Puncak Niaga Construction Sdn Bhd v Menteri Kewangan Malaysia (WA-25-357-12/2020)

On 22"9 January 2024, | dismissed the application for leave to commence judicial review proceedings brought by the applicant, Puncak Niaga Construction Sdn Bhd against the Minister for Finance (“the Minister’) for the following reliefs (enclosure 1): (i) an order that the Minister exercise his powers under section 135 and/or section 127(3A) of the Income Tax Act 1967 (“ITA”) to set aside or exempt the Director General of Inland Revenue’s (“DGIR”) assessment in the form of notices of additional assessment for the Years of Assessment (“YA”) 2017 and 2018 on the ground that the assessments made were illegal, void, unlawful, in excess of authority, irrational, unreasonable and/or which resulted in a denial of the applicant's legitimate expectation (“the impugned assessments”); and 2 (ii) a declaration that the applicant is entitled to surrender the losses in the YA 2017 and YA 2018 amounting to RM2,292,182.64 and RM1,988,472.96 respectively to Puncak Niaga Management Services Sdn Bhd (“PNMSB’) pursuant to the Group Relief Scheme provided under section 44A(1) of the Income-tax Act 1967 (“ITA”).

It is to be noted that the impugned assessments were made by the DGIR. There are specific provisions in the ITA that expressly provide an aggrieved taxpayer an avenue of appeal against such assessments to the Special Commissioners of Income Tax (“Special Commissioners’).

In the instant case, instead of resorting to the statutorily appeal avenue against the impugned assessments made by the DGIR, the applicant approached the Minister by letter to do the following: (a) for a direction to be made under section 135 of the ITA directing the DGIR to set aside the impugned assessments; and/or (b) to exempt the tax assessed by the DGIR under section 127 of the ITA.

My reason for dismissing the application for leave to commence judicial review proceedings was the failure of the applicant to satisfy the test for granting leave established by the Federal Court WRP Asia Pacific Sdn Bhd v Tenaga Nasional Bhd [2012] 4 CLJ 478. THE BACKGROUND FACTS

The facts pleaded by the applicant are as follows. The applicant is in the business of construction projects. In the course of carrying out its projects, losses were surrendered to PNMSB. The DGIR disallowed the surrendered losses on the basis that the losses arose from uncompleted projects. It was contended that the DGIR’s decision was wrong as the ITA does not provide restrictions of such nature.

On 10 January 2020, the DGIR informed the applicant of its audit findings and the taxes due. The applicant informed the DGIR by letter dated 28 February 2020 that it had sufficient adjusted loss to be surrendered after excluding the estimated losses from the uncompleted projects for the YA 2017 4 and YA 2018. On 2 September 2020, the DGIR informed of its final audit findings and disallowed the group relief surrendered by the applicant to PNMSB on the basis that the projects were not completed and the actual loss was yet to be ascertained.

On 15 September 2020, the applicant by letter gave its reasons for disagreeing with the DGIR on the following grounds: (a) the applicant as a surrendering company would still be in an adjusted loss position after deducting the estimated loss and have sufficient adjusted loss to surrender to PNMSB; (b) having disregarded the estimated loss from the D44 project and BALB, the applicant would still remain in adjusted loss pursuant to section 40 of the ITA, and by having a sufficient adjusted loss the applicant is eligible for group relief and was able to surrender such loss to its related company, PNMSB in accordance with section 44 of the ITA; (c) accordingly, there would be no issue of undercharged tax by PNMSB as a claimant company; and (d) inthe event, that there is any amount of tax undercharged, it should be imposed on either the claimant company or the surrendering company but not on both companies.

On 20 November 2020, the DGIR raised the impugned additional assessments against the applicant.

In a letter dated 24 November 2020, the applicant wrote to the Minister requesting directions be given to the DGIR to set aside the impugned additional assessments under section 135 of the ITA and/or an application pursuant to section 127(3A) of the ITA to exempt the tax raised arbitrarily against the applicant. The letter sets out the position taken by both the DGIR and the applicant and the applicant’s grounds for stating why the DGIR was wrong and that no additional assessment should have been raised against the applicant.

