Ketua Pengarah Kastam dan Eksais v Coach Malaysia Sdn Bhd (W-01(IM)-338-09/2017)

1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE CIVIL JURISDICTION) CIVIL APPEAL NO: W-01(IM)-338-09/2017 BETWEEN KETUA PENGARAH KASTAM DAN EKSAIS … APPELLANT AND COACH MALAYSIA SDN BHD … RESPONDENT [Dalam Perkara Mengenai Mahkamah Tinggi Di Kuala Lumpur Permohonan Untuk Semakan Kehakiman No: WA-25-193-07/2017 Dalam perkara sesuatu keputusan Ketua Pengarah Kastam dan Eksais yang menolak permohonan tuntutan pembayaran balik khas cukai jualan bagi barang dalam pegangan melalui surat bertarikh 18.1.2017 Dan Dalam perkara seksyen-seksyen 126, 127, 190, 191 dan peruntukan-peruntukan lain yang berkenaan dalam Akta Cukai Barang dan Perkhidmatan 2014 Dan Dalam perkara perenggan 1, Jadual Akta Mahkamah Kehakiman, 1964 Dan Dalam perkara Aturan 53 Kaedah-Kaedah Mahkamah 2012 Antara 2 Coach Malaysia Sdn Bhd (No. Syarikat: 185981-W) … Pemohon Dan Ketua Pengarah Kastam Dan Eksais … Responden] CORAM UMI KALTHUM ABDUL MAJID, JCA ABDUL RAHMAN SEBLI, JCA ZALEHA YUSOF, JCA JUDGMENT OF THE COURT [1] The appellant’s appeal was against the decision of the Kuala Lumpur High Court granting the respondent’s application for judicial review. We allowed the appeal and these are our grounds. [2] The respondent’s application for judicial review was for the following reliefs:

(ii) an order of mandamus directing the appellant to refund the sum of RM5,120,368.28 for the special refund of sales tax for goods held on hand to be paid to the respondent by the appellant upon the final determination of the judicial review; 3

(iii) if the respondent’s application was found to have been out of time, that the respondent be granted an extension of time pursuant to Order 53 rule 3(7) of the Rules of Court 2012 (“the Rules”);

(iv) that the costs of and/or incidental to the application be costs in the cause; and/or

(1) there was non-compliance with Order 53 r 3(6) of the Rules and there was no good reason for the grant of an extension of time; and

(2) the application was premature and misconceived as there was an alternative remedy, i.e. a provision allowing for review under section 124 of the GST Act. [13] With regard to issue (1) above, Order 53 r 3(6) of the Rules provides as follows: “3. (6) An application for judicial review shall be made promptly and in any event within three months from the date when the grounds of application first arose or when the decision is first communicated to the applicant.” [14] Order 53 r 3(7), however, gives the Court the discretion to grant an extension of time if it considers that there is a good reason for doing so. We reproduce below Order 53 r 3(7) for ease of reference: 6 “(7) The Court may, upon an application, extend the time specified in rule 3(6) if it considers that there is a good reason for doing so.” [15] By the terms of the Order, one “good reason” is good enough to entitle the applicant to an extension of time. It is a matter for the judicial exercise of the judge’s discretion. On the attitude of the appellate Court in respect of the exercise by the judge of the discretion vested in him, the Privy Council in Ratnam v Cumarasamy [1965] 1 MLJ 228 provided the following useful guideline: “The principles upon which a court will act in reviewing the discretion exercised by the lower court are well settled. There is a presumption that the judge has rightly exercised his discretion (Charles Osenton & Co v Johnson [1942] A.C. 130 per Lord Wright at p. 148). The court will not interfere unless it is clearly satisfied that the discretion has been exercised on a wrong principle and should have been exercised in a contrary way or that there has been a miscarriage of justice (Evans v Bartlam [1937] A.C. 473).” [16] The burden is on the applicant who seeks an extension of time to make available sufficient material upon which the court may exercise the discretion in his favour: See Tan Siew Peng v OCBC Bank (M) Bhd [1998] 2 MLJ 420 C.A. [17] There is sufficient adjective law on the effect of failure to comply with the limitation period prescribed by Order 53 r 3(6) of the Rules. Suffice it if we refer to just four of them. In Tengku Anoomshah bin Tengku Zainal Abidin & Anor v Collector of Land Revenue, North-East District, Penang & Anor [1995] 3 CLJ 434, Vincent Ng Kim Khoay J in his judgment said at page 439: “On general principles, this Court has no inherent jurisdiction to extend time except where such power is expressly given to it under the provision of the law. See Central Electricity 7 Board v Commissioner of the Federal Capital and Anor.; Insurance Company of North America – 3rd party [1967] 2 MLJ 161. However, the words “or, … except where the delay is accounted for to the satisfaction of the Court or Judge to whom the application for leave is made” in Order 53 r 1A, which deals with the applications, would sufficiently clothe the Court with powers to extend time to enable the aggrieved party to apply for leave to issue an order of certiorari. But though the Court has an unfettered discretion to grant or refuse an extension of time, the rules of Court must prima facie be obeyed; and in order to justify an extension of time, there must be some material on which the Court can exercise its discretion in favour of the applicant. For otherwise the party in breach of the rules would have an unfettered right to extension of time which would defeat the very purpose and object of the rules of limitation of period. See Ong Guan Teck & Ors v Hijjas [1982] 1 MLJ

