Kerajaan Malaysia v INTEGRATED MARINE WORKS SDN. BHD. (BA-21NCvC-53-04/2021)

Enclosure 8 is filed by the plaintiff, the Government of Malaysia, to seek leave to enter summary judgment against the defendant for default of payment of income taxes. The suit is filed pursuant to s.106(1) of the Income Tax Act 1967 (hereafter ‘the Act’) which states: “Tax due and payable may be recovered by the Government by civil proceedings as a debt due to Government.”

On 6.7.2022, this Court allowed summary judgment to be entered against the defendant. The reasons for the decision are set out below.

The plaintiff’s claim for the sum of RM43,758,515.94 has been lucidly detailed and explained in the defendant’s counsel’s submission (Enclosure 13) at paragraphs 2 to 4 which this Court does not intend to regurgitate the facts here. The facts submitted therein are not in dispute.

The defendant’s counsel submits that the defendant is raising two triable issues as its defence to the application for summary judgment. Page 3 of 14 First, the Notices for instalment payments for years 2014 and 2017, Form J for years 2014, 2017, 2018 and Form JA for year 2017 (Additional) and year 2018 (Additional) (hereafter ‘the impugned notices) were not served on or received by the defendant at all material times. Secondly, that the Certificate of Indebtedness relied on by the plaintiff is invalid and cannot be relied on to prove the amount of tax owed by the defendant to the Inland Revenue Board (hereafter “the IRB”).

Any notice that is required to be served under the Act, subject to any express provision, may be served personally or by ordinary or registered post (see s.145(1) of the Act).

Below is a diagram depicting the addresses stated on the impugned notices which the defendant averred it did not receive. Page 4 of 14 Item Impugned Notices Address Date of Issuance 1 Notice for instalment payments for year 2014 Lot 7, First Floor OPA Building Saujana Resort Section U240150 Shah Alam Selangor

21.1.2014 2 Notice for instalment payments for year 2017 Lot 74082, Pantai Aceh

10.2.2017 3 Form J for year 2014 Lot 74082, Pantai Aceh

4.8.2017 4 Form J for year 2017 Lot 74082, Pantai Aceh

27.3.2019 5 Form J for years 2018 Glomac Business Centre Unit 302, Block A, Jalan SS6/1, Kelana Jaya 47301 Petaling Jaya

27.9.2019 6 Form JA for year 2017 (Additional) Glomac Business Centre Unit 302, Block A, Jalan SS6/1, Kelana Jaya 47301 Petaling Jaya

23.6.2020 7 Form JA for year 2018 (Additional) Glomac Business Centre Unit 302, Block A, Jalan SS6/1, Kelana Jaya

23.6.2020 Page 5 of 14 47301 Petaling Jaya Selangor (Note: the above impugned notices can be found at Exhibits “NSML-2” and “NSML-3” of the affidavit of Nani Suhana Binti Mohd Lazim affirmed on 25.8.2021 – Enclosure 9) [7] In reply to the defendant’s averment that the defendant did not receive those impugned notices, the plaintiff through the affidavit-in-reply affirmed by Nani Suhana Binti Mohd Lazim dated 24.9.2021 (Enclosure 11) exhibited the evidence of posting of all the impugned notices to the defendant. This Court, after having examined the exhibits therein (in Enclosures 9 and 11), is satisfied that the impugned notices had been sent to the defendant by way of ordinary post. Although the postings were sent in bulk posting, the plaintiff is able to show the impugned notices were sent in the respective bulk postings. [8] A notice is permitted to be sent by way of ordinary post (see s. 145(1) of the Act), and the relevant part of s. 145 (2) of the Act states: “(2) A notice relating to tax which is sent by ordinary or registered post shall be deemed to have been served on the person (including a partnership) to whom it is addressed on Page 6 of 14 the day succeeding the day on which the notice would have been received in the ordinary course of post if it is addressed -

in the case of a company, partnership or body of persons having a registered office in Malaysia -

to that registered office;

(ii) to its last known address; or

(iii) to any person authorized by it to accept service of process:

(b)….:-

…;

(ii) …; or

(iii) …; and

….