In the letter the following requests were made: (i) that under section 135 of the ITA, the Minister gives directions to 6 the DGIR to review his exercise of power so that the law is applied correctly and fairly; and (ii) that the Minister exempts the applicant from the impugned additional assessments under section 127(3A) of the ITA. The letter further states that if the Minister fails to do the same urgently or by 30 November 2020, the applicant will assume that the Minister is not considering both requests.

When there was no response, the applicant said that it treated the failure to respond as the Minister rejecting the requests under sections 145 and/or 127(3A) of the ITA. On 3 December 2020, the applicant filed the instant judicial review application for the reliefs set out in paragraph [1] above. THE GROUNDS OF REVIEW

The grounds of review stated in the Order 53 Statement are as follows: (a) The impugned additional assessments made by the DGIR are illegal, void, unlawful, and/or in excess of authority on the following grounds: (i) There was no basis in law and fact in raising the impugned additional assessments as section 44A(9) of the ITA clearly provides that the DGIR could either invoke section 44A(9)(a) on the claimant company or section 44A(9)(b) on the surrendering company; (ii) the DGIR failed to comply with trite law that a taxing statute must be interpreted strictly, nothing is to be read in and nothing is to be implied as established in National Land Finance Co-operative Society Ltd v Director General of Inland Revenue [1993] 4 CLJ 339 and Palm Oil Research and Development Board Malaysia & Anor v Premium Vegetable Oils Sdn Bhd & Anor Appeal [2005] 3 MLJ 97; (iii) the DGIR failed to give effect to section 44A(9) of the ITA and arbitrarily raised the impugned additional assessment without regard to the facts before him (iv) the DGIR exceeded his jurisdiction when raising the impugned additional assessment without legal and constitutional authority and by disregarding decisions of the superior courts; (b) The decision of the Minister is irrational and/or 8 unreasonable for the following grounds: (i) that the decision is so unreasonable that no reasonable Minister similarly circumstanced could have come to that decision, this is especially so when the Minister had failed to give any valid justification, reason or basis for his decision. (ii) the Minister had exercised his authority arbitrarily and/or mechanically as there is nothing in the Minister’s decision to suggest that even the briefest of thought was given to the explanations set out in the letter dated 24 November 2020. (iii) the Minister failed to take cognisance superior court decisions of the interpretation and construction of taxing statutes that is binding on him; (iv) the Minister failed to appreciate and to give effect to the true effect and application of the ITA amounts to a clear contravention of Article 96 of the Federal Constitution. (c) The Minister's decision was made without having any regard for the legitimate expectation of the applicant as the Minister failed to consider the decisions of the superior 9 courts in relation to the interpretation and construction of legislation which disregard constitutes a denial of the legitimate expectation of the applicant.

It is to be observed that the grounds of review refer to a decision made by the Minister but in actual fact, the Minister did not make any decision at all. It was the applicant who treated the non-response to its letter dated 24 November 2020 as a decision rejecting the requests made under sections 135 and/or 127(3A) of the ITA. THE TEST AT THE LEAVE STAGE

This brings me to the duty of the judge hearing an application for leave. To obtain leave of court to commence judicial review proceedings the established test is aptly described by the Federal Court in WRP Asia Pacific Sdn Bhd v Tenaga Nasional Bhd [2012] 4 CLJ 478 in the following words: Without the need to go into the depth of the abundant authorities, suffice if we state that leave may be granted if the leave application is not thought of as frivolous, and 10 if leave is granted, an arguable case in favour of granting the relief sought at the substantive hearing may be the resultant outcome. A rider must be attached to the application though i.e., unless the matter for judicial review is amenable to judicial review absolutely no success may be envisaged.

The test in WRP Asia Pacific Sdn Bhd envisages three categories where leave of court will be refused. The first is where the application is found to be ‘frivolous and vexatious’. In Tang Kwor Ham & Ors v Pengurusan Danaharta Nasional Bhd & Ors [2006] 5 MLJ 60 and Teh Guat Hong v Perbadanan Tabung Pendidikan Tinggi Nasional [2015] 3 AMR 35 the Court of Appeal set out the established frivolous and vexatious situations, namely, where the application: (i) is made by a busybody; (ii) is misguided or misconceived or are trivial complaints of administrative errors; (iii) is made outside the prescribed time; (iv) is made against a person or body that is immunized from being impleaded in legal proceedings; and 11 (v) where there is an alternative statutory remedy or a more appropriate remedy.

