LUSH DEVELOPMENT SDN BHD v Ketua Pengarah Hasil Dalam Negeri (WA-25-61-03/2023)

An Order of Certiorari to quash the Respondent’s decision, which is deemed to have been made on 7.3.2023 and communicated to the Applicant on the same date grounds that the said Decision was illegal, void, unlawful and/or in excess of authority, made in breach of principles 65 of natural justice, had been irrational and/or unreasonable, and resulted in a denial of the Applicant’s legitimate expectations;

A Mandamus Order for the Respondent to recognise and give effect to the decision of the Federal Court dated 9.12.2022 in the case of Wiramuda (M) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (Civil 70 Appeal No. 01(f)-38-08/2022(W)) (“the Wiramuda Decision”), which has held, amongst others, that Section 4C of the Income Tax Act 1967 (“ITA”) is unconstitutional as it contravenes Article 13(2) of the Federal

A Mandamus Order for the Respondent to recognise and give effect to 75 the legal position that, following the Wiramuda Decision, the compensations received by the Applicant for the compulsory acquisition of its following parcel of land (“Land ”) by the Selangor State Authority in the year of assessment (“YA”) 2017 are not to be taxed under Section 4C of the ITA and hence, not subject to income tax: 80 No Land Compensation Received (RM) YA i No. PT 44666 (103107), HS(D) 31457, Mukim Dengkil, Daerah Sepang (“Land A” 1,011,360.00 2017 ii No. PT 44667 (103108), HS(D) 31458, Mukim Dengkil,Daerah Sepang “Land B”) 546,000.00 2017 iii No. PT 44669 (103110), HS (D) 31460, Mukim Dengkil,Daerah Sepang (“Land C”) 5,017,155.00 2017 iv No. PT 44670 (103424), HS(D) 31461, Mukim Dengkil,Daerah Sepang (“Land D”) 1,187,760.00 2017 S/N 0BcWrixHskedYwJjvVDjPw v No. PT 44672 (103255), HS (D) 31463, Mukim Dengkil,Daerah Sepang (“Land E”) 4,845,120.00 2017 vi No. PT 45171 (103241), HS (D) 31962, Mukim Dengkil,Daerah Sepang (“Land F”) 132,300.00 2017 vii No. PT 45173 (103243), HS (D) 31964, Mukim Dengkil,Daerah Sepang (“Land G”) 9,731,150.00 2017

A Mandamus Order for the Respondent to allow the Applicant to submit revised tax computations for the YA 2017 on the basis that the compensations received by the Applicant on the Land are not income 85 under the ITA, and to accept and give effect to the revised tax computations accordingly.

A Mandamus Order that the Respondent shall refund the sums of taxes paid by the Applicant on the compensation received for the compulsory acquisition of the Land following the Wiramuda Decision, together with 90 interest accruing at the rate of 8% per annum on the said sum (calculated from the day on which the Applicant has made payment of such taxes to the Respondent until the date the taxes are fully refunded to the Applicant by the Respondent).

A Declaration that the Respondent is bound by and shall give effect to 95 the decision of the Federal Court in the Wiramuda Decision that, amongst others, s.4C of the Income Tax Act 1967 is unconstitutional as it contravenes Article 13(2) of the Federal Constitution.

A Declaration that following the Wiramuda Decision, the compensations received by the Applicant for the compulsory acquisitions of its Land by 100 the Selangor State Authority in the YA 2017 are not to be taxed under Section 4C of the ITA and hence, not subject to income tax.

THAT all necessary and consequential directions and orders be given;

THAT the costs of this application be costs in the cause; and 105

ALL other and further relief which this Honourable Court deems fit and proper.” [4] On 29.07.2025:

After examining and considering all the cause papers, and the 110 respective written submissions of the parties, I find that L1 has merit and order in terms was granted for prayer a, b, c, d, e (with variation, a 5% interest is allowed on the returned sum commencing from the date of the filing of this JR), and prayer f and g.