(b)….” [9] Insofar as the impugned notices in items 2, 3 and 4 are concerned, the address stated is the address for the defendant’s place of business (see SSM search dated 14.1.2021, Exhibit “NSML-1” affirmed by Nani Suhana Binti Mohd Lazim dated 25.8.2021, Enclosure 9) which was the Page 7 of 14 last known address of the defendant during the period in 2017 to early 2019. [10] As for the impugned notice item 1, the address stated therein was the last known address of the defendant based on a form CP204 filled by the defendant’s tax agent (Peter Chong Tax Services (KL) Sdn Bhd) to the IRB which IRB had received on 29.11.2007 (see Exhibit “AZ-1” the Afidavit Sokongan Azraf Bin Azmi affirmed on 11.5.2022, Enclosure 24). [11] With regard to the impugned notices items 5, 6 and 7, the plaintiff has explained that in late 2018, the defendant’s tax agent (TC Commercial Tax Services Sdn Bhd) had been in communication with the IRB and the tax agent’s address was provided as the correspondence address for the defendant which was the last known address of the defendant (see Exhibit “AZ-2” the Afidavit Sokongan Azraf Bin Azmi affirmed on 11.5.2022, Enclosure 24). [12] Based on the documents/exhibits adduced in the supporting affidavits (Enclosures 9, 11 and 24) of the plaintiff, this Court is satisfied that the plaintiff had by way of ordinary post sent all the impugned notices to the defendant’s respective last known addresses during the material Page 8 of 14 time. Hence, according to s. 145 (2) of the Act, those impugned notices were deemed to have been served to the defendant. [13] In Kerajaan Malaysia v Neraca Untung Sdn Bhd [2009] 1 LNS 575, para 17, the Court of Appeal held: “The notice must be deemed or presumed to have been served on the Respondent. The Respondent has failed to rebut the presumption. It is nor [sic] disputed that the last known address of the Respondent was provided by the Respondent's tax agent personally. Hence, the Respondent's claim that the 1997 (Additional) notice was not received cannot hold water.” [14] Likewise, in the present case, the defendant did not adduce any evidence to satisfy this Court to make a finding that the deeming provision has been rebutted. The defendant merely denied having received the impugned notices (see paragraphs 5(a), 9(a), 13, 15 of Afidavit Jawapan Defendan affirmed by one Muhammad Hafiz Bin Johari dated 8.9.2021, Enclosure 10). The defendant did not justify why the last known addresses on the record of the IRB were incorrect or that the defendant had notified the IRB of the latest correspondence address at the material times and years the impugned notices were sent to the defendant. Page 9 of 14 [15] Based on the above findings, this Court finds the first issue raised by the defendant’s counsel is untenable. Second Issue: Validity of the Certificate of Indebtedness [16] With regard to this second issue, the defendant’s counsel avers that the Certificate of Indebtedness dated 25.8.2021 was signed by one Rohaizan Binti Jumat for and on behalf of the Director General of the IRB. The “Surat Kuasa” issued under s. 136(5) of the Act to Rohaizan Binti Jumat was dated 23.5.2008 which was signed by the then Director General of IRB Dato’ Hasmah Bt. Abdullah. [17] The defendant’s counsel further avers that as at 25.8.2021, when the Certificate of Indebtedness was issued, the Director General of IRB at that material time was Datuk Seri Sabin Bin Samitah. Hence, the Certificate of Indebtedness issued on 25.8.2021 could not be valid because “the written authorisation to exercise the function of the Director General in issuing the Certificate of Indebtedness ought to be issued by Datuk Seri Sabin Bin Samitah, he being the sitting Director General at that material time.” Page 10 of 14 [18] Section 136(5) of the Act states: “(6) Where a public officer or an employee of the Inland Revenue Board of Malaysia exercises any of the Director General's functions by virtue of any provision of subsections

to (5), he shall do so subject to the general supervision and control of the Director General.” [19] The defendant’s counsel submits that the “Director General” that is referred to in s. 136(5) of the Act has to be referred to the sitting Director General at the material time when the Certificate of Indebtedness was issued. [20] The defendant’s counsel submits that s. 134(1) of the Act states: “There shall be a Director General of Inland Revenue, who shall have the care and management of the tax…”, and s. 6A(1) of the Inland Revenue Board of Malaysia Act 1995 states: “The Minister shall, on the recommendation of the Board, appoint a chief executive officer who shall be responsible for the day-to-day administration of the Board.” Hence, reading the two sections together, the “Director General” that is referred to in the Act has to be the sitting Director General who is responsible “for Page 11 of 14 the day-to-day administration of the Board”, the defendant’s counsel submits. [21] The second issue raised by the defendant ‘s counsel has been ventilated and decided in a High Court decision in Kerajaan Malaysia v Beyond Gateway Sdn Bhd [2003] 2 CLJ 527, wherein it was held that a certificate (issued under s. 136(5) of the Act) dated 8.8.1996 which was signed by the then Director General was still valid and subsisting to this very day (as at 15.2.2003 when the High Court delivered its decision). [22] Similarly, in the present case, the “Surat Kuasa” issued under s. 136(5) of the Act to Rohaizan Binti Jumat dated 23.5.2008 which was signed by the then Director General of IRB Dato’ Hasmah Bt. Abdullah is still valid and subsisting until today. The “Surat Kuasa” will continue to be valid and subsisting, and power given therein to Rohaizan Binti Jumat will continue and subsist until it is being revoked and degazetted. [23] In a recent High Court decision in Kerajaan Malaysia v ASM Development (KL) Sdn Bhd [2022] 1 LNS 488, para [44], it was held that the same officer Rohaizan Binti Jumat as in the present case has been acknowledged and recognised by that High Court as an officer who has been duly gazetted in accordance with s. 134(2)(d) of the Act as an officer Page 12 of 14 as “may be necessary and expedient for the due administration” of this Act. The finding of that High Court decision strengthens the finding of this Court that the “Surat Kuasa” dated 23.5.2008 which was signed by the then Director General of IRB Dato’ Hasmah Bt. Abdullah is still valid and subsisting until today. [24] In Kerajaan Malaysia v Neraca Untung Sdn Bhd (supra), at para 18, the Court of Appeal held: “Tax due and payable may be recovered by the Appellant by civil proceedings as debt due under section 106 of the Income Tax Act 1967. In a suit under section 106, the production of a certificate signed by the Director - General of Income Tax giving the name and address of the Respondent and the amount of tax due from them shall be sufficient evidence of the amount so due and would be sufficient authority for the Court to give judgment for that amount. This is provided for under section 142 (1) of the same Act. In the present case the Director - General of Income Tax had issued the said certificate certifying the amount of tax due from the Respondent. Therefore, without any reason to the contrary, the Court can rely on the said certificate to give judgment for that amount. There is no triable issue in this case.” Page 13 of 14 [25] Relying on the above Court of Appeal decision, this Court has no hesitation to accept that the amount stated in the Certificate of Indebtedness is a debt due and payable by the defendant and that there is no triable issue. Hence, the second issue raised by the defendant’s counsel is also untenable. Conclusion [26] For the reasons as stated above, this Court allows summary judgment to be entered against the defendant as prayed for by the plaintiff in its Enclosure 8. This Court orders costs of RM2,000.00 (subject to allocator fees) to be paid by the defendant to the plaintiff. SGD ………………………………………… (CHOO KAH SING) JUDGE HIGH COURT SHAH ALAM Page 14 of 14 Counsel for the plaintiff: Muhamed Harez Peguam Hasil Lembaga Hasil Dalam Negeri Malaysia (Cawangan Guaman Kuala Lumpur) Counsel for the defendant: Chan Jian Ying Messrs. Harold & Lam Partnership.