The second arises when the application is not found to be frivolous and vexatious, leave will nevertheless be refused where an arguable case for further investigation at the substantive stage is not made out. The threshold for this situation is very low. All that is required at this stage is for the judge to peruse the material placed by the applicant before the court, it being an ex parte application, to see whether “an arguable case in favour of granting the relief sought at the substantive hearing may be the resultant outcome”. Leave of court will be granted in all cases unless “absolutely no success may be envisaged”. Where “absolutely no success may be envisaged’ is very rare as leave is usually granted.

The third is where the matter for review is not amenable to judicial review. In this situation include matters that are non-justiciable, policy considerations, and management prerogative. (see Dr Michael Jeyakumar Devaraj v. Peguam Negara Malaysia [2013] 2 CLJ 1009; Tengku Muhammad Fakhry Petra Ibni Sultan Ismail Petra v Yang Maha Mulia 12 Pemangku Raja Kelantan & Ors [2011] 1 MLJ 128; and Teng Chang Khim v Badrul Hisham Abdullah & Anor [2017] 9 CLJ 630). ATTORNEY GENERAL’S OBJECTIONS

The Attorney General raised the following matters as to why leave ought not to be granted: (i) the Minister did not make any decision concerning sections 135 and 127(3A) of the ITA — in fact the Minister did nothing at all — he did not respond to the request, and the subject matter of the complaint is the decision of the DGIR and not the Minister, as such, the proper place to ventilate the grievance against the impugned additional assessments was before the Special ommissioners of Income Tax (“the SCIT”). In other words, the instant application is an abuse of the process of the court. DECISION OF THE COURT

To reiterate the obvious, the Minister in the instant case did not exercise his powers or make any decision under 13 sections 135 and/or 127(3A) of the ITA as requested by the applicant in its letter dated 24 November 2020. The declaration sought

It is clear, that the subject matter of the declaration, that the applicant is entitled to surrender the losses in the YA 2017 and YA 2018 amounting to RM2,292,182.64 and RM1,988,472.96 respectively to Puncak Niaga Management Services Sdn Bhd (“PNMSB”) pursuant to the Group Relief Scheme provided under section 44A(1) of the Income tax Act 1967 (“ITA”) was made by the DGIR. The proper contradictor to this declaration is therefore DGIR. Any taxpayer aggrieved by the decision of the DGIR has a very specific statutory avenue of appeal i.e. the SCIT under the ITA. Yet the applicant chose to cite the Minister who did not make the impugned additional assessments. The claim for declaration is frivolous and vexatious as it ought to have appealed against the decision of the DGIR to the SCIT. The bypassing of the statutory appeal avenue under section 99 of the ITA specifically enacted for this purpose is an abuse of the process of the court. 14

The declarations cannot be sought against the Minister as he did not make the impugned additional assessments. The proper recipient of such a declaration is the DGIR. As such, the declaration has no chance of success against the Minister.

In this regard the law is trite. ln Dewan Undangan Negeri Selangor & Ors v Mohd Hafarizam Harun [2016] 7 CLJ 143 and Hassan Marsom & Ors v Mohd Hady Ya’akop [2018] 7 CLUJ 403 the Federal Court held that one of the basic requirements to obtain a declaration is to secure a proper contradictoras defendant i.e. the person to oppose the declaration. The law was stated as follows in Hassan Marsom:

Speaking on the same subject matter, Lord Denning in Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554 observed: The wide scope of it can be seen from the speech of Viscount Kilmuir LC in Vine v National Dock Labour Board [1957] AC 488, 498 from which it appears that if a substantial question exists in which one person has a real interest to raise, and the other to oppose, then the court has the discretion to resolve it by a declaration, which it will exercise if there is good reason for so doing. His Lordship also referred to the observation of Lord Dunedin in The Russian Commercial & Industrial Bank v British Bank for Foreign Trade [1921] 2 AC 438 at p 448: The question must be real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought.

