)(i) of the Government Proceedings Act 1956 expressly excludes set-off and counterclaim in proceedings by the Government for the recovery of taxes. Order 73 rule 4 of the Rules of Court 2012 gives effect to the statutory direction. The combined operation is mandatory: no counterclaim or set-off may be made against the Government in tax recovery proceedings, save with leave of the Court under Order 73 rule 4(3), on a notice of application. [61] In Dato' Mahindar Singh (above), the High Court struck out a counterclaim brought against the Government for the repayment of moneys connected with a tax liability, holding that such a claim fell squarely within the prohibition then expressed in Order 73 rule 4 of the Rules of the High Court 1980 and in section 42(2)(e)(i) of the Government Proceedings Act 1956, and that it could not be maintained without leave, which had been neither sought nor obtained. [62] The Appellants seek to distinguish Dato' Mahindar Singh on the footing that it concerned income tax, arose under a different statute, and was decided on an application to strike out rather than after trial. The distinction is immaterial. The prohibition does not turn on the species of tax: section 42(2)(e)(i) of the Government Proceedings Act 1956 and Order 73 rule 4 of the Rules of Court 2012 are expressed in terms of "taxes, duties or penalties" generally, and GST is plainly within that description. Nor does the procedural posture assist the Appellants: a counterclaim that is barred by the rule is barred whether the bar is raised at the striking-out stage or at trial. The substance of the present counterclaim is a claim to repayment of the RM11,000.00 paid to the Respondent in connection with the tax and penalty; characterising that claim as restitution for unjust enrichment does not alter its substance, and the re-labelling cannot circumvent a prohibition that is itself directed at the substance of the claim to repayment. No leave under Order 73 rule 4 was sought. The counterclaim was, accordingly, incompetent. [63] Were it necessary to reach the factual objection, the position is no better for the Appellants. The receipts produced (Record of Appeal (Volume II), pages 134 and 136) describe the transaction as "Pembayaran Bil" --- Bill Payment. Those receipts are contemporaneously generated documents and were produced by the Respondent's witness, SP4, who testified that the payments were made on account of the outstanding tax liability (Notes of Evidence, Rekod Rayuan Tambahan, p. 147-148, 151-152). The Appellants' assertion that the payments constituted a mere "security" deposit is supported only by the bare oral assertion of the Second Appellant, with no contemporaneous documentary evidence of any alleged "security" arrangement. The official whom the Second Appellant identified as having required the security (Tuan Jalil, of the Putrajaya headquarters) was not called as a witness. The drawing of the inference adverse to the Appellants under section 114(g) of the Evidence Act 1950 is unobjectionable on these facts. [64] Section 49 of Act 762 provides for the recovery of tax from persons leaving Malaysia. Where the Director General has reason to believe that any person is about or likely to leave Malaysia without paying any tax due and payable, any penalty payable, any surcharge accruing, any fee payable, or any other money recoverable from him under the Act, the Director General may issue to any Director of Immigration a notice requesting that the person be prevented from leaving Malaysia. The Appellants' own account places them within the scope of section 49: they were on the brink of departure (for umrah and to Australia); they had outstanding tax assessed against the First Appellant; they paid RM11,000.00 in two tranches; and they were thereafter permitted to depart. On their own evidence, that payment is in substance a payment on account of the underlying tax claim, not an extraneous deposit. [65] The counterclaim accordingly fails both jurisdictionally and on the merits. The learned Sessions Court Judge committed no error in dismissing it.

