Schedule
Schedule 2 of the Real Property Gains Tax Act 1976 and not s 4(a) of the ITA. [14] In prayer (c), the applicant seeks a declaration that all private and privileged information received from the applicant must be kept privileged unless expressly provided by the ITA under s 138 of the ITA. [15] The application for leave for judicial review is supported by the affidavit of Pong Chee Chuan in Encl 2 (“AIS-2”). Encik Pong is the director of the applicant company. Application for Leave to Intervene [16] Before the application for leave was disposed of, the DGIR filed an application to intervene in this application for judicial review. The application, which is in Encl 29, is made under O 53 r 8(1) of the Rules of Court 2012 (“ROC”). [17] The application to intervene is supported by the affidavit of Mazni binti Ayob and affirmed on 30.5.2022. Puan Mazni is the Senior Executive Officer at the Revenue office in Shah Alam. [18] The learned Senior Revenue Counsel (“SRC”) attracted my attention that, as can be seen from the leave application, the complaints made by the applicant are essentially directed towards the acts or omissions of the Revenue. [19] The acts complained against the Revenue include that in raising the Assessment, the Revenue had acted illegally, unlawfully, in excess of its authority, irrationally and unreasonably. [20] In her written submission, the learned SRC contended that the declaration sought by the applicant in prayer (b) goes to the merits of the Assessment made by the Revenue. It is not a decision made by the Minister. As to prayer (c), the learned SRC highlighted that it is a direct attack against the Revenue. The SRC argued that the declaration sought was premised on a serious allegation that the Revenue had purportedly breached the confidentiality prescribed under s 138 of the ITA. [21] The learned SRC submitted that the Revenue’s intervention is crucial to ensure that justice is served as the applicant had raised damaging allegations against the Revenue. Since the Revenue would be the best party that could answer the allegations, the learned SRC contended that it is essential for the Revenue to defend itself in this proceeding. [22] In any event, according to the learned SRC, the relevant correspondences and DRP held were between the applicant and the Revenue. The Revenue was directly involved in the negotiations between the parties and ought, therefore, to be allowed to intervene. The Analysis [23] In para 7 of his AIS-2, Encik Pong affirmed that a meeting was held on 27.11.2020, attended by the applicant’s representative, Messrs Shaistri and the Revenue officers. At the meeting, the applicant discovered that there was a purported “settlement proposal” submitted by a third party, Messrs NCT Consultancy & Advisory (“Messrs NCT”). However, the alleged role of Messrs NCT in the proposed settlement was not known to the applicant. [24] Encik Pong then went on to assert: The applicant was under the impression that the officers of IRB had conspired with such unauthorised third party to raise the impugned Assessment with possible hidden agenda. [25] Learned counsel for the applicant in his submission resisting the application in Encl 29, contended that the Revenue was never involved in the decision-making process by the Minister under s 135 or otherwise s 127(3A) of the ITA. Learned counsel then further submitted that at best, the Revenue, as the proposed intervener, is only indirectly affected as its concern is related to the government’s money, not its own, although it is acting in the government's interest. [26] Relying on Regina v Rent Officer Service and Anor, Ex parte Muldoon [1996] 1 MLR 1103 HL, learned counsel for the applicant argued that indirect interest is insufficient to justify the application's granting to intervene. [27] With respect, I cannot agree with this line of argument. In the instant case, there was a serious allegation against the Revenue. In fact, in the said Letter to the Minister, which was to be the basis of this application for judicial review, the applicant made a similar allegation that is raised in this application for leave. The said Letter inter alia states: We are concerned on whether the IRB officers who have access to our files have unlawfully disclosed details pertaining to our matter to a third party. Such a conduct is clearly in breach of the IRB’s duty to honour confidentiality pursuant to s 138 of the ITA. [28] In the face of a direct allegation