Thus, in the absence of a proper contradictor i.e. the DGIR, the declaration ought not be issued. Further, a declaratory relief would not be issued where there is an alternative remedy as in this case (Manggai v Government of Sarawak & Anor [1970] 2 MLJ 41). 16 The relief sought is in the nature of mandamus

| will now address the first issue that the principal order i.e. was in the nature of mandamus and the ingredients of this order are not established on the facts, even if assumed to be true, would not in law entitle the applicant to relief. The opening words of the principal order are: “an order for the Respondent (Minister) to exercise his power’. The powers referred to are housed in sections 135 and 127(3A) of the ITA. The words are compelling words and directed to the Minister to exercise the power in the manner dictated by the applicant. The relief sought, as it is worded, is in pith and substance an order in the nature of mandamus. It is certainly not the words for obtaining an order for certiorari.

It is trite that an order of certiorari is to quash the legal effect of a decision and this is not made out by the words employed in the principal relief sought. What is prayed for is to exercise power. | have considered the submissions and agree with the Federal Counsel who appeared for the Attorney General that what is sought is an order in the nature of mandamus which cannot in law be granted on the face of what had been pleaded 17 by the applicant. As such there is no arguable case for the principal order sought to be investigated at the substantive stage.

The reason the order cannot be granted in law is because the mandamus does not lie to perform a discretionary power and only lies where the applicant has a legal right to compel the performance of a duty provided in a statute. The use of the word ‘may’ in both the sections relied on by the applicant confers discretionary power and not a duty on the Minister. For ease of reference, the sections are reproduced below. Section 135 of the ITA states: 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. while section 127(3A) of the ITA state: The Minister may, in any particular case exempt any person from all or any of the provisions of this Act, either 18 generally or in respect of any income of a particular kind or any class of income of a particular kind.

There is a plethora of authorities on the point and it is sufficient to cite the following instructive extract from MP Jain, Administrative Law of Malaysia and Singapore, 4" Edition, at 615 (see Court of Appeal decisions of Menteri Besar Negeri Pahang Darul Makmur v Seruan Gemilang Makmur Sdn Bhd [2010] 5 CLJ 123 and Mohd Karim Abas & Ors v Ketua Pengarah Jabatan Hal Ehwal Kesatuan Sekerja where the same extract from an earlier edition of the book was applied): Mandamus is thus a very wide remedy which is available against a public officer to see that a duty is performed or carried out, in accordance with law. Enforceable by mandamus is a duty of a public nature, the performance of which imperative and not optional or discretionary. Thus, if an officer has power, rather than a duty, and does not use such power, mandamus is not issued if the officer refuses to exercise the power for the wrong reasons. 19

The decision in Karpal Singh Ram Singh v Ketua Hakim Negara 2011] 4 CLJ 179 is relevant. There an order of mandamus was sought directing the Chief Justice to respond to the applicant’s request under section 13 of the Judges’ Code of Ethics 2009 to act in the manner dictated by the applicant. It was held that there must be under the law some duty cast upon the public officer before an order of mandamus can be made. If the public officer does not carry out his duty, the court will call upon him to perform that duty by an order of mandamus. The court found that section 13, from the language used, did not impose a duty on the Chief Justice to act in a manner dictated by the applicant. The principle was lucidly stated as follows: What can be enforced through mandamus is a duty of a public nature, the performance of which is imperative and not optional or discretionary with the concerned authority. Thus, if an officer has power, rather than a duty, and if he does not use his power, a mandamus is not issued to compel him to exercise his power.

The applicant appeared to have realised that when asking for the Minister to exercise his powers on the facts pleaded in the Order 53 Statement is an application in the nature of mandamus. It is no surprise then that in its applicant's supplementary submissions filed on 29 September 2023 (some 15 months after it filed its written submissions dated 9 June 2022) the applicant now submits that: (a) the Minister's refusal to make a decision is a decision amenable to judicial review under Order 53 which is in line with the House of Lords decision in Council of Civil Services Unions v Minister for the Civil Service [1985] AC 374; and (b) that there need not be an actual decision in order for an application for judicial review to be brought — for this proposition the case of Tang Kwor Ham & Ors v Pengurusan Danaharta Nasional Bhd & Ors [2006] 5 MLJ 60 and Sivarasa Rasiah v Badan Peguam Malaysia & Anor [2002] 2 MLJ 413 were cited in support. Whether there was a refusal to make a decision 21