105.” [18] In Wong Kin Hoong & Anor (suing for themselves and on behalf of all the occupants of Kampung Bukit Koman, Raub, Pahang) v Ketua Pengarah Jabatan Alam Sekitar & Anor [2013] 4 MLJ 161 the Federal Court came to the following conclusion: “[30] 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.” [19] In Seruan Gemilang Makmur Sdn Bhd v Pegawai Kewangan Negeri Pahang [2016] 4 CLJ 100, this Court held as follows: “[78] In our view, the prima facie rule is that an application to apply for leave for judicial review made outside the prescribed period will not be entertained and it is a pre-condition to the exercise of discretion in his or her favour that the applicant show an (sic) “a good reasons” of the delay. The court would not grant the application for extension unless positively satisfied it is proper to do so. The judicial rulings indicate that when explanations for delay will be acceptable may vary according to the circumstances of each case. 8 [79] The settled law is that the operative time for the ground to have arisen, and which set the timeline within which the application is to be made, is the date when the first decision communicated to the applicant.” [20] Last but not least, the Federal Court case of Ahmad Jefri Bin Mohd Jahri @ Md Johari v Pengarah Kebudayaan & Kesenian Johor & Ors [2010] 3 MLJ 145 where it was held that the stringent conditions imposed by Order 53 of the Rules are intended to protect those entrusted with the enforcement of public duties against groundless harassment and to reduce delays in resolving applications in the interest of good administration. The Court went on to say at page 172: “However, O 53 of the RHC sets out a specific procedure for an aggrieved party seeking relief, including a declaration, against a public authority on his infringed right protected to which he was entitled to protection under public law to follow. It is our view that when such an explicit procedure is created to cater for this purpose, then as a general rule all such application for such relief must commence according to what is set down in O 53 of the RHC otherwise it would be liable to be struck off for abusing the process of the court.” [21] Coming back to the present appeal, the appellant’s contention was that the respondent’s application for leave was outside the three-month limitation period prescribed by Order 53 r 3(6) of the Rules. It was submitted that time began to run from 18.1.2017, the date the appellant’s decision was uploaded onto the respondent’s TAPS account. The learned judge accepted this proposition when she said at paragraph [27] of her grounds of judgment: “[27] I am of the considered opinion and I agree with learned Senior Federal Counsel for the DG that the Decision had been communicated to the applicant via uploading it into the applicant’s TAP System account on 18.1.2017. A notification was also sent by email on 19.1.2017.” 9 [22] Measured from 18.1.2017, the last date for the respondent to file the leave application therefore fell on 18.4.2017. As such, the respondent was three months out of time by the time it filed the leave application on 17.7.2017. [23] It was submitted on behalf of the appellant that the respondent should have known of the rejection decision as the e-mail address to which the notification was sent on 19.1.2017 was provided by the respondent itself when it registered for the TAPS account. [24] The respondent however contended that it was still within time to file the leave application. The reason given was that it only came to know of the decision on 2.6.2017, and this was after receiving the TAPS account password from its auditor the day before, that is, on 1.6.2017. According to the respondent, this was the date the decision was “communicated” to it within the meaning of Order 53 r 3(6) of the Rules. [25] What the respondent was implying was that it did not even know the password to its TAPS account. It had to wait for its auditor to give it the password to gain access to the TAPS account. It is obvious that the respondent was putting the blame on the auditor for its delay in filing the leave application. The learned judge had this to say in allowing the respondent’s application for an extension of time: “[34] Having considered the factual matrix of this case, I am of the considered opinion that the circumstances in this case warrant an exercise of the court’s discretion to extend time in the applicant’s favour. The applicant has not slept on its rights. The applicant had responded to the DG’s request for documents and information promptly between 9.12.2015 to 13.6.2016. From 27.6.2016 to 22.11.2016, the applicant has made several inquiries to 10 the DG on the status of its application for a refund, but the DG failed to respond to the same.” [26] Her Ladyship then referred to the decision of the Federal Court in Tunku Yaacob Holdings Sdn Bhd v Pentadbir Tanah Kedah & Ors [2016] 1 MLJ 200 and went on to say: “[36] Added to that, the applicant genuinely did not know about the Decision as they were not informed of the same by their former GST provider, Mazars. This can beseen from exhibit A-17, where the applicant’s employee had emailed Alicia Chin of Mazars if Alicia Chin would login the customs TAP website and ‘check if we have received any response’. Upon receipt of the TAP login access from Mazars, the applicant then found out about the Decision and filed this application without undue delay.” [27] The appellant’s answer to the reason given by the respondent for the delay was that this was not the first time that such decision was communicated to the respondent using the TAPS account, and the respondent had been using the system ever since it was registered on 1.4.2015. There was therefore no valid excuse for the respondent not to act promptly. [28] The TAPS account was an electronic service and its use was statutorily prescribed by section 166 of the repealed GST Act, which provided as follows: “Use of electronic service

