Schedule
Schedule 5 to section 102 ITA. 82. A right of administrative judicial review also subsists, as such a right of administrative review lies against the decisions of all inferior tribunals because the Courts enjoy supervisory judicial powers to do so as explained earlier above. This power is recognised and delineated under of the (Courts of Judicature Act 1964) Sch 1 to section 25. 83. A right of constitutional judicial review under Art. 4(1) FC also lies where it is contended that a provision of the Act is unconstitutional, as is the case here. 84. The provisions in sections 103 to 106 ITA, and in particular section 106 ITA in toto, relate to the immediate collection and recovery of tax assessed to be due by the DGIR within a ‘pay first dispute later’ system. On the other hand, objections to, or appeals against the veracity of the sum assessed to be due, are adjudicated on the basis of the system prescribed under section 99(1) ITA under Part VI, Chapter 2 entitled ‘Appeals’. This means, in effect, that even if adjudication is delayed on the ultimate liability of the tax payer of the sum assessed to be due, immediate payment of the sum is NOT deferred. 85. Any errors in the sum so assessed to be due will be refunded to the tax payer under section 111 ITA, after the full process of adjudication prescribed for objections and appeals in Chapter 2 and Schedule 5 is undertaken. 86. Put another way, adjudication of the merits of an assessment fall to be considered by the SCIT under section 99(1) ITA with recourse to the superior Courts by way of appeal. However, for purposes of immediate collection and recovery of sums assessed to be due by the DGIR, recourse is made to the Courts under section 106 ITA supported by section 142(1) ITA and section 103B ITA to give effect to the ‘Pay first dispute later’ scheme and operation of the ITA. 87. The Court under section 106 ITA is fulfilling the purpose of recovery or collection only. It is not undertaking a full judicial adjudicatory role. Its full adjudicatory judicial power is deferred to the appeal arising from the decision of the SCIT by way of questions of law, or administrative or constitutional judicial review at a subsequent stage. 88. And this is consonant with the ‘Pay first dispute later’ mode of tax imposition by the Government. There is no abrogation or suspension of the Court’s adjudicatory powers because those powers remain to be exercised in the course of the appeal proceedings brought in relation to the assessment itself. The judicial powers of judicial review as well as powers of judicial intervention in the form of a stay are also available and not ousted. 89. In short, section 106(3) ITA cannot be viewed as abrogating, suspending or removing judicial powers because the Court is only facilitating collection and recovery under the ITA. It is not exercising its full judicial powers of hearing, adjudication or determination which arise under the dispute adjudication system stipulated in Part VI, Section 2, Appeals under the ITA. The preclusion of issues relating to the quantum of tax payable or the basis of imposition of tax or whether a person is a ’chargeable’ person or not are all matters that fall for consideration under the appeals procedure. 90. This is borne out by the characterisation of the quantum of assessment (falling due after issuance by the DGIR and expiry of the time period given to make payment) as a ‘debt’ under section 106(1). This means that the sum assessed becomes a ‘debt’ due under the ITA, which is recoverable in civil proceedings. 91. This statutory certification of the sum assessed as a debt means that the sum so certified is statutorily due and payable. However, it is equally clear from a perusal of the ITA as a whole, that it is not a final determination of the sum due and owing by the taxpayer because section 99(1) ITA remains untouched and enables the taxpayer to proceed with his grievances through the SCIT and the entire hierarchy of the Courts. It follows that the sum adjudged to be due under section 106 is to facilitate the collection and recovery of the sum assessed under the ‘Pay first, dispute later’ system. 92. This mode of construction of section 106 ITA is the preferred and correct construction for yet another reason. It is not open to a Court to adjudicate on the same debt twice. If indeed the section 106 ITA proceedings are subject to the same level and form of judicial scrutiny as the appeal from the SCIT or judicial review, then res judicata and issue estoppel would bite, precluding the determination by the SCIT of the dispute under section 99(1) ITA and the subsequent right of appeal conferred by Parliament to the superior Courts. Judicial review may also be foreclosed. This in itself provides a coherent basis for explanation as to why section 106(3) ITA restricts the areas that the Court may scrutinise in a section 106 ITA recovery proceeding. 93. If section 106 ITA were construed in a fashion so as to allow the taxpayer to challenge proceedings under that provision by raising certain defences both at court and before the SCIT, it could give rise to inconsistent decisions by the court and the SCIT. As astutely observed by Edgar Joseph Jr FCJ in Dato’ Haji Ghani Gilong: “If Counsel for the taxpayer were correct in his contention that the plea of limitation based on sub-sections 1 and 3 of s. 91 of the Act is available to him in proceedings for recovery of tax brought in Court as well as in proceedings before the Special Commissioners, then a decision by the High Court on the question of limitation would prevent the Special Commissioners from deciding the same question as they would regard themselves as bound by the decision of the High Court thereby abdicating their fact finding function of determining whether there has been fraud or wilful default within the meaning of sub-section 3(a) of s. 91 of the Act. Alternatively, even if the Special Commissioners do not regard themselves as so bound, it could lead to inconsistent decisions by the High Court and the Special Commissioners on the identical question of limitation.” 94. It is also pertinent to comprehend that the section 106 ITA statutory characterisation of the sum assessed by the DGIR to be due and payable ‘under this Part’ does not give rise to a final judgment. It provides for an enforcement or recovery mechanism to meet the needs of collecting the sum due from the taxpayer first, while allowing adjudication of the debt on its merits to follow later. All this is in keeping with the ‘Pay first, dispute later’ system embedded in the ITA. 95. This construction is supported by the existence of section 99(1) ITA, the appeals procedure, which relates to a full adjudication of the sum assessed to be due and payable by the DGIR. Judicial power is thus preserved in the ITA for adjudication of the taxpayer’s dispute, notwithstanding an earlier collection mechanism. When this is considered in conjunction with the subsisting supervisory judicial powers of the Court, as well as the statutory entitlement of the taxpayer to a refund of any sum erroneously claimed or assessed, it follows that it cannot be said that judicial powers are abrogated or removed. Dispute resolution is simply deferred to enable collection first. In other words, the statutory ‘judgment’ created under section 106 ITA does not possess the character of a final judgment obtained after a full adjudication of the tax assessed to be due by the DGIR. 96. We have stated earlier that the purpose of the ITA as outlined in the Hansard is to ensure that there is full and speedy settlement of tax debts and that recalcitrant taxpayers do not utilise objections and the appeal procedure to defer payment of their taxes indefinitely. It is in the public interest that taxes are collected expeditiously and this is a relevant factor for the Court to take into account. The fact that the words ‘public interest’ are not literally utilised in either the ITA or the Federal Constitution does not mean that public interest is of no relevance. The Federal Constitution subsists in, and for, the public interest and the nation as a whole. The ‘Pay first, dispute later’ system certainly serves the public interest in terms of the fiscal needs of the public and the nation as a whole. OTHER JURISDICTIONS 97. The constitutionality of the ‘Pay first, dispute later’ system has been considered in other jurisdictions, directly and indirectly. CONSTITUTIONAL COURT OF SOUTH AFRICA METCASH TRADING LIMITED v THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE & ORS [CASE CCT 3/2000] (‘METCASH’) 98. In Metcash, the primary issue before the Constitutional Court of South Africa was whether sections 36(1), 40 (2)(a) and (5) of the South African Value-Added Tax Act 89 of 1991 (VAT 1991) were unconstitutional for limiting the right of access to courts protected by section 34 of the South Africa Constitution (SA Constitution). 99. Section 36(1) of the VAT 1991 in essence provided that payment of an assessment was not suspended by any appeal or pending the decision of a court of law. This provision evidenced the utilisation of the ‘Pay first dispute later’ system of tax collection, which is similar to ours. Their provisions in Part V of the VAT 1991 are analogous to our Part VII namely sections 103 – 106 ITA, which do not allow for a suspension of payment of the assessment due pending appeal or the institution of any other action (see sections 103(1), 103B and 106 ITA) (unless an exemption is granted by the DGIR). 100. Section 40(2)(a) of VAT 1991 empowered4 the Commissioner (equivalent to our DGIR) to enforce 4 These tax provisions were repealed after the case and replaced by the Tax Administration Act with new provisions. payment by filing a statement with a court which acts as a civil judgment in the following terms: “40. Recovery of tax. … (2)(a) If any person fails to pay any tax, additional tax, penalty or interest payable in terms of this Act, when it becomes due or is payable by him, the Commissioner may file with the clerk or registrar of any competent court a statement certified by him as correct and setting forth the amount thereof so due or payable by that person, and such statement shall thereupon have all the effects of, and any proceedings may be taken thereon as if it were, a civil judgment lawfully given in that court in favour of the Commissioner for a liquid debt of the amount specified in the statement. (Emphasis Ours). 101. Section 40(5) of the VAT 1991, which is closely analogous to our section 106(3), puts the correctness of the assessment beyond challenge in such proceedings. It stipulates: “(5) It shall not be competent for any person in proceedings in connection with any statement filed in terms of subsection (2)(a) to question the correctness of any assessment upon which such statement is based, notwithstanding that objection and appeal may have been lodged against such assessment.” 102. The salient facts of the case are that an assessment of R266 million was issued to Metcash by the Commissioner under the statute. Metcash objected to the assessment, but the Commissioner rejected the objection and required Metcash to make payment within 48 hours. Failure to pay would have led to the Commissioner implementing the summary procedure of filing a certificate in terms envisaged under section 40(2)(a) such that it would have the effect of a judgment. 103. Metcash, in response, approached the High Court on an urgent basis. The judge of first instance found that Sections 36(1), 40(2)(a) and 40(5) of the VAT 1991 were invalid by reason of their effective infringement of section 34 of the SA Constitution which guaranteed access to justice. And this was because the courts could not suspend the obligation to pay, while the Commissioner could. To that extent the judge concluded that these provisions excluded the power of a court of law to provide an aggrieved vendor with interlocutory relief irrespective of the merit or demerits of his case. 104. On appeal, the Constitutional Court of South Africa reversed the High Court and held that sections 36(1), 40(2)(a) and 40(5) of the Act did not infringe the constitutionally protected right of access to the courts and did not oust the jurisdiction of the courts. The Court dealt with each of these provisions in turn. 105. With respect to section 36(1) which held that the payment of an assessment is not suspended by an appeal under the VAT 1991 or the decision of a court of law, the Constitutional Court did not construe section 36(1) in vacuo, but considered its purpose in the context of Part V of their statute, which related to objections and appeals against the assessment by the Commissioner. It held that Part V which allowed inter alia, for proceedings before a ‘Special Court or Board’ and the subsequent resort to a court of law by way of an appeal, amounted to a statutory mechanism specially created for this type of administrative decision undertaken by a specialist panel. 106. Secondly it held that section 36(1) had to be looked at in its textual context and its plain wording which sought to serve ‘two separate but related objectives’: (i) to ensure that the disgruntled taxpayer paid their taxes and did not delay the same by pursuing remedies under Part V of their Act; and (ii) refunds for incorrect assessments would be made later. 107. It was in that context that the amount assessed could not be suspended by appeal or any other pending decision of a court of law. The common law practice of a suspension of execution by virtue of an appeal did not apply to the appellate procedure created under VAT 1991. It could not of itself have the effect of suspending payment. It was concluded that the non-suspension of the obligation to pay pending appeal only concerned the obligation of the taxpayer to pay first, notwithstanding demur, the assessed VAT chargeable under their statute. 108. It was further concluded that the refusal by the Commissioner to grant relief under section 36(1) could be subject to judicial intervention in certain circumstances. Therefore the fact that there was a relegation of the specialist subject matter to a special court did not in itself oust the jurisdiction of the courts. Moreover the Court considered that judicial review was not ousted. 109. Reverting to our case, in like manner, the provision for the specialist SCIT comprising a tribunal to deal with the objections and challenges of a taxpayer, cannot be said to amount to an ouster of the judicial power of a Court. The Act merely designates an independent and impartial tribunal to deal with the disputed tax case. The fact that there is a right of appeal to the entire hierarchy of the court system further puts paid to any contention that judicial power is ousted. 110. As for the treatment of a certified document of the sum assessed to be due by the Commissioner as a civil judgment, the Constitutional Court found that contrary to ousting the courts, the entire procedure requires the intervention of the court officials and legal rules and procedures relating to execution. It was held that it sets in train the execution process of the particular court under the ordinary civil process. So it cannot be said that judicial power is ousted. 111. Again when compared to the statutory mechanism for recovery and collection under the ITA in this jurisdiction, it is clear that contrary to ousting the jurisdiction of the courts, the courts are utilised to enable execution and recovery, in keeping with the need to collect tax first and dispute later. 112. Finally, as for section 40(5) which is analogous to our section 106(3) ITA, the South African Constitutional Court held that while it limited the basis on which an assessment could be challenged it did not prohibit litigation. Nowhere is the word ‘ouster’ utilised in the language of the sub-section. 113. In like manner there is nothing in section 106(3) that expressly ousts the judicial power or jurisdiction of the Court. More importantly as held in Metcash the language of section 106(3) is narrowly focussed on the correctness of the assessment. While our section stipulates that the Court shall not look at the correctness of the assessment, the then South African legislation precludes the taxpayer from questioning the correctness of the assessment. However, both achieve the same object in narrowing down the field of inquiry available to the taxpayer and the Court, at this juncture of the entire taxation process. 114. Additionally, similar to the situation in Metcash, defences other than those narrowly confined in section 106(3) ITA are left undisturbed by our Act. There may well be other procedural or substantive issues that can be utilised by the taxpayer in relation to the tax assessed to be due by the DGIR. 115. Moreover, the effect of section 106(3) is temporary. It must be borne in mind that the scheme of the Act allows for the aggrieved taxpayer to have recourse to a fair judicial determination in the course of his dispute with the DGIR through the hearing and adjudication before the specialist SCIT and subsequently the Courts. The judicial powers of review are not ousted. The DGIR retains wide powers to allow for payments by instalments, suspension and even exemption. Judicial intervention in terms of a stay is not ousted either. 116. The fact that there are statutory safeguards for restitution or repayment if the assessed sum is found to be incorrect, ensures that the taxpayer is ensured of his entitlement to a full judicial dispute resolution hearing, such that judicial power is neither suspended nor abrogated. 117. Metcash bears out the position in relation to our ITA that a system which is founded on a ‘Pay first, dispute later’ system, requires, as an essential part of the scheme, that payment is made first and liability deferred. To that extent the obligation to pay first as effected through sections 103, 103B and 106 ITA, provides for collection and recovery immediately upon assessment. 118. However, the obligation to pay and the limitation of available objections pertaining to the correctness of the assessment are limited in scope and temporariness, as these issues remain available to be ventilated under section 99(1) and Schedule 5 of the ITA. Judicial review is also not abrogated. Judicial intervention in the form of a stay is not prohibited. To that extent, it cannot be said that judicial power is negated or ousted. 119. In the context of the purpose and object of the Act, it bears reiterating that these provisions serve the public purpose in obtaining full and speedy settlement of tax debts. 120. Another relevant authority is that of Capstone 556 (PTY Ltd and Commissioner, South African Revenue Services, The Minister of Finance Case No: 26078/2010 which deals with the South African Income Tax Act 58 of 1962. It was held there that the filing of a certified statement under section 40(5) of their statute did not have “the rights determining character of a judicially delivered judgment”. Binns-Ward J further held: “Although a statement filed by the Commissioner in terms of section 91(1)(b) has all the effects i.e. consequences of a judgment it is nevertheless not in itself a judgment in the ordinary sense. It does not determine any dispute or contest between the taxpayer and the Commissioner. It has the effect of a judgment however, in enabling the Commissioner to obtain a writ to attach and sell in execution the taxpayer ’s assets to exact payment of an amount that is payable. ” 121. This statement, with respect, accurately reflects the nature of a section 106 ITA judgment obtained purely for the enforcement of an assessment by the DGIR. It is essential for the execution of the amount assessed to be due by the taxpayer under the ‘pay first dispute later’ system entrenched in our ITA. AUSTRALIA 122. The relevant case is Deputy Commissioner of Taxation v Danny Buzadzic; Deputy Commissioner of Taxation v Leisa Buzadzic [2019] VSCA 221 123. Here, the Deputy Commissioner of Taxation brought proceedings against Danny and Leisa Buzadzic (‘the Buzadzics’) seeking recovery of income tax for a nine-year period, including administrative penalties and interest charges. 124. Similar to the instant appeals, the Commissioner sought summary judgment against the Buzadzics on the basis that they had no real prospect of success under s. 61 of the Civil Procedure Act 2010 and r. 22.03 of the Supreme Court (General Civil Procedure) Rules 2015. 125. The Buzadzics challenged the constitutional validity of a number of statutory provisions. One was s. 175 of the Income Tax Assessment Act 1936 (Cth) (‘the 1936 Act’) which states that: “[t]he validity of any assessment shall not be affected by reason that any of the provisions of this Act have not been complied with.” (‘the no invalidity provision’) 126. The other was s. 350-10(1) item (2) of sch 1 to the Taxation Administration Act 1953 (Cth) (‘the TAA’) which provides that: “production of … a notice of assessment under a taxation law; … is conclusive evidence that … (a) the assessment was properly made; and (b) except in proceedings under Part IVC of [the TAA] on a review or appeal relating to the assessment—the amounts and particulars of the assessment are correct.” (‘the conclusive evidence provision’) 127. The Buzadzics also challenged the validity of s. 14ZZM of the TAA which states: “The fact that a review is pending in relation to a taxation decision does not in the meantime interfere with, or affect, the decision and any tax, additional tax or other amount may be recovered as if no review were pending.” 128. In summary, the Buzadzics argued that these provisions were contrary to the Constitution of the Commonwealth because they require the Supreme Court of Victoria to exercise judicial power in a manner which is inconsistent with the essential character of a court or with the nature of judicial power and they confer upon the taxing authority part of the judicial power of the Commonwealth, and further that those provisions operate to deny the defendant all rights to resist the pleaded assessments by proving in the Supreme Court of Victoria that the criteria of pleaded liability are not satisfied. 129. The applications for summary judgment were dismissed by a judge in the Trial Division on the basis that, if the provisions of the 1936 Act which the Commissioner relied on had the operation for which the Commissioner contended, they would ‘impermissibly confer judicial power’ on the Commissioner and ‘require the Court to act in a manner inconsistent with its position as a repository of federal judicial power’. 130. On appeal, the Court of Appeal of Victoria observed that the prospect of provisions operating in a harsh manner has long been acknowledged as reflective of a “legislative policy to protect the revenue against the prospect of taxpayers withholding payment and spending the proceeds on speculative appeals” and further held that the availability of review and appeal proceedings was fatal to the Buzadzics’ argument that the impugned provisions imposed an incontestable tax. 131. In relation to the recovery proceedings, the Court of Appeal of Victoria observed that: “[91] … the court must be satisfied of a number of matters before finding that an amount is due and payable. It must determine that the correct parties are before it and, based on relevant assessments, whether there is a tax-related liability and the amount of such a liability. It may also need to consider a prima facie certificate under s 255-45 of sch 1 to the TAA, under which issues of valid service and the amount outstanding may be addressed... the fact that some or all of the matters in issue may readily be determined because of the ease of their proof does not deprive the process of its judicial character.” 132. The Court of Appeal of Victoria further held that: “[95] … The rule of law is satisfied, not only because the court applies the law to the question whether the statutory debt is established in a particular case, but also because there is elsewhere provided full opportunity for challenging the underlying assessment by way of review or appeal. … [98] … The assessment is not an exercise of judicial power. It provides the foundation for the creation of a statutory cause of action and the court exercises judicial power to decide whether the conditions for the creation of that cause of action have been established.” HONG KONG 133. Next, in The Commissioner of Inland Revenue v Shelcore Hong Kong Limited [2011] HKCU 143, the issue confronting the Hong Kong District Court was whether section 75 of the Inland Revenue Ordinance (IRO) curtailed the Court's judicial power to hear defences against incorrect or excessive tax assessments in contravention of Article 35 of the Basic Law (‘BL’) and Articles 10 and 22 of the Bill of Rights Ordinance (‘BORO’). 134. Section 75 of the IRO is not in pari materia with section 106(3) of the ITA, but it is substantially similar in effect. It reads as follows: “(1) Tax due and payable under this Ordinance shall be recoverable as a civil debt due to the Government. (2) Whenever any person makes default in payment of tax the Commissioner may recover the same by action in the District Court notwithstanding that the amount is in excess of the sum mentioned in section 33 of the District Court Ordinance (Cap 336) (3)... (4) In proceedings under this section for the recovery of tax the court shall not entertain any plea that the tax is excessive, incorrect, subject to objection or under appeal, but nothing in this subsection shall be construed so as to derogate from the powers conferred by the proviso to section 51 (4B) (a) to give judgment for a less sum in the case of proceedings for the penalty specified therein.” 135. The Hong Kong District Court held that the fact that the adjudicating tribunal’s decision was subject to subsequent judicial control meant that there was no violation of the Basic Law and BORO. 136. The District Court further held that revenue law is a specialized area of law, wherein the Board of Review is a quasi-judicial tribunal established by law which is independent from the Commissioner of Inland Revenue. The judgment emphasized that taxpayers retain the right of access to court, where objection to the assessment is dealt with by the Board of Review and the High Court and objection to the tax is dealt with by the District Court. GHANA 137. In Kwasi Afrifa v Ghana Revenue Authority (Reference No.J6/02/2022) (‘Kwasi Afrifa’), the Supreme Court of Ghana had to consider the question of whether section 42 (5) of the Revenue Administration Act, 2016 (Act 915) is inconsistent with and violates the constitutional right to administrative justice guaranteed under Article 23 of the Ghana Constitution 1992. 138. The impugned Section 42(5) states as follows: “(5) An objection against a tax decision shall not be entertained unless the person has; (a) in the case of import duties and taxes, paid all outstanding taxes including the full amount of the tax in dispute; and (b) in the case of other taxes, paid all outstanding taxes including thirty percent of the tax in dispute”. 139. The Supreme Court of Ghana held that the provisions did not contravene the constitutional right to administrative justice under Art 23 of the Ghana Constitution 1992. 140. In doing so, the Ghanaian Supreme Court observed that the structure of Act 915 which contains avenues for the taxpayer to challenge the decision of the tax authority such as empowering the Commissioner General to waive, vary or suspend the requirements of section 42 (5) pending the determination of the objection or take any other action that the Commissioner General considers appropriate including the deposit of security, and allowing appeals to be made to the Tax Appeals Board, did not oust the jurisdiction of the court as such avenues did not preclude the taxpayer from exercising his constitutional right to seek redress for judicial review. 141. The Supreme Court of Ghana was faced with a similar question of law in the case of Richard Amo-Hene v Ghana Revenue Authority & Ors (Writ No. J1/08/2021). The issue was whether: (i) Section 42(5)(b) of the Revenue Administration Act, 2016 (Act 915) which requires a taxpayer to pay all outstanding taxes including 30% of the tax in dispute (in the case of other taxes) before an objection to a tax decision can be entertained by the Commissioner General; and (ii) Order 54 rule 4(1) of the High Court (Civil Procedure) Rules, 2004 (C.I 47) which stipulated that the High Court will not entertain an appeal against a tax assessment unless the aggrieved person has paid 25% of the disputed tax in the first quarter of that year of assessment as contained in the Notice of Assessment violated the presumption of innocence and a person’s right of access to the court guaranteed under articles 2(1), 17(1), 19(2)(c), 33(1) & (5), 125(2), 130(1), 132, 133(1) and 140 of the Constitution of Ghana, 1992. 142. In answering this issue, the majority view adopted the reasoning from Kwasi Afrifa, holding that the presence of dispute resolution provisions under Act 915 subjecting tax decisions to objection, judicial review and appeal meant that the tax regime passed the test of constitutionality. 143. From the foregoing we conclude that neither section 106(3) nor the other subsections of section 106, 103 in its entirety, taken in the context of the ITA, have the effect of ousting, suspending, or abrogating judicial power. On the contrary when read in context and purposively it allows for judicial intervention and judicial process to take its full course. 144. It bears repeating that the ITA allows for: (a) An appeal process which subsequently leads to a full appeal before the hierarchy of the Courts of Malaysia; (b) The grant of a stay at the discretion of the Courts exercising judicial power; (c) The right of judicial review which is not ousted by the ITA. 145. Therefore it is only in relation to the immediate collection and recovery of tax due and payable under the ITA, that the Court undertakes a recovery function in order to give effect to the purpose and object of the ‘Pay first, dispute later’ model of tax adopted in this jurisdiction. This cannot amount to a negation, abrogation or suspension of judicial power which may be exercised in all the circumstances set out in (a), (b) and (c) above. It therefore follows that section 106(3) ITA passes the constitutional test and cannot be invalid or unconstitutional. 146. We further conclude that neither section 106(3) ITA nor the other subsections of sections 106 and 103 in its entirety, taken in the context of the ITA, have the effect of ousting, suspending, or abrogating judicial power. On the contrary when read in context and purposively it allows for judicial intervention and judicial process to take its full course, as we have explained at length above. Judicial power under the Federal Constitution is left intact, and accordingly section 106(3) is not unconstitutional. 147. Having analysed and considered the statutory provisions and scheme contained in the ITA we are in a position to answer Questions 1, 2 and 4. (a) Question 1: Whether section 106(3) of the Income Tax Act, 1967 contravenes Article 121 of the Federal Constitution? Answer: No, it does not contravene Art. 121 of the Federal Constitution. (b) Question 2: Whether section 106(3) of the Income Tax Act 1967 is unconstitutional and/or ultra vires as it usurps the judicial power of this Honourable Court guaranteed by Article 121 of the Federal Constitution? Answer: Question 2 is effectively the same as Question 1. The answer is that section 106(3) is not unconstitutional as it does not usurp the judicial power of the Courts guaranteed by Art. 4(1) and Art. 121 of the Federal Constitution. (c) Question 4: Whether Article 121 of the Federal Constitution, which guarantees the judicial power of this Honourable Court, is relevant in the determination of civil recovery proceedings in tax matters (including in summary judgment proceedings therein)? Answer: Yes, Art. 121 of the Federal Constitution which relates to the existence and exercise of judicial power is relevant in the determination of civil recovery proceedings in tax matters. Judicial power is not ousted by the recovery proceedings initiated under sections 103 and 106 ITA which comprise Part VII of the Act and ensure recovery first prior to the full ventilation of the taxpayer’s disputes in relation to the assessment of the DGIR. The determination or adjudication of such disputes are fully provided for in section 99(1) and Schedule 5 ITA as well as vide the powers of judicial review enjoyed by the Courts. QUESTIONS OF LAW IN CATEGORY 2 148. We now turn to Questions 3, 5 and 6 which pertain to summary judgment. (a) Question 3: Whether, by reason of Sections 103 and 106(3) of the Income Tax Act 1967, this Court is wholly prevented from considering whether or not there are triable issues and/or some other reason warranting a trial (within the meaning of Order 14 Rule 1 and Order 14 Rule 3 of the Rules of Court 2012), before deciding whether or not to give judgment in favour of the Plaintiff, despite the fundamental liberties, rights and powers enshrined in, inter alia, Articles 5, 8 and 121 of the FC? (b) Question 5: Whether Order 14 Rule 3 of the Rules of Court 2012, which provides that a Summary Judgment application may be dismissed if a Defendant can show “some other reason” for a trial to be held, applies in civil recovery proceedings in tax matters? (c) Question 6: Whether in instances of manifest and obvious errors in calculation of a tax assessment, a court is entitled by virtue of its inherent and judicial powers to consider a Defendant’s defence of merit to dismiss or set aside an application for Summary Judgment by a Plaintiff and order full trial on the matter? 149. The ITA has a specific series of statutory provisions for the collection and recovery of the tax assessed to be due by the DGIR. These provisions are contained, as stated above, under sections 103 - 110 of Part VII of the ITA entitled ‘Collection and Recovery of Tax’. It is not in dispute that this jurisdiction, like many others, operates on a ‘Pay First, dispute later’ design of tax imposition as established by Parliament under the ITA. 150. It is noteworthy that the questions posed by the Appellants relate solely to Part VII on recovery and collection. These questions focus on the rules of civil procedure relating to the recovery of debts in general, rather than the recovery of tax imposed under the specific provisions of the ITA read as a whole. 151. There is a presumption made, both by the Inland Revenue and the Appellants that the only means of enforcement available is under Order 14 of the Rules of Court 2012. However, Order 14 envisages the Court undertaking a final determination as to whether an amount is payable or due. This means that the Court considers and ascertains whether a debt exists. 152. But under the ITA, sections 103 and 106 specify statutorily, for purposes of collection and recovery only, that upon assessment, the sum assessed is due and payable upon the lapse of a specified period of time. It becomes a statutory debt or a debt created by statute. 153. Section 103(1) provides: “Except as provided in sub-section (2) tax payable under an assessment for a year of assessment shall be due and payable on the due date whether or not that person appeals against the assessment.” 154. The section provides for two separate matters: (a) That by statute the sum becomes due and payable on the due date; (b) That notwithstanding the taxpayer’s right of appeal, the sum becomes due and payable. 155. In other words, while the process of appeal is pending the tax becomes due, putting into effect the ‘Pay first, dispute later’ system that defers the dispute but requires immediate payment. This is an essential aspect of expeditious and efficient collection of tax which is required to enable the nation to function effectively. Therefore, notwithstanding the taxpayer’s right to challenge the tax assessed through the SCIT and subsequently the hierarchy of the courts, payment is not deferred. Any seeming ‘inequity’ is met by the guaranteed right of repayment under the Act. 156. The deferral of the challenge or dispute as to the tax assessed is further borne out by section 103B which provides: ‘The institution of any proceedings under any other written law against the Government or the Director General shall not relieve any person from liability for the payment of any tax, debt or other sum for which he is or may be liable to pay under this Part. 157. The Hansard in relation to section 103B states that the Government aims to ensure fair treatment between those who pay their taxes on time and those who do not. The latter group while seeking to challenge the tax assessed, are nonetheless required to make payment first while the challenge is deferred, because it would be unfair to those who pay their taxes on time if the latter category of taxpayers were accorded a longer time to meet their tax responsibilities simply by reason of their challenge (see: Penyata Rasmi Parlimen, Dewan Rakyat, (Parliamen Keempat Belas, Penggal Ketiga, Mesyuarat Ketiga, 16 December 2020), Vol. 54, at 26). 158. As stated earlier, the tax assessed is, by way of statute, a debt due from the taxpayer to the Government. The section statutorily deems the sum assessed to amount to a debt recoverable in civil proceedings. The purpose, again is to facilitate recovery of the sum assessed. 159. And to facilitate recovery section 106(3) limits the type of challenge that can be made at this juncture, i.e. temporarily. The right to raise those challenges and have them adjudicated upon is neither ousted or prohibited, as the ITA provides for such challenges to be taken vide the prescribed mode of appeal under Part V. 160. What this all means in relation to recovery is that the ITA does not envisage a full-blown ventilation of all possible challenges to be determined at this stage of the tax process. It serves to ensure timely recovery and collection of tax due, while deferring the challenge to a later date. And this is where the utilisation of Order 14 of the Rules of Court 2012 (ROC 2012) gives rise to confusion. 161. Order 14 provides a summary basis for the collection of a debt in dispute. It provides a comprehensive mode of shortening the full litigation procedure by allowing, in suitable cases, for matters to be adjudicated upon fully, without the necessity for a full trial and witnesses. If the defendant to the summary judgment application however raises a ‘triable’ issue the matter then proceeds to trial. Whether judgment is granted summarily or judgment is granted after a full trial, the full merits and rights of the parties are litigated and the judgment handed down, is final in nature. 162. If a tax recovery ‘debt’ as statutorily provided for under section 106 is subjected to the procedure under Order 14 ROC 2012, then the entire purpose and object of the ITA, which provides for a deferral of the full dispute to a later date under the adjudicatory process prescribed under the Act, is not met. 163. Even where there is no ‘triable issue’ found, it must be remembered that the character and effect of the judgment granted under Order 14 is final. However, under sections 103 and 106 the nature of the relief sought for purposes of recovery is plainly interim in character. 164. The use of the Order 14 procedure gives rise to a situation where, if the recovery process is found to give rise to ‘triable issues’, it will result in a full-blown trial which examines the veracity of the statutory debt under section 106. Bearing in mind that the section provides for this statutory debt to be due and owing for the purposes of recovery only, and not with finality, the use of a summary process which seeks to allow for a full determination of whether the sum is due and payable, is not ideal given the purpose and object of the ITA. 165. Once the statutory section 106 debt is subject to a full-blown trial, there cannot be another or second attempt at litigation under section 99(1) ITA as that would give rise to res judicata and/or issue estoppel. Therefore the entire purport and effect of the ITA would be thwarted by a full trial under the Order 14 civil procedure under the Rules of Court 2012. This is in accord with the older case-law which stipulates that such defences are to be remitted to the equivalent of the then SCIT and not considered by the Courts. To that extent there was appreciation of the fact that judgment under section 106 ITA was for purposes of ensuring payment of taxes first while disputes were adjudicated later. 166. This then warrants the question whether Order 14 is indeed the ideal mode to adopt in the course of recovery proceedings under section 106 ITA. It would seem from a perusal and construction of the Act in toto, that the procedure set out in section 106 ITA itself provides sufficient basis for recovery to be initiated in the civil courts by way of originating summons. The Court is then able to ascertain whether: (a) An assessment has in fact been made in the form prescribed under the Act; (b) Whether the tax assessed is due as the relevant time accorded for payment has lapsed; (c) Whether the DGIR has accorded an exemption or provision for payment by instalments or reached some other agreement with the taxpayer which would warrant the Court refusing to grant judgment. 167. This means that section 106 ITA is given its full effect for the purpose of recovery while simultaneously allowing the taxpayer to proceed with his challenge vide section 99(1) of the ITA. 168. The ITA allows for full judicial intervention and adjudication vide Part VI. Additionally, from a constitutional viewpoint, the right of judicial review, as well as an entitlement to a stay premised on the exercise of judicial discretion, remains. 169. To reiterate, the enforcement provisions in section 103 and 106 are themselves premised on the exercise of judicial power, so it cannot be said that judicial power is in any way ousted. There is merely a temporary restriction of the taxpayer’s rights of challenge, which are deferred while allowing for payment first. The Courts’ powers remain unaffected. So when section 106(3) provides that the Court shall not consider certain defences relating solely to the tax assessed, it is the taxpayer’s right to raise these issues at that juncture that is deferred, NOT curtailed. The Court’s powers remain untouched as explained above. 170. It is worth reiterating paragraph 38 of Capstone Pty Ltd (supra) where Binns Ward J stated: “Once it is accepted that the filing of a statement in terms of section 91(1)(b) is nothing more than an enforcement mechanism, as distinct from a means of determining liability, there is no basis for distinguishing it from any of the other recovery mechanisms… ...It seems to me that the learned judge went awry in Mokoena by apparently regarding the filing of a statement in terms of s91(1)(b) as having the rights-determining character of a judicially delivered judgment. It plainly does not...” 171. In like manner the judgment obtained under section 106 using the summary judgment procedure, does not have a rights-determining or liability-determining character, as it merely allows for recovery first for the purposes of enforcement or execution. It serves to give effect to the ‘Pay first, dispute later’ scheme in the ITA. 172. Even if a summary judgment procedure is adopted, the curtailing of the defences available as provided for in section 106(3) ITA and arguably, section 103(1) ITA and 103B ITA, means that the issues there remain unavailable for adjudication by the Court. This is because those matters would still comprise the subject matter of any appeal under section 99(1) ITA. Alternatively judicial review in exceptional cases is also available. 173. We are now in a position to answer Questions 3, 5 and 6. (a) Question 3: Whether, by reason of Sections 103 and 106(3) of the Income Tax Act 1967, this Court is wholly prevented from considering whether or not there are triable issues and/or some other reason warranting a trial (within the meaning of Order 14 Rule 1 and Order 14 Rule 3 of the Rules of Court 2012), before deciding whether or not to give judgment in favour of the Plaintiff, despite the fundamental liberties, rights and powers enshrined in, inter alia, Articles 5, 8 and 121 of the Federal Constitution? (b) Question 5: Whether Order 14 Rule 3 of the Rules of Court 2012, which provides that a Summary Judgment application may be dismissed if a Defendant can show “some other reason” for a trial to be held, applies in civil recovery proceedings in tax matters? Answer: No, it does not for the reasons we have stated. Pursuant to the ‘Pay first, dispute later’ scheme under the ITA, it follows that the recovery of the sum assessed at this stage is not final and the dispute will be heard by the SCIT and subsequently the Court under the ‘Pay first, dispute later’ system. 174. As we have reasoned, the claim for judgment by the Inland Revenue is premised on the characterisation of the sum assessed to be due as tax, under section 106(1) as a statutory ‘debt’. This is for the purposes of recovery and execution only. The judgment obtained under section 106 is not a rights-determining judgment of finality. The taxpayer’s right of challenge is not abrogated, as that right is preserved under section 99(1) ITA as well as judicial review. 175. Therefore the ‘some other reason’ for a trial to be held under Order 14 does not apply as a basis on which to enforce this statutory debt created by the taxing statute to enable payment to be made first, pending any challenge or dispute as to the sum assessed, which is effectively deferred under the statute. If it is found under the Order 14 procedure that the matter should go to trial it would render the method prescribed under the Act for adjudication, nugatory. The Act should be construed such that the various sections are harmonious and provide a coherent structure for income tax collection. 176. Therefore the use of other ‘some other reason for trial’ should not be invoked. It is not tenable for a section 106 debt to be determined finally at trial, if the taxing statute also prescribes a specific manner of challenging the tax assessed, as is the case under the ITA. We have explained above in the body of the judgment that such a judgment does not enjoy the characteristics of a judgment issued after a full exercise of the Court’s dispute resolution powers. It is a judgment handed down for the purposes of collection, i.e. to enable recovery first, while the dispute is deferred. It does not enjoy the rights-determining character of finality which is to be found in a judgment delivered after full adjudication in a court of law. 87 177. All challenges pertaining to those matters set out in section 106(3) or otherwise may be fully dealt with under the appeals portion of the ITA in Part VI, Section 2 which allows the taxpayer to ventilate all these issues. Further the remedy of judicial review in an appropriate case is also available. All this ensures that the taxpayer is accorded his ‘fundamental liberties rights and powers in Article 5 and Article 121’. 178. In short, a judgment granted under section 106 is treated as a civil judgment lawfully given in favour of the Inland Revenue for the purposes of collection and recovery only. 179. Enforcement may involve a writ of seizure and sale or garnishment of any amount due, and if the sum assessed is found to be erroneous after the merits of a dispute have been dealt with in full under the section 99(1) challenge, the over-assessed portion will be refunded to the taxpayer. With the latest amendments to the ITA, such a refund will carry interest (see: section 111D ITA). To that extent, the filing of civil proceedings in terms of section 106(1) is nothing more than an enforcement mechanism and is distinct from a means of determining liability. 180. To this end, the DGIR and all authorised officers are designated as public officers to undertake proceedings under the section. This section provides support for the position that any proceedings instituted should be under section 106. 181. It should be borne in mind that the statute that allows for recovery of tax is the ITA, and not the Rules of Court 2012, more particularly Order 14. The latter provides a means of recovery of a disputed debt and envisages the determination of liability in full, either summarily or after a full trial if there is a ‘triable’ issue. Consequentially, it allows for a final judgment after determining liability between the parties. 182. The section 106 ITA recovery mechanism under the ITA does not require such a final judgment, as we have explained at length. 183. Accordingly, it is the remedy prescribed by statute that must prevail, not the procedure to recover a debt under the Rules of Court 2012. Therefore the statute should be accorded effect by allowing for the recovery or enforcement process under section 106 ITA to be followed. THE USE OF THE SUMMARY JUDGMENT PROCEDURE OVER THE YEARS 184. The bulk of the case-law relating to tax cases discloses that summary judgment has been the mode adopted to recover the tax assessed as a statutorily-deemed debt under section 106(1) ITA. If a summary judgment procedure is adopted as was the case in the present Appeals in the courts below, the purpose and intent of the ITA does not envisage the Court undertaking a rights-determining trial under section 106 ITA for the reasons explained above. In both appeals here, a summary judgment to obtain recovery of the debt, was adopted by the Inland Revenue and the defences put up by the Appellants dismissed. The Courts below recognised that the merits of the dispute were properly to be determined under section 99(1) ITA. Effect was correctly given to section 106(3) ITA. 185. As such we are of the view that the result reached by the Courts below is entirely correct, in that enforcement was facilitated by the grant of judgment under section 106 ITA. The fact that the Courts below did not analyse the Act in its entirety to arrive at the conclusions we have, in relation to Order 14 and the ITA, does not detract from the correctness of the end result. And that end-result was to dismiss all defences pertaining to matters arising under section 106(3) ITA. In any event we have previously concluded that section 106(3) ITA is constitutional and does not have the effect of usurping judicial power. So the application of the same by the Courts below cannot be faulted. 186. Having examined the defences put forward by the Appellants, we concur that the defences stipulated there do not warrant examination under the ITA at this juncture. These defences, if raised, are to be the subject matter of full ventilation before the SCIT and after that, the High Court on points of law. As the judgment does not finally dispose of or determine the rights and entitlements of the taxpayer, the taxpayer is not prejudiced. He is however required to make the payment, or arrange for payment to be made in instalments or to reach an agreement with the DGIR on the settlement of the tax due, pending a full adjudication of the matter. 187. The courts in the older cases relating to section 106 ITA did not consider the implications of utilising the summary judgment procedure under Order 14 compared to the statutory provisions relating to the recovery of the tax assessed under section 106 and 103. In point of fact, the suitability of the Order 14 process was not considered at all. The focus was on the availability of another avenue of appeal within the statute to mount a challenge against the tax assessed as being a due. As there was another mode of appeal, it was not necessary to raise these challenges in the recovery proceedings. In short, the mode of recovery of the tax assessed was not the focal point of consideration. The recovery of the tax assessed to be due by civil proceedings, was equated with recovery by way of Order 14. 188. In Comptroller of Income Tax v A Co Ltd. [1966] 2 MLJ 282 Choor Singh J summed up the law, and this was relied upon by Gill FJ in Sun Man Tobacco: “…The scheme of the Income Tax Ordinance is that if any person disputes the assessment, he may apply to the comptroller to review and revise the assessment made upon him. If the comptroller refuses to amend the assessment, the aggrieved taxpayer may appeal to the Board of Review … and the board may, after hearing the appeal, confirm, reduce, increase or annul the assessmen or make such order thereon as to it may deem fit. ... A taxpayer has no right to by-pass the Board of Review and take his complaint direct to Court. And when the Comptroller of Income Tax sues a taxpayer to recover tax due under a notice of assessment, the taxpayer cannot be heard to say that the assessment on which tax has been levied was not made in accordance with the provisions of the Ordinance. Such a complaint must in the first instance be laid before the Board of Review. The provisions of Order XIV of the Rules of the Supreme Court must be read together with the provisions of the Income Tax Ordinance. If this is not done every unwilling taxpayer will refuse ot pay tax and when sued in court, will challenge the merits of the assessment, thus causing considerable delay in the collection of tax. ...” 189. This sums up the approach taken in the older cases where the matter of ‘triable’ issues were required to be laid before the then Board of Review, now the SCIT. But in this challenge the Appellants have questioned the constitutionality of section 106(3) ITA, which they allege usurps the Court’s power to determine a matter finally under Order 14 ROC 2012. And this is answered by a construction of the recovery section of the ITA under Part VII, which clearly envisages a judgment to be obtained pursuant to section 106 ITA to facilitate enforcement, thus ensuring the tax is paid first and the dispute is dealt with later. 190. As such, the O. 14 process should not override or supersede the statute-created process outlined in sections 103 and 106 ITA, which is for purposes of recovery and enforcement only. 191. We now turn to answer Question 6. Question 6: Whether in instances of manifest and obvious errors in calculation of a tax assessment, a court is entitled by virtue of its inherent and judicial powers to consider a Defendant’s defence of merit to dismiss or set aside an application for Summary Judgment by a Plaintiff and order full trial on the matter? Answer: In like manner this question centres on dismissing or setting aside a summary judgment which for the reasons set out above ought not to evolve in such a manner. 192. If indeed there is a defence of merit which a defendant is unable to ventilate by reason of section 106(3) at the collection and recovery juncture, then this can still be undertaken vide the appeals process under section 99(1) ITA. There is no necessity for the Court to resort to its inherent powers or ‘judicial powers’ when those powers are clearly preserved under the ITA because a section 106 proceeding does not require the Court to undertake or utilise its powers to determine the liability of the taxpayer. These provisions, namely section 106 and section 103 allow for recovery or execution, pending the dispute being heard on its merits. QUESTIONS OF LAW IN CATEGORY 3 193. We shall now proceed to answer Questions 7 and 8. (a) Question 7: Whether the Judicial Power of the Federation that is vested in the High Court, Court of Appeal and Federal Court may be suspended and/or abrogated in a Tax recovery suit filed under section 106(1) of the Income Tax Act 1967 on the basis of section 106(3) of the same Act? (b) Question 8: Whether the Judicial Power of the Federation vested in the High Court, Court of Appeal and Federal Court may be suspended and/or abrogated in a Tax recovery suit filed under section 106(1) of the Income Tax Act 1967 on the grounds that an appeal to the Special Commissioner of Income Tax has been filed under section 99 of the Income Tax Act 1967? Answer: We have answered these questions above in relation to Questions 1, 2 and 4. 194. As we have explained in the course of this judgment there is no question of judicial power being suspended or abrogated as is suggested in Questions 7 and 8. Such a conclusion is untenable and does not arise when the ITA is construed holistically and purposively. 195. Once again we reiterate that a perusal of the relevant sections bear out the fact that the recovery provided for under sections 103 and 106 are purely for enforcement purposes. The judgment thus obtained is not final in nature as any instituted appeal remains to be determined in terms of whether such liability exists. 196. Judicial power continues to reside with the Courts, which are required under the statute to exercise their full judicial powers after the SCIT, as a specialist tribunal, has heard and decided on the tax appeal put forward by the taxpayer. To reiterate, the right to have the taxpayer’s dispute heard in full, is simply deferred, to enable payment to be made first by way of recovery. 197. Finally, as other forms of judicial intervention are not ousted, the right to seek a stay or to resort to judicial review (which require exceptional circumstances) remains. 198. To that extent the questions put forward fail to appreciate the design and operation of the taxing statute as a whole. It is only if a grammarian construction is adopted in relation to sections 103 and 106 ITA in vacuo, such that no regard is accorded to the context in which those provisions sit within the ITA read as a whole, that such a conclusion can be reached. If, conversely, the tax statute is read in its entirety, bearing in mind that it prescribes a ‘Pay first, dispute later’ scheme, it will be clear that the judgment under section 106 serves to facilitate recovery for purposes of enforcement at this juncture only. 199. We now answer Question 9. (a) Question 9: Whether a Defendant’s defence as to the Plaintiff’s conduct of bad faith, mala fide, oppression, unconscionability, irresponsibility, unreasonableness and/or abuse of process falls within the scope of section 106(3) of the Income Tax Act 1967, and whether the Courts are entitled to consider such a defence as a triable issue and/or some other reason warranting a trial in the context of civil recovery proceedings in tax matters (including in summary judgment proceedings therein). Answer: This question asks in effect whether bad faith, mala fides, oppression, unconscionability and unreasonableness or abuse of process fall within the purview of section 106(3) of the ITA. 200. For the reasons we have set out in detail above it follows that such issues are not properly dealt with under the statutory section 106 ITA civil proceedings, which are for purposes of recovery and execution only. 201. There is however nothing to stop the taxpayer from pursuing these matters under the appeals process in section 99(1) to the SCIT and the subsequent appeals on matters of law to the High Court and the appellate Courts. Moreover, judicial review is available in exceptional circumstances. 202. Therefore the answer is no. THE ARTICLE 5 ARGUMENT 203. The present arguments in these appeals relate to the constitutionality of a specific provision in the ITA in relation to its alleged contravention of Art. 121 FC and seeks the remedy afforded in Art. 4(1) FC. Nonetheless, it is important to outline the features of the Federal Constitution that allow for the promulgation of valid tax laws. The ITA is validly promulgated pursuant to the Federal Constitution. The constitutional power of Parliament to make laws imposing taxation is set out in Art. 96 of the Federal Constitution: “96. No tax or rate shall be levied by or for the purposes of the Federation except by or under the authority of federal law.” 204. It is evident that the constitutional power of Parliament to make laws imposing taxation is wide. However, all power is subject to constraints as was recognised inter alia in Pengarah Tanah dan Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd [1979] 1 MLJ 135. 205. Amongst these constraints is the ability of a citizen to contest the tax levied on him. Legislation which deprives the citizen of this ability would be contrary to, inter alia, Art. 5(1) FC. In other words, the assessment of the DGIR should be contestable otherwise it would result in the onerous and oppressive consequence of citizens being subject to an administrative assessment without recourse. And such an administrative power if allowed unchecked would attack the very validity of the law under the Federal Constitution. 206. As explained above, the ITA does allow for the challenge and contestability of tax imposed, by providing for recourse to the Courts or the exercise of judicial power. Firstly the ITA expressly allows for such a contest through its appeals procedure in section 99(1). 207. Secondly, the Federal Constitution provides firstly for constitutional judicial review in Art. 4(1) FC. This is the judicial power of the Court to read down or strike out legislation where it is not in conformity with the provisions of the Federal Constitution. This is seen in the present appeals where the very validity of a statutory provision is challenged in the course of an appeal from summary judgment proceedings. 208. Further, the High Court under the Schedule to subsection 25 (2) of the Courts of Judicature Act 1964(‘CJA’) delineates the additional powers of the High Court apart from those provided under Art. 121. This makes reference to the prerogative writs of certiorari, mandamus and prohibition: 1. “Prerogative writs Power to issue to any person or authority directions, orders or writs, including writs of the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any others, for the enforcement of the rights conferred by Part II of the Constitution, or any of them, or for any purpose. “ 209. These prerogative writs afford remedies by which the superior Courts are empowered to ensure that statutory bodies and inferior tribunals conform with provisions of the Federal Constitution and the legislation pursuant to which these entities exercise their powers. It checks abuses of power, and unbridled exercise of statutory power by officials of the government who carry out their duties under specific legislation or other statutory powers. It ensures that these bodies, acting through their officials, adhere to the rule of law. And administrative judicial review achieves this by affording the remedies of the prerogative writs in their many forms to aggrieved individuals or groups. 210. The CJA confers the jurisdiction to the High Court, in the exercise of its discretion, to afford such prerogative remedies in appropriate cases. The mode of obtaining such relief is the process of administrative judicial review. 211. In short, the exercise of taxing powers by the Inland Revenue which is administrative in nature is subject to judicial review, both constitutional (where the validity of a specific provision is challenged) and is also amenable to administrative judicial review. However, the grant of these reliefs is rare. In most cases the remedies afforded by judicial review are rarely, if ever granted, largely because a more convenient or satisfactory remedy is available. As in the present appeals, where section 99(1) ITA provides a specialist tribunal to assess and determine the taxpayer’s grievance and which result is susceptible to appeal and review before the superior Courts. 212. The availability of judicial review in tax is cases is generally confined to rare cases where for example, what is said to be an assessment is not in fact an assessment (see: Andrew Chew Peng Hui, Tax Appeals in Malaysia: Law and Procedure, (Malaysia: Thomson Reuters, 2021) at 181). In exceptional cases review may be available in cases of deliberate maladministration. It is incumbent on the taxpayer to establish exceptional circumstances of a kind which result in the assessment falling outside the scope of assessments as provided for in section 106 of the ITA. 213. What is not permissible is allowing collateral challenges to assessments through judicial review, when the appeals procedure is the proper mode to be adopted. This can give rise to abuse of the remedy, by the use of the same to put forward disguised challenges to quantum or the basis of assessment, all of which can and should be more properly dealt with under section 99(1) ITA and the appeals process. Judicial review is liable to be utilised as a tactic sought by taxpayers to delay the statutory processes in the Act, until the judicial review proceedings are complete. This may be dealt with by provision for the review and statutory appeals to the High Court to be dealt with together, but inevitably there will be delay. Therefore judicial review is not to be lightly filed and where it is used as a delay tactic, it is clearly an abuse of the court process and should be dealt with accordingly. 214. For these reasons, contrary to the Appellants’ and amicus curiae’s submissions on this point, we are of the considered view that section 106(3) ITA is constitutional and cannot be said to encroach upon judicial power nor contravene Art. 5(1) FC in terms of the right to a fair trial or access to justice. As we have rationalised, judicial power is inherent in the taxation process and is neither abrogated, removed nor suspended. THE ARTICLE 8 ARGUMENT 215. The Appellants also complain that section 106(3) ITA puts them on an unequal footing with the Respondent as it confers wide powers on the latter in respect of tax matters and is consequently violative of the Appellant’s right to equal treatment under Art. 8 FC. This view is shared by amicus curiae. 216. The law in relation to Art. 8 FC has to be applied with considerable prudence and vigilance. As mentioned earlier, the government enjoys a wide latitude in formulating approaches for the execution of fiscal and economic policy. Judicial intervention within this sphere should be exercised sparingly contingent upon statutory provisions or constitutional imperatives. 217. The rationale for such judicial deference in tax matters is explained by Durga Das Basu, Commentary on the Constitution of India, Vol. 2, 9 th ed, (India: LexisNexis, 2019), at 2306-2307 in the following terms: “Taxing statutes enjoy more judicial indulgence because picking and choosing within limits is inevitable in taxation. The principle of classification is applied somewhat more liberally in the case of a taxing statute. In Khandige v Agricultural ITO AIR 1963 SC 591, the Supreme Court said that in view of the inherent complexity of fiscal adjustment of diverse elements, permit a larger discretion to the legislature in the matter of classification, so long as it adheres to the fundamental principles underlying the said doctrine. The power of the legislature to classify is of “wide range and flexibility” so that it can adjust its system of taxation in all proper and reasonable ways. In a subsequent decision, it was observed “when the power to tax exist, the extent of the burden is a matter for discretion of the lawmakers. It is not the function of this court to consider the propriety or justness of the tax or enter upon the realm of legislature policy. If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied. (see: Hoechst Pharmaceuticals Ltd v State of Bihar AIR 1983 SC 1019; Satnam Overseas (Export) v State of Haryana & Anr (Case No. Appeal (Civil) 11174 of 1995)” 218. Furthermore, the court will not ordinarily interfere with the choice of the Legislature in matters pertaining to the mode and manner of recovery of taxes (see: Durga Das Basu, Commentary on the Constitution of India, Vol. 2, 9th ed, (India: LexisNexis, 2019), at 2309). 219. Art. 8(1) of the Federal Constitution provides that: “All persons are equal before the law and entitled to the equal protection of the law.” 220. Art. 8(1) of the Federal Constitution means that a law may not discriminate for or against a person or class unless there is a rational basis for such discrimination. Art. 8(1) of the Federal Constitution permits reasonable classification founded on intelligible differentia having a rational relation or nexus with the policy or object sought to be achieved by the statute or statutory provision in question (see: Public Prosecutor v Datuk Harun bin Haji Idris & Ors [1976] 2 MLJ 116). This is the test of constitutionality under Art. 8(1). 221. Since the economic wisdom of a tax statute is within the exclusive province of the legislature and questioning the legislative policy is beyond the domain of the judiciary, tax legislation is subject to a less rigorous anti-discrimination test. 222. For a tax statute to pass the test of permissible classification, two conditions must still be fulfilled: (a) the classification must be founded on intelligible differentia which distinguish persons or things that are grouped together from others left out of the group; (b) the differentia must have a rational relation to the object sought to be achieved by the statute. The classification must not be arbitrary, artificial or evasive, but must be based on some real and substantial distinction bearing a just and reasonable relation to the object to be achieved by the legislature (see: Singhal and Joshi, The MLJ Manual on the Constitution of India, Vol. 1, (India: LexisNexis, 2016), at 235). 223. The first point of difficulty is that of classification. Is the Government available for classification as ‘a person’ and consequently can its levy of tax on the Appellants amount to discrimination under Art. 8 FC in the manner contended by the Appellants? We are of the view that such an argument is without merit. 224. This is because where the Government acts in its public capacity and in the exercise of its ordinary governmental functions, a subject, such as the Appellants, cannot claim equality with the Government. (see Amraoti Electric Supply Co. Ltd. v N.H. Mujumdar ILR (1952) Nag 830; AIR 1953 Nag 35). The function of levying tax is a sovereign function of the Government and cannot therefore be treated as a private function of the Government so as to make it a ‘person’ within the meaning of Art. 8 FC (see R.M. Seshadri v Second Additional Income-Tax Officer, Salaries Circle, Madras and Another (1954) 2 MLJ 285: ILR (1954) Mad 1236: AIR 1954 Mad 806), as the Appellants seek to do here. 225. This contention is not therefore available to the Appellants as the Respondent in levying tax on them is carrying out its public function and is in that context not a ‘person’ within Art. 8 FC. 226. Secondly, the Inland Revenue is levying tax on the Appellants in the same manner that it does for all citizens of the nation. The Appellants have not been singled out for discriminatory treatment nor treated in a manner not provided for in the ITA. There is no evidential basis on record to support such a contention. Accordingly, there is no basis for the contention that there has been a contravention of Art. 8 FC. 227. The second limb of the test stipulates that the intelligble differentia must have a rational relation to the object sought to be achieved by the statute. Here the ITA has the object of ensuring that taxes are collected efficiently and expeditiously in the interests of the citizens of the nation as a whole. Section 106(3) ITA as we have construed it, serves that object most rationally. It has a rational relation to the collection of taxes efficiently and expeditiously in that it serves to ensure that for the purposes of enforcement section 106(3) ITA precludes matters which are deferred to the dispute resolution mode specified in the statute. Therefore, it satisfies that aspect of the test for Art. 8 FC too. It passes the constitutional validity test. THE INLAND REVENUE’S CERTIFICATE PURSUANT TO 228. SECTION 142 (1) ITA It is contended by the Appellants that contrary to section 142(1) ITA the certificate was not signed by the DGIR himself. The section provides as follows: “In a suit under section 106 the production of a certificate signed by the Director-General giving the name and address of the defendant and the amount of tax due from him shall be sufficient evidence of the amount so due and sufficient authority for the court to give judgment for that amount. ” 229. It is not in dispute that the Director-General himself did not sign the section 142 certificates in relation to the Appellants. 230. The certificates are signed by one ‘Zainun binti Ahmad’ who is the Chief Assistant Director of the Inland Revenue. The Appellants contend that there is no evidence produced by the Inland Revenue that Zainun binti Ahmad possesses the requisite authorisation to sign the certificates. More specifically they state that there is no evidence of delegation of the Director-General’s powers in relation to the certificate. Nor is there evidence of Zainun binti Ahmad’s name having been gazetted as an officer who is authorised to sign the section 142(1) certificate. 231. Section 136(2) of the ITA provides that: “Any officer appointed under paragraphs 134(2)(b) and (c) may exercise any function of the Director General under this Act (not being a function exercisable by statutory order or a function exercisable under section 152) except his function under section 44, subsection 137(1) and section 150. 232. An Assistant Director for Inland Revenue falls within section 134(2)(b) ITA. Accordingly, the Assistant Director for Inland Revenue, Zainun binti Ahmad is statutorily entitled to exercise the function of the Director General under section 142(1) ITA. The fact that she has done so, is apparent from a persual of the certificate itself. It is therefore in accordance with the provisions of the ITA”. 233. The Appellants now assert that she has no authority to do so on the basis that no notification by gazette was produced by the Inland Revenue. This contention is misconceived because having produced the section 142 certificate and bearing in mind sections 136(2) ITA and section 134(2)(b) ITA, the onus lies on the Appellants as the ones making the assertion to establish otherwise. It is insufficient to simply throw a bare allegation and seek to reverse the onus of proof which lies on them. Therefore there is no merit in this contention. THE CONSEQUENCES OF STRIKING DOWN SECTION 106(3) 234. ITA During the course of oral submissions, we questioned counsel about the potential effect of striking down section 106(3) ITA on government coffers. The Appellants’ answer to this, which is echoed by amicus curiae, is that since collections made under section 106(3) ITA form only a small portion of overall revenue collections (ie an average of 1% of total revenue collected based on the Respondent’s Annual Reports), government reserves would not be substantially affected even if the Respondent is not able to collect disputed assessments under section 106(3) ITA. 235. We are of the view that such an approach is unsustainable, particularly given our construction of the provision. If section 106(3) ITA is struck down by this Court, then the special mechanism laid down by the Legislature to question the merits of the assessment before the SCIT would be rendered otiose. It would be open for aggrieved taxpayers to dispute the quantum of the assessment in court instead. Not only will this foreseeably clog up the Judiciary’s caseload, but it will also have the undesirable effect of impeding the efficient and expeditious collection of taxes under the ITA. 236. We also fail to comprehend how either the Appellants or amicus curiae can conclude with no basis that government reserves will not be ‘substantially affected’ by a delay of possibly years in the collection of taxes which are disputed under section 106(3) ITA. CONCLUSION 237. It is important to note that the power of constitutional review contained in Art. 4(1) FC is a formidable instrument and should be wielded by the Judiciary with great care. If it were to be used indiscriminately or where there is no substantive basis for its invocation, the results could cause considerable damage. In the instant appeals, it could stultify the tax collection system of the nation as validly provided for, and adversely affect the functioning of the Government and the peoples. 238. In the instant appeals, we are satisfied there is no basis for the contention that judicial power has been in any way abrogated, removed or usurped by the impugned statutory provision, namely section 106(3) ITA. The alleged infringement of Art. 5 and 8 FC is not made out. It therefore follows section 106(3) ITA is constitutional. In these circumstances we dismiss the appeals with no order as to costs. Signed NALLINI PATHMANATHAN Judge Federal Court of Malaysia Dated: 16 October 2023 COUNSEL: For the Appellant: Tan Sri Muhammad Shafee Abdullah (Dato Seri Rajan Navaratnam, Muhammad Farhan Shafee, Wee Yeong Kang, Wan Mohammad Arfan Wan Othman, Alaistair Brandah Norman, Oazair Tyeb, Mohamed Reza Rahim with him) MESSRS. SHAFEE & CO Chambers Twenty-Five No.25, Jalan Tunku Bukit Tunku 50480 Kuala Lumpur For the Respondent: Dr. Hazlina binti Hussain (Norhisham bin Ahmad, Al-Hummidallah bin Idrus, Muhammad Faqrol Syazreen bin Mohd Ghause, Norazilah binti N Hamod@Abdul Hamid, Mohamad Asyraf bin Zakaria, Muhammad Danial Izzat bin Zulbahari, Azleena binti Md Khairuddin, Ainur Mardiah binti Ramli, Qhistina binti Mohd Apandi, Komathi A/P P Karuppanan, Sakinah Najwa binti Hussin with her) LEMBAGA HASIL DALAM NEGERI Cawangan Guaman Kuala Lumpur Aras 1, Blok 10 Kompleks Bangunan Kerajaan Jalan Tuanku Abdul Halim 50600 Kuala Lumpur Amicus Curiae: Anand Raj (New Sin Yew, Abhilaash Subramaniam, Foong Pui Chi, Preetha Pillai, Vijey R Mohana Krishnan, Choo Kelly with him) MESSRS SHEARN DELAMORE & CO 7th Floor, Wisma Hamzah-Kwong Hing No.1, Leboh Ampang 50100 Kuala Lumpur