The applicant had articulated the point in its abovementioned supplementary written submission that the refusal to respond can amount to a refusal to make a decision and such refusal is amenable to certiorari. The refusal to make a decision is amenable to judicial review was enunciated by the House of Lords in Council Of Civil Service Unions v. Minister For The Civil Service [1985] AC 374; [1984] 3 All ER 935 where it was said that for a decision to be susceptible to the court's reviewing powers, there must first be a decision by a decision maker or a refusal by him to make a decision, and, that decision must affect the aggrieved party by either altering his rights or obligations or depriving him of the benefits which he has been permitted to enjoy.

This principle was approved by the Federal Court in Members Of The Commission Of Enquiry On The Video Clip Recording Of Images Of A Person Purported To Be An Advocate And Solicitor Speaking On the Telephone On Matters Of Appointment Of Judges V Tun Dato’ Seri Ahmad Fairuz Bin Dato’ Sheikh Abdul Halim [2011] 6 MLJ 490. Thus, a refusal to make a decision is a type of “decision” liable to be quashed by an order of certiorari. The applicant treats the non- 22 response by the Minister to its letter dated 24 November 2020 as a refusal to make a decision.

It is clear that a refusal to make a decision on the requests is different from a decision rejecting the requests made by the applicant. In applying the liberal approach so that the applicant is allowed to seek leave for the order of certiorari for the refusal to make a decision, | had to consider whether the elements for a “refusal to make a decision” were established. The leading authority is the decision in Re Bukit Sembawang Rubber Co Ltd v Sembawang Estates Ltd [1961] 1 MLJ 269 and followed in Winsome Al-Yatama Sdn Bhd & Anor v. Pentadbir Tanah Kota Tinggi [2015] 9 CLJ 110. The elements can be summarized as follows: (i) A refusal to make a decision may be an absolute refusal in terms or there may be conduct amounting to a refusal. Where the respondent has not refused compliance in express terms it is a question of fact whether his conduct evinces a clear determination not to comply. (ii) There must be clear evidence of a refusal to act. This can 23 be established primarily on the basis of an inordinately long delay as to amount to a refusal to consider and determine the application made to the decision-maker (R v Central Professional Committee for Opticians [1949] 2 All ER 519).

In my judgment, based on the facts alluded to by the applicants, there was no inordinate delay. The Minister was only given until 30 November 2020, a mere 6 days, to exercise his powers as dictated by the applicant. Further, independently of the preceding sentence, even if there is a decision that qualifies as a “refusal to make a decision” that is susceptible to certiorari, all that can be quashed is the decision refusing to make a decision. The decision must still be made.

In this regard the decision of Zainal bin Haji Nasiruddin v The Registrar of Societies [2012] MLJU 1623 is instructive. There the applicant made an application to the Registrar of Societies ("Registrar") to register a political party. The Registrar did not make any decision either to refuse or to allow the application. It was held that an inordinate delay, without good reason, to make a decision amounted to a 'refusal to make a decision’. Ravinthran J (as His Lordship then was) held that 24 such inordinate delay was unlawful and ultra vires the Societies Act 1966, but to compel the Registrar to register the political would be putting the cart before the horse as the Registrar has not made any decision as yet. An order of mandamus to compel the Registrar to make a decision whether to register the political party or not to register the political party within 21 days of the order was made by His Lordship.

Thus, an application to quash a decision by a decision-maker not to make a decision must be accompanied by an order of mandamus to compel the decision-maker to make a decision on the matter as mandated by Parliament. The court cannot usurp this power. In the instant case, the power is conferred on the Minister. Without the accompanying order of mandamus, the applicant is only left with ‘no decision made by the Minister’.