166. (1) Notwithstanding any other provision of this Act and subject to regulations made under this Act, the Director General may provide an electronic service to any registered user for – 11

(2) Where an electronic notice is made and transmitted to the Director General, the Director General shall not be liable for any loss or damage suffered by the registered user by reason of any error or omission of whatever nature or however arising appearing in any electronic notice obtained by the registered user under the electronic service if the error or omission was made in good faith and in the ordinary course of the discharge of the duties of the Director General or occurred or arose as a result of any defect or breakdown in the service or in the equipment used for the provision of the service.

(3) Any electronic notice made and transmitted by the registered user shall be deemed to have been filed, furnished or served at the time the electronic notice is received by the Director General.

(4) For the purposes of this section, “registered user” means any person who is authorized in writing by the Director General to gain access to and use the electronic service.” [29] For service of documents, the mode was prescribed by section 167(1)(c) of the GST Act, which reads:

167. “Service of notices

(1) Every notice, direction or any other document required by this Act to be served on any person may be served –

(2) ……………………………

(3) Where a person has given his consent for a notice to be served on him through the electronic service, the notice shall be deemed to have been served at the time when the electronic notice is transmitted to his account through the electronic service.” 12 [30] Thus, by virtue of section 167(3) of the GST Act, the appellant’s decision that was uploaded to the appellant’s TAPS account on 18.1.2017 was deemed to have been served on the respondent on the same date. The learned judge was therefore right in holding that this was the date the decision was “communicated” to the respondent for the purposes of Order 53 r 3 (6) of the Rules. [31] The respondent’s excuse for the inordinate delay in filing the leave application is unacceptable. It was the duty of the respondent to monitor its TAPS account and not to blame its own auditor for missing the dateline. The respondent’s claim that it did not even know the password to its own TAPS account is hard to believe and is equally unacceptable. [32] In any event, the delay caused by the auditor, even if true, was the respondent’s internal problem and had nothing to do with the appellant. The appellant should not be put at a disadvantage due to the respondent’s lack of care in managing its TAPS account. [33] In the circumstances, we were of the view, with due respect to the learned judge, that she was wrong in accepting the reason as a “good reason” to justify an extension of time. It will be setting a dangerous precedent for the Court to allow such kind of excuse as a way to overcome the limitation period prescribed by the law. [34] We further agreed with the learned Senior Federal Counsel that the appeal should be allowed on another ground, and that is, the respondent’s application for judicial review was premature as there was an alternative remedy available to it under section 124 of the GST Act. The provision was couched in the following language: 13

124. “Application for review

(1) Any person may apply to the Director General within thirty days from the date the person has been notified of any decision made by an officer of goods and services tax for the review of the decision and provided no appeal has been made on the same matter to the Tribunal or court.

(2) Where an application has been made under subsection (1), the Director General shall make a decision and notify the person within sixty days from the date of the application is received or within the time practicable.

(3) An application under subsection (1) shall be made in the prescribed manner and prescribed form.” [35] What the provision meant was that any person aggrieved by the decision of the DG may apply, within thirty days of the notification of the decision, for a review of the decision, provided no appeal was made to the Tribunal or to the Court within that period. [36] This was not done by the respondent. In our view the intention of the legislature then was clear, and that was for the person aggrieved by the decision of the DG to first exhaust the internal remedy before appealing to the Tribunal or to the Court. [37] In Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ 185, the Supreme Court reiterated the following principle: “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 are other avenue or remedy open to the applicant it will only be exercised in very exceptional circumstances.” 14 [38] The respondent had not shown “very exceptional circumstances” for going for judicial review instead of first applying for review under section 124 of the GST Act. [39] It was for all the reasons aforesaid that we allowed the appellant’s appeal with costs of RM5,000.00 and set aside the decision of the High Court. Signed ABDUL RAHMAN SEBLI Judge Court of Appeal Malaysia Dated: 22 January 2019. For the Appellant: Farah Ezlin Yusop Khan, SFC and Syamimi Farhana, FC of the Attorney General’s Chambers. For the Respondent: Mohd Arief Emran bin Arifin, Jason Liang and Kelvin Hong Meng Chong of Messrs Wong & Partners.