Issue arising - directors' liability under section 53 [66] A subsidiary question concerns the liability of the Second and Third Appellants. Section 53(1) of Act 762 makes the directors of a company jointly and severally liable, together with the company, for any tax, penalty, surcharge, fee or other money due and payable under the Act. The Second Appellant was a director throughout the audit period (April 2015 to December 2017). His liability is clear. [67] The Third Appellant resigned as a director on 17 July 2020. Her liability, by force of section 53(1), is for the tax which fell due and payable during the period of her directorship. The taxable periods in question all preceded her resignation. The Certificate of Debt was signed on 2 May 2024, after her resignation, but the liability had crystallised by the latest in December 2017. Her resignation does not extinguish liability accrued during her tenure. The point was not seriously pursued at trial and is in any event misconceived. The principle that directors' liability under tax-recovery provisions attaches by reference to the period during which the tax falls due is, in any event, a matter of statutory construction rather than of authority: section 53(1) of Act 762 fixes liability on those who are directors at the time the tax becomes due and payable. The tax in question having become due and payable during the Third Appellant's tenure, her subsequent resignation does not displace the liability that had by then accrued.

(vi) The complaint of insufficient judicial appreciation [68] The Appellants invoked the formulation in Gan Yook Chin (above), contending that the learned Sessions Court Judge was guilty of insufficient judicial appreciation of the evidence, in that she made bare findings and failed to engage with the testimony of SD1, SD2 and SD3 and with exhibits D34 and D35. The complaint, examined against the Alasan Penghakiman, is not made out. [69] The learned Judge in her Alasan Penghakiman addressed each of the substantive defences: (i) the joint-venture characterisation; (ii) the exemption argument; (iii) the documentary basis of the assessment; and (iv) the counterclaim. Her reasoning was supported by reference to the General Ledger entries, the Bill of Demand, the Certificate of Debt, and the First Appellant's own letter at Bundle C page 12. The credibility findings on SP3, the audit officer, were grounded in the audio-visual advantage. The reasoning is not "bald" in the sense criticised in MMC Oil & Gas Engineering Sdn Bhd v Tan Bock Kwee & Sons Sdn Bhd (above): it is reasoned, anchored in the documentary record, and directed to each live issue. The evidence of SD1, SD2 and SD3 and exhibits D34 and D35 were not ignored but weighed and found insufficient to displace the First Appellant's own General Ledger and contemporaneous letter. The complaint of insufficient judicial appreciation accordingly fails. [70] It is to be observed, finally, that an appellate court will not embark on a roving re-examination of the evidence merely because the appellants are dissatisfied with the result. The discipline of appellate restraint is not a courtesy; it is a structural feature of the civil justice system, designed to ensure that the trial court's primary role in fact-finding is respected save where genuine error is demonstrated. No such error is shown on this appeal. F. CONCLUSION [71] Pulling the strands of analysis together: the Appellants have not demonstrated that the learned Sessions Court Judge committed a plainly wrong error of fact or law in concluding that the First Appellant supplied taxable services for consideration, that the supply was chargeable to GST, that the absence of any Ministerial exemption under section 56 of Act 762 left the chargeability undisturbed, and that the Certificate of Debt produced under section 46(4) of Act 762 sufficed to support judgment for the sum claimed. The Second and Third Appellants' joint and several liability follows from section 53(1) of Act 762. The counterclaim is barred by section 42(2)(e)(i) of the Government Proceedings Act 1956 read with Order 73 rule 4 of the Rules of Court 2012, and is, in any event, without merit on the documentary record. [72] There is, accordingly, no proper basis for appellate intervention. G. ORDERS [73] The appeal is dismissed. [74] The judgment of the learned Sessions Court Judge dated 24 September 2025 is affirmed. [75] The Appellants shall pay the Respondent costs of this appeal in the sum of RM1,500,subject to allocator. [76] Liberty to apply. Dated 18 June 2026 (MELAKA) Lawyer For Appellant : Encik Dzul Iskandar bin Yahya bersama Encik Mohd Fadil bin Mohd Yusof Tetuan Dzul Iskandar & Co. Peguambela dan Peguamcara 5-1, Lorong 1, Jalan Malim Jaya 2, Taman Malim Permai, 75250 Melaka. Lawyer For Respondent : Puan Istisyhad binti Ismail Jabatan Kastam Diraja Malaysia Cawangan Pendakwaan, Wisma Kastam B, Lebuh Ayer Keroh, 75450 Melaka.