Parties were ordered to bear their own costs. [5] Dissatisfied with the decision, DGIR has filed an appeal, and my reasons are as follows: 120 S/N 0BcWrixHskedYwJjvVDjPw BRIEF FACTS [6] The brief facts are as follows:

6.1 The applicant (P) is a property development company and has in its land bank owned lands held under No. PT 44666 (103107), HS (D) 31457, Mukim Dengkil, Daerah Sepang , No. PT 44667 (103108), HS 125

(D) 31458, Mukim Dengkil, Daerah Sepang, No. PT 446679(103110), HS (D) 31458, Mukim Dengkil, Daerah Sepang, No. PT 44670

(103108), HS (D) 31463, Mukim Dengkil, Daerah Sepang, No. PT 44672 (103255), HS (D) 31463, Mukim Dengkil, Daerah Sepang, No. PT 45171 (103241), HS (D) 31962, Mukim Dengkil, Daerah Sepang 130 and No. PT 45173 (103243), HS (D) 31964, Mukim Dengkil, Daerah Sepang (the impugned lands).

6.2 The state authority compulsorily acquired the impugned lands under the Land Acquisition Act 1960, where on 19.10.2016, P was paid a 135 compensation of approximately RM22,470,845.00 (the impugned assessment) for the Year of Assessment (YA) 2017.

6.3 In 2017, P held this impugned compensation as stock in trade due to the nature of the company:

DGIR alluded to the Court the following facts:

On 28.02.2018, P filed their Form C: Income Tax Return, their tax return for YA 2017 conforming to s.77A of the Income Tax Act 1967 (ITA).

The YA 2017 is deemed an assessment under section 90 ITA 145 1967.

Section 99 ITA 1967:

Grants an aggrieved taxpayer the right to appeal against the assessment made by the DGIR by filing S/N 0BcWrixHskedYwJjvVDjPw Form Q within 30 days after receiving the notice of the 150 evaluation.

(ii) Unless an extension of time is granted, the notice of assessment becomes final and conclusive by default.

(iii) Effective from the year of assessment 2020, the application for an EOT can be submitted within 5 years 155 after the expiration of the 30-day period.

(iv) An appeal will be ventilated and heard before the Special Commissioner of Income Tax (SCIT)

It was argued that P did not file any appeal against the notice of 160 assessment, rendering it final under section 97 ITA. Every assessment shall be final and conclusive, save where an appeal has been preferred and not withdrawn or disposed of by the Act.

6.3 Approximately five (5) years later, on 09.12.2022, the Federal Court in 165 Wiramuda (M) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2023] 5 MLRA 285, (Wiramuda) held that:

The landowner earned no profit from the adequate compensation from a compulsory acquisition exercise by the authorities.

Section 4C was therefore fundamentally flawed in providing that 170 a business’s profits or gains included compensation from compulsory acquisition, as adequate compensation had no element of profit or gain, nor any pecuniary advantage.

The impugned section had taken away the safeguard of adequate compensation as guaranteed under Article 13(2) of the FC, and it 175 had the effect of reducing the compensation paid to the landowner/taxpayer.

Consequently, the landowner/taxpayer would no longer be receiving adequate compensation under Article 13(2) of the FC.

Section 4C contravenes Article 13(2) of the FC and is thus 180 unconstitutional.

However, the FC did not expressly announce when delivering the judgment whether the ruling applies retrospectively or only prospectively in future cases. S/N 0BcWrixHskedYwJjvVDjPw

6.4 Grounded on this ruling, P attempted to revisit its YA 2017 on the 185 premise that a declaration of unconstitutionality relates to the inception of section 4C, rendering all assessments grounded on the section unlawful irrespective of the period after the coming into force of the impugned section 4C in 2014:

P wrote to the DGIR, dated 21.02.2023, demanding a refund of 190 the tax paid under the defunct section 4C regarding the compensation received for the compulsory acquisition of the impugned land.

P imposed a deadline on the DGIR, stating that if no response is 195 received from the DGIR by 06.03.2023, it would be deemed that the DGIR had rejected the application for a refund.

On 08.03.2023, P proceeded with the filing of the present Judicial Review application (L1) seeking a certiorari to quash the DGIR 200 deemed decision supposedly to have arisen on 06.03.2023, when the DGIR did not respond to P’s letters dated 21.02.2023. It was argued:

Leave was granted by the HC on 13.09.2023.

An appeal to the COA by the DGIR challenging the leave 205 granted by the HC was dismissed by the COA on 16.05.2024.

Leave to appeal to the FC was denied on 10.09.2024.

The FC clarified on 05.11.2024 that the issue of whether the FC order was prospective or retrospective was never argued before the FC during the Wiramuda decision on 09.12.2022. 210 Following the decision on 09.12.2022, the FC became functus officio.

6.5 In this JR (L1), apart from asking for an order for certiorari to quash the deemed decision by the DGIR, P is also seeking:

A mandamus to compel the DGIR to comply with the FC’s ruling, 215 and that the tax assessment for YA 2017 under section 4C involving the compensation is unlawful.

A mandamus to compel the DGIR to allow the submission of a revised tax submission for YA 2017, and that the DGIR is obligated to issue P a refund for the taxes paid with 8% interest 220 per annum on the said sum computed from the day P paid the said taxes.

A declaration that the DGIR is bound by and must give effect to the FC’s ruling.

The Court allows all necessary consequential orders. 225 SUBMISSION BY THE PARTIES I have duly considered and examined the parties' arguments, as follows: [7] SUBMISSIONS BY THE APPLICANT (P) 230 7.1 It is irrefutable that the Federal Court in Wiramuda, in its decision, did not issue a direction of prospectivity when passing judgment. The DGIR could have applied for it to be made prospective, but the DGIR failed to do so in that proceeding, rendering that FC Corum now functus officio:

The FC in Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd and other appeals [2024] 5 MLJ 897, FC observed the existence of exceptional circumstances from the facts to qualify that the ruling in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and 240 S/N 0BcWrixHskedYwJjvVDjPw other appeals [2020] 1 MLJ 281, FC is to be applied prospectively, not retrospectively.

Otherwise, there would be great injustice and devastating consequences to the housing industry as a whole, where house 245 buyers were seeking to be unjustly enriched by rewriting the SPAs which they had accepted and from which they had benefited.

The DGIR had not adduced any evidence to establish exceptional circumstances for prospective overruling to apply to the 250 Wiramuda.

The Federal Court in Arumugam Pillai v Government of Malaysia [1980] 2 MLJ 283, held that once the Apex Court had decided on a tax-related issue, the tax department must apply 255 those principles to all taxpayers, failing which JR would lie.

If prospective overruling is applied, it would unjustly enrich the DGIR on the tax collection over an invalid law (s.4C ITA). 260 7.2 The High Court in Pelangi Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri Application for Judicial Review No: R2-25-39-2011 (2011) MSTC, 30-036, HC KL (22.08.2011) observed that:

The DGIR's reliance on s.111 of ITA (appeal process for tax refund) is misplaced because s.111 deals explicitly with an 265 overpayment.

It is clear that this is not a case of an overpayment. There was no legal basis for the payment made by the DGIR in the first place. The DGIR had subjected the gains arising from the compulsory 270 S/N 0BcWrixHskedYwJjvVDjPw land acquisition to income tax and consequently retained the tax refund, which at all material times was rightfully the taxpayer's money.

7.3 The HC in granting leave in the present JR observed:

That the DGIR’s failure to follow the FC ruling in Wiramuda renders its decision flawed. The DGIR had no right to retain the taxes paid from the compulsory acquisition of the impugned land.

It would appear that the DGIR had unjustly enriched itself by 280 collecting and retaining those taxes from an invalid law.

7.4 The Applicant Cited in support:

Lord Goff, who referred to and followed with the dissenting judgment in Air Canada v British Columbia, held that money 285 paid under unconstitutional legislation was generally recoverable.

The High Court in Power Root (M) Sdn Bhd & Ors v Director General of Customs [2014] 2 MLJ 271, held that retaining ultra vires taxes (i.e., those collected under laws declared invalid) 290 constitutes a breach of constitutional principle, thereby granting the taxpayers a right to restitution.

Even before the introduction of section 4C in 2014, it was argued that gains from a compulsory acquisition were not taxable as 295 determined by the HC, COA and the FC, refusing to grant leave to appeal.

The FC’s determination in Wiramuda carries a retrospective effect in the absence of a clear direction by the FC that has now become 300 S/N 0BcWrixHskedYwJjvVDjPw functus officio. The DGIR is bound and must adhere to the impugned ruling by the FC. [8]

SUBMISSION BY THE DGIR 1

It recognises that LHDN can’t withhold taxes collected on an 305 invalid law, and the present case is no longer about an issue of a tax assessment. In such circumstances, restitution of the taxes paid under the invalid section 4C would be warranted.

However, in the present case, the DGIR did not provide any 310 legitimate reasons for rejecting the discharge application by P.

8.2 In seeking for this Court to apply the doctrine of prospective overruling on the FC’s decision in Wiramuda, the DGIR:

Relying on the Federal Court case of Obata-Ambak Holdings 315 Sdn Bhd v Prema Bonanza Sdn Bhd and other appeals [2024] 5 MLJ 897, FC, the DGIR argued that Wiramuda, ought to be read prospectively and not retrospectively.

An order invalidating legislation should take effect prospectively. 320 Although the Wiramuda order did not specify whether it was to be read retrospectively or prospectively, the DGIR urged the court to consider the Obata Ombak’s case and construe it in light of the doctrine of prospective overruling. 325

It was strongly argued that to allow P's application, it would not only affect the DGIR significantly, but it would open floodgates of cases demanding the same treatment.

The Federal Court ruling in Semenyih Jaya Sdn Bhd v 330 Pentadbir Tanah Daerah Hulu Langat and another case [ S/N 0BcWrixHskedYwJjvVDjPw 2017] 3 MLJ, FC was cited, where it was observed that the doctrine of prospective overruling will apply in that case so as not to give retrospective effect to the declaration made, citing and following Public Prosecutor v Dato’ Yap Peng [1987] 2 MLJ 335 311, SC that had ruled the doctrine of prospective overruling would be applied so as not to give retrospective effect to the declaration made with the result that all proceedings, convictions and acquittals which had taken place under the section before the date of the judgement in this matter would remain undisturbed and 340 not be affected.

The DGIR also cited it the Federal Court’s determination in The Government of Malaysia & Anor v Aminah bt Ahmad (suing in her personal capacity and on behalf of 56 retired members 345 of the public service) [2023] 5 MLJ 32, FC and Court of appeal determination in Aminah bt Ahmad (suing in her personal capacity and on behalf of 56 retired members of the public services) v The Government of Malaysia & Anor [2022] 4 MLJ 74, CA where in a nutshell it was agreed that in cases of this 350 nature involving public interests, and to mitigate the adverse consequences and hardship that the decision of the court may have on pensioners, the Courts (Apex and the Appellate) that this is an appropriate case, and in the public interest, for an order that the decision of this court is only to take effect prospectively.

The DGIR also cited several Supreme Court authorities from foreign jurisdictions to support its argument on prospectivity. S/N 0BcWrixHskedYwJjvVDjPw

8.3 The DGIR alluded the Court to section 111 of the ITA 1967 that allows a taxpayer to pursue a refund within 5 years of the assessment for 360 overpayment of tax:

In the present case, it is clear that the time has lapsed.

P’s assessment for YA 2017, in which the assessment was made on 28.2.2018, was declared by P themselves.

It is unfair to allow P to circumvent the proper procedure established by law under the ITA 1967 for their gain.

There are alternative remedies for disputes of assessment that 370 have not been exhausted by P.

8.4 In the present case, there was no decision, action or omission made by the DGIR to enable P to challenge the DGIR with this JR:

Section 4C (“Gains or profits from a business arising from stock 375 in trade parted with by any element of compulsion”) was a valid law at the time of YA 2017.

P cannot treat a non-reply by the DGIR as a decision amenable to JR, citing the High Court determination in Sime Darby Property 380 (Selangor) Sdn Bhd v Menteri Kewangan Malaysia [2023] MLJU 260, HC. P cannot impose a time-based obligation upon the DGIR.

The DGIR alluded the Court to the position taken by the HC in 385 that a non-reply is not a decision that is amendable to Judicial Review in the case of BYG Architecture Sdn Bhd V. Menteri Kewangan Malaysia [2023] 9 CLJ 557 and Shell Gas Holdings S/N 0BcWrixHskedYwJjvVDjPw (Malaysia) Limited V. Menteri Kewangan Malaysia [2023] 1 LNS 1464. A non-reply does not amount to a deemed decision.

The application for JR is filed out of time:

There is a failure by P to apply for an abridgement of time (O.53, r.3(6) RC 2012).

L1 is already time-barred at the time of filing, with no 395 application made by P to extend time.

The Federal Court in Kijal Resort Sdn Bhd v. Pentadbir Tanah Kemaman & Anor [2015] 3 CLJ 861, had ruled that the failure of an applicant to apply for an extension of time had rendered and served as a basis for the Court not to 400 exercise its discretionary power to extend time THE LAW [9]

9.1 Section 4C of the Income Tax Act 1967 (ITA). 405 “Gain or profits from a business arising from stock in trade parted with by any element of compulsion

For the purpose of paragraph 4(a), gains or profits from a business shall include an amount receivable arising from stock in trade 410 parted with by any element of compulsion, including on requisition or compulsory acquisition or in a similar manner.” Briefly, the above section sought to treat compensation received from the compulsory acquisition of the company’s landed property as 415 taxable business income under section 4(a) of the ITA instead of taxing under the RPGT 1976. Before this, such compensation was not considered taxable under income tax law. 420

9.2 Section 77A “Return of income by every company, limited liability partnership, trust body or co-operative society 1) Every company, limited liability partnership, trust body or co- 425 operative society shall for each year of assessment furnish to the Director General a return in the prescribed form within seven months from the date following the close of the accounting period which constitutes the basis period for the year of assessment. 430

For the purposes of 1A) this section, a company and a limited liability partnership shall furnish to the Director General a return in the prescribed form on an electronic medium or by way of electronic transmission in accordance with section 152A.” 435

9.3 Section 90 “(1) Where a person has furnished a return in accordance with section 77 or 77A to the Director General for a year of assessment, the Director General shall be deemed to have made, on the day on 440 which the return is furnished, an assessment in respect of that person in the amount of tax on the chargeable income, the tax and the chargeable income being the respective amounts as specified in the return.

For the purposes of this Act, where the Director General is 445 deemed to have made an assessment under subsection (1)-

The return referred to in that subsection shall be deemed to be a notice of assessment; and

The deemed notice of assessment shall be deemed to have been served on the person on the day on which the Director 450 General is deemed to have made the assessment.

Where a person for a year of assessment has not furnished a return in accordance with section 77 or 77A, the Director General may, according to the best of his judgment, determine the amount of the chargeable income of that person for that year and make 455 an assessment accordingly: S/N 0BcWrixHskedYwJjvVDjPw Provided that the making of an assessment in respect of a person under this subsection shall not affect any liability otherwise incurred by that person by reason of his failure to deliver the return.” 460 Briefly, section 90 concerns a deemed assessment process and the taxpayers are responsible for calculating their own tax liability.

9.4 Section 91: 465 “Assessments and additional assessments in some instances

The Director General, where for any year of assessment it appears to him that no or no sufficient assessment has been made on a person chargeable to tax, may in that year or within five years after its expiration make an assessment or additional assessment, 470 as the case may be, in respect of that person in the amount or additional amount of chargeable income and tax or in the additional amount of tax in which, according to the best of the Director General’s judgment, the assessment with respect to that person ought to have been made for that year.

Where the Director General discovers that the whole or part of any tax repaid to a person (otherwise than in consequence of an agreement come to with respect to an assessment pursuant to subsection 101(2) or in consequence of an assessment having been determined on appeal) has been repaid by mistake whether 480 of fact or law, the Director General may make an assessment in respect of that person in the amount of that tax or that part of that tax, as the case may be: Provided that no such assessment shall be made— 485

If the repayment was in fact made on the basis of, or in accordance with, the practice of the Director General, generally prevailing at the time when the repayment was made; or 490

In respect of any tax, more than five years after the tax has been repaid

The Director General, where it appears to him that—

any form of fraud or wilful default has been committed by or 495 on behalf of any person; or

Any person has been negligent, S/N 0BcWrixHskedYwJjvVDjPw in connection with or in relation to tax, may at any time make an assessment in respect of that person for any year of assessment for the purpose of making good any loss of tax attributable to the 500 fraud, wilful default or negligence in question.

…..

…..

…..

…..

…..” Briefly, section 91 of the ITA deals with assessments and additional assessments in certain instances. It empowers the DGIR to make or amend the tax assessments under specific circumstances.

9.5 Section 97 Finality of assessment “(1) Where:

No valid notice of appeal against an assessment has been 515 given under section 99 within the time specified by that section (or any extension thereof);

An agreement has been come to with respect to an assessment pursuant to subsection 101(2).

An assessment has been determined on appeal, and there is 520 no right of further appeal; or

A valid notice of appeal against an assessment has been given, but the appellant dies before the hearing of the appeal by the Special Commissioners is commenced or completed, and no personal representatives of the estate of the 525 deceased appellant apply to the Special Commissioners within two years after his death to proceed with or complete the hearing. The assessment as made, agreed to or determined shall be final and conclusive for the purposes of this Act. 530

Nothing in subsection (1) shall prejudice the exercise of any power conferred on the Director General by section 91, 95 or subsection 143(3). 535 Briefly, a tax assessment made by the DGIR is final and conclusive. Section 97 establishes a sense of certainty and finality in the tax assessment process. It prevents both taxpayers and the tax authority from endlessly reopening past tax years. 540 9.6 Section 99 Right of appeal “Subject to subsection (1A), a person aggrieved by an assessment made in respect of him may appeal to the Special Commissioners against the assessment by giving to the Director General within thirty 545 days after the service of the notice of assessment or, in the case of an appeal against an assessment made under section 92, within the first three months of the year of assessment following the year of assessment for which the assessment was made (or within such extended period as regards those days or months as may be allowed 550 under section 100) a written notice of appeal in the prescribed form stating the grounds of appeal and containing such other particulars as may be required by that form…” Briefly, section 99 is the legal basis for taxpayers' right of appeal to 555 challenge a tax assessment made by the DGIR that they believe to be incorrect.

9.7 Section 111 “Refund of over-payment 560

Subject to this section, where it is proved to the satisfaction of the Director General that any person has paid tax for any year of assessment (by deduction or otherwise) in excess of the amount payable under this Act, that person shall be entitled to have the excess refunded by the Government and, where that person is dissatisfied 565 S/N 0BcWrixHskedYwJjvVDjPw with the amount to be refunded to him, he may within thirty days of being notified of that amount appeal to the Special Commissioners as if the notification were a notice of assessment, the provisions of this Act relating to appeals applying accordingly within any necessary modifications. 570 …….” Briefly, section 111 provides for the refund mechanism for any excess or over-payment of tax. 575 FINDINGS OF THIS COURT [10] It is a trite principle in law that all cases are decided on whether the legal burden of proof has been discharged. The burden is on those who allege a fact are duty-bound to prove it (see s.101, 102, and 103 of the Evidence Act 1950: Selvaduray v Chinniah [1939] 1 MLJ 580 253, 254 (CA).

10.1 In the foregoing circumstances, it is my considered judgment that P has discharged its burden in L1. 585 10.2 The issue of prospectivity or retrospectivity: The Federal Court in Wiramuda did not apply the doctrine of prospective overruling in its determination since parties failed to advise and argue it before the Federal Court. 590 [11] (1) I take cognisance that:

The Federal Court is the Apex Court in the land, followed by the Court of Appeal.

Therefore, a High Court in its hierarchy that is subordinate to the Court of Appeal, and the Federal Court cannot intervene 595 to declare a Federal Court ruling as retrospective or S/N 0BcWrixHskedYwJjvVDjPw prospective, save to follow the trite legal principle that Court Judgments by default carries a retrospective effect unless such judgment or orders had been expressly subjected to the doctrine of prospective overruling.

That power to subject an impugned judgment to the doctrine of prospective overruling resides with the Apex Court that delivered the impugned determination. If the Federal Court intends for its decision to have a prospective effect, it will do so in its judgment. In the absence of such a statement, the 605 general rule of retrospectivity applies.

The DGIR, in its defence and assertions, in asking the High Court to alter the effect (retrospective to prospective) by applying the doctrine of prospective overruling of an Apex Court Judgment, 610 would not be legally appropriate as it would undermine the fundamental principle of judicial hierarchy and precedent.

While the High Court might interpret the application of a Federal Court decision in specific cases, it does not have the authority to 615 unilaterally change the effect of the FC’s pronouncement on a point of law.

In such circumstances, the Federal Court’s ruling in Wiramuda remains as it is and the parties are bound by it. The Federal Court 620 in Arumugam Pillai v Government of Malaysia (supra) held that once the Apex Court had decided on a tax-related issue, the tax department must apply those principles to all taxpayers, failing which JR would lie. 625 S/N 0BcWrixHskedYwJjvVDjPw [12] In light of the foregoing findings:

The DGIR’s opposition to this JR(L1) would not be tenable in the circumstances.

As was held by the HC, in the premises, section 111 ITA (appeal 630 for tax refund) would not apply as this issue relates to unlawful tax collection under an invalid law which had applied retrospectively, distinguishable from overpayment under a tax assessment.

The DGIR’s inaction on the matter created an impasse with P that should not have been. It was a conscious decision on the part of 635 the DGIR not to respond to P regarding its query concerning the tax refund for the tax paid under the invalid section 4C of the ITA, which applied retrospectively. The intentional decision to remain silent was unwarranted. 640 CONCLUSION [13] By and large, based on the evidence available before this Court, I find that P has discharged its burden to establish its claim in the present proceeding and final judgment is entered in favour of P. Order in terms of prayers a, b, c, d, e (with variation, a 5% interest is allowed on the returned 645 sum commencing from the date of the filing of this JR), and prayer f and g. Parties to bear their own costs. Dated: 26.09.2025 650 HAYATUL AKMAL ABDUL AZIZ JUDGE HIGH COURT OF MALAYA 655 KUALA LUMPUR S/N 0BcWrixHskedYwJjvVDjPw For the Applicant: Dato’ Nitin Nadkarni, together with Chris Toh Pei Roo and Soon Jia Ying Messrs Lee Hishammuddin Allen & Gledhill 660 For the Respondent: Ahmad Isyak bin Mohd Hassan (SRC), together with Mohd Harris bin Hanapi (SRC), Mohamad Asyraf bin Zakaria (RC), Azleena binti Md Khairuddin (RC) and Nurfarzana Mohammad Puat 665 (RC) Senior/Revenue Counsels Inland Revenue Board of Malaysia (DGIR) 670 S/N 0BcWrixHskedYwJjvVDjPw