of a possible breach of statutory duty against the Revenue, I cannot accede to the argument that the Revenue is not directly affected. [29] The law, I believe, is quite well-established. A proposed intervener has to show that he is a “proper person” within the meaning of the O 53 r 8 of the ROC. The phrase “proper person” is not defined in O 53. However, a proper person is defined by the Federal Court in Majlis Agama Islam Selangor v Bong Boon Chuen & Ors [2009] 6 MLJ 307 FC as referring to a person with a direct interest “who wishes to be heard in opposition”. [30] To deny the Revenue the right to be heard in the face of an allegation of a breach of statutory duty would result in a serious miscarriage of justice. Just as in Dr Lordes Dava Raj a/l Curuz Durai Raj v Dr Milton Lum Siew Wah & Anor [2020] 5 MLJ 185 FC, the proposed intervener in the instant case is a party most directly involved and even a cause of complaint to the Minister. The Revenue was central to the serious allegation of a breach of statutory duty. It was an integral part of the complaint to the Minister as contained in the said Letter. [31] With respect, I cannot accept the argument that after raising a serious allegation against the Revenue on a possible conspiracy and hidden agendas to raise the impugned Assessment on the applicant, the applicant now comes to this Court with the contention that the Revenue has no direct interest in this application for leave for judicial review. [32] The Revenue’s exclusion from participation at the leave stage without it having been heard in its defence of the allegation would be an affront to the principles of natural justice. [33] It is my considered view that the Revenue need not wait for the leave to be granted first before making an application to intervene since it is my finding that the Revenue, in the factual matrix of the instant case, is a party with a direct interest in the outcome of the case; see Advance Synergy Capital Sdn Bhd v The Minister of Finance, Malaysia & Anor [2011] 6 MLJ 376 CA. [34] For the reasons aforesaid, the application in Encl 29 is allowed with costs in the cause. WA-25-222-06/2021 [35] The applicant company, Alphaprise Sdn Bhd, had entered into a joint venture to develop the lands known as PT 24439 and PT 24440, Mukim Kapar, District of Klang, Selangor (“the said Lands”) owned by Menteri Besar Selangor (Pemerbadanan) (“MBSI”). [36] In consideration for the said Lands, the applicant shall, at its own costs and expenditure, construct and deliver to MBSI and Kumpulan Hartanah Selangor (“KHSB”) 16 units of detached factories to be erected on the said Lands. Of the 16 units, MBSI is entitled to nine and KHSB is entitled to seven. [37] A supplementary agreement was signed by the parties whereby it was agreed that MBSI and KHSB would appoint the applicant as their agent to sell the 16 units. According to the supplementary agreement, the proceeds shall be paid directly to MBSI and KHSB respectively. [38] In February 2015, MBSI and KHSB received a total sum of RM150,000,000 from the applicant, being the guaranteed proceeds in respect of the sales of the 16 units. [39] The Revenue asserted that the applicant had failed to report the proceeds arising from the sale of the 16 units of detached factories. According to the Revenue, the 16 units were stock in trade of the applicant and hence, the sale proceeds of the 16 units are taxable pursuant to s 4(a) of the ITA. [40] The Revenue then issued notices of additional assessment (“NAAs”) for the years of assessment (“YAs”) 2015 to 2018 for the total sum of RM25,545,696.74 all dated 11.6.2021. [41] The applicant then wrote to the putative respondent, the Minister of Finance (“the Minister”), vide a letter dated 15.6.2021 (“the impugned Letter”) for the Minister to exercise his power under s 135 or otherwise s 127(3A) of the ITA to set aside the NAAs or exempt the taxes. [42] The Minister did not respond to the applicant’s letter, hence this application for leave for judicial review. The application to intervene [43] In this application in Encl 34, the Revenue seeks to intervene in the application for leave to commence the judicial review. As in JR No. 251, this application is made under O 53 r 8(1) of the ROC. [44] The application to intervene is supported by the affidavit of Syafee bin Saleho in Encl 35 (“AIS-35”). Encik Syafee is the executive officer at the Revenue’s office in Shah Alam. Analysis [45] As in JR No. 251, the application to intervene is anchored on the Revenue’s contention that it is a proper person in the context of O 53 r 8(1) of the ROC. [46] Unlike in JR No. 251, there is no allegation of impropriety on the part of the Revenue that would make it incumbent for this Court to give the Revenue a right to be heard to defend itself. [47] S 135 of the ITA provides as follows: The Minister may give to the Director General directions of a general character (not inconsistent with this Act) as to the exercise of the functions of the Director General under this Act; and the Director General shall give effect to any directions so given. S 127(3A) provides: The Minister may, in any particular case exempt any person from all or any of the provision of this Act, either generally or in respect of any income of a particular kind or any class of income of a particular kind. [48] The pertinent question that is to be addressed is, does the Revenue have a direct interest in the matter? [49] The learned SRC submitted that the Revenue is the party that raised the NAAs against the applicant. She argued that the correctness of the NAAs is the crux of the judicial review application. Thus, the Revenue has a direct interest and would be directly affected by the decision of this Court. [50] The applicant company submitted its request directly to the Minister vide the impugned Letter for the Minister to exercise his power under ss 135 and 127(3A) of the ITA. [51] From the aforesaid provisions, the Minister has the power to give directions of a general character to the DGIR. The Minister can also exempt any person from any provision of the ITA. But the law expects the Minister to exercise it himself if and when he feels the need arises. The DGIR plays no role in the exercise of Ministerial discretion under the ITA. [52] Unless s 5 of the Delegation of Powers Act 1956 is applicable, the Minister cannot delegate his power to any other parties, including the DGIR. It would run foul with the maxim of delegatus non potest delegare. An example of this can be seen in Lavender (H) & Son Ltd v Minister of Housing and Local Government [1970] 1 WLR 1231. In that case, Willis J held that although the duty to decide whether planning permission should be granted had been entrusted by Parliament to the Minister of Housing, on a true construction of his decision letter, the Minister had wrongly delegated that decision to the Minister of Agriculture, so that he had not properly or at all exercised his duty or his discretion. [53] In the instant case, it has not been established that the DGIR has played a role in the alleged failure of the Minister to exercise his powers under the ITA. Since the subject matter of this application for leave for judicial review concerns the decision on non-decision of the Minister, the Revenue, at least at this leave stage, cannot be considered as a “proper person to be heard”. [54] In any event, until leave for judicial review is obtained, the NAAs are not in jeopardy of being reversed or set aside. In that sense, the Revenue cannot be said to be prejudiced. [55] Any decision made by the Minister, either under s 135 or s 127(3A) of the ITA, cannot be said to have a direct interest on the Revenue. The Revenue, at best, is only an intermediary. The Revenue is only an agent of the Government under s 10 of the Inland Revenue Board of Malaysia Act 1995. If the Revenue is the agent, then the Government is the principal. Lord Keith of Kinkel, in ex parte Muldoon, remarked that: That a person is directly affected by something connotes that he is affected without the intervention of any intermediate agency. [56] For the aforesaid reasons, the application in Encl 34 is premature and is therefore dismissed. There shall be no order as to costs. [57] However, I am granting the Revenue the liberty to apply if and when this Court grants the leave for judicial review. [58] I will not address the issue of domestic remedy raised by the learned SRC since it will only be deliberated at the leave stage. Tarikh: 9 Januari 2023 (WAN AHMAD FARID BIN WAN SALLEH) Hakim Mahkamah Tinggi Kuala Lumpur. Pihak-pihak: Bagi Pihak Pemohon : S Saravana, Ng Kar Ngai, Amira Rafie Tetuan Rosli Dahlan Saravana Partnership Bagi Pihak Responden : Nik Isfahanie Tasnim Binti W. Ab. Rahman SFC, Noor Atiqah FC Jabatan Peguam Negara Pihak Pencelah : Mohammad Hafidz Ahmad SRC, Normareza Mat Rejab SRC Mohammad Danial Ahmad RC & Syazana RC Lembaga Hasil Dalam Negeri (LHDN), Cyberjaya