Similarly, in the instant case, if the decision i.e. “refusal to make a decision” is quashed, an order of mandamus to compel the Minister to exercise his powers must follow. However, as shown above, no order of mandamus can be made as sections 135 and 127(3A) of the ITAconfers 25 discretionary power and not a duty on the Minister. In such cases, an order of mandamus cannot lie. Thus, no arguable case is demonstrated even if there is a refusal to make a decision. Whether an actual decision is required for judicial review

The other argument put forth by the applicant is that no decision is required. This proposition would render Order 53 Rule 2(4) of the Rules of Court 2012 meaningless as it is a prerequisite of the rule that a person is entitled to make an application for leave if he is adversely affected by a decision, action, or omission. To be fair, the applicant cited Tang Kwor Ham and Sivarasa Rasiah where it was held that there need not be an actual decision for certiorari to lie.

The case of Tang Kwor Ham followed Sivarasa Rasiah. The latter case was decided earlier. In that case, there was no decision. A reading of Sivarasa Rasiah reveals that the case is distinguishable. The Court of Appeal decision in Sivarasa Rasiah cited by the applicant must be read with the Federal Court decision in Sivarasa Rasiah v Badan Peguam Malaysia and Anor reported as [2010] 3 CLJ 507 to see the full picture. When this is 26 done one would see that the situation where a decision is not required is the type of judicial review known as "constitutional judicial review". In such a situation the constitutionality of a statutory provision is under review. The source of this type of judicial review is Article 121(1) read with Article 4(1) of the Federal Constitution.

The second type of situation is where a "decision", "action" or "omission" is sought to be reviewed. This type of judicial review is known as statutory judicial review and is provided pursuant to section 25(2) read with paragraph 1 of the Schedule to the Courts of Judicature Act 1964. The distinction was made and recently reiterated in Haris Fathillah Mohamed Ibrahim & Ors v Tan Sri Dato’ Azam Baki & Ors [2023] 3 CLJ 653 in the following words:

To build upon what was stated in SIS Forum (supra), judicial review in its broadest sense calls upon the Judiciary to examine the exercise of powers. A constitutional judicial review, whether to challenge the validity of legislation or such as in this case, to interpret the FC itself, brings to light the question on how the 27 constitutional provision should be applied. The statutory aspect of judicial review is when the exercise of those powers is questioned and judicial remedy is sought to bring those powers back into the confines of the law.

In Sivarasa Rasiah, the applicant was an advocate and solicitor who was also an office bearer of a political party whom wished to be elected to the Bar Council. However, section 46A(1) of the Legal Profession Act 1976 (“section 46A(1)”) prohibited him from doing so. The provision clearly disqualified office-bearers of political parties from being members of the Bar Council. Sivarasa Rasiah challenged the statutory disqualification by seeking leave of court to commence judicial review proceedings for the following reliefs: (i) a declaration that notwithstanding holding office in a political party he is not disqualified from offering himself as candidate for election to the Bar Council; and (ii) a declaration that notwithstanding holding office in a political party he is not disqualified from being a member of the Bar Council. The grounds upon which he claimed that relief, in his Order 53 Statement filed in support of the leave application was thatsection 46A(1) was unconstitutional by reason of the breach of his fundamental 28 rights enshrined in Articles 5(1), 8(1) and 10(1)(c) of the Federal constitution.

Sivarasa Rasiah failed to obtain leave in the High Court and appealed to the Court of Appeal. The submission by the Attorney General, at the Court of Appeal, was that the declarations sought by the applicant were not declarations that could be allowed by the court as there was no frontal assault on the constitutionality of section 46A(1). The Court of Appeal agreed that the declarations cannot be granted even if the facts alleged are true but enunciated the principle that if the applicant has sought remedies to which he is patently not entitled to, but adduces facts and establishes grounds entitling him to relief, it is open to the judge hearing the substantive motion to grant relief that was pleaded but not claimed. It was held that the inadequacies of drafting, though justifiably made, comes to naught since the High Court had power to grant appropriate relief after hearing full argument on the substantive motion. In this respect, the court should adopt the flexible approach. The Court of Appeal granted leave on the basis that the appropriate relief was to declare section 46A(1) unconstitutional. The matter was remitted to the High Court with directions to serve again the 29 motion for judicial review. At the High Court, the motion was amended to include a prayer to declare section 46A(1) unconstitutional. The case was obviously by its nature one where no "decision" is necessary as it is to review a legislation i.e. by declaring a statutory provision unconstitutional. If the provision was declared unconstitutional, the way is paved for Sivarasa Rasiah to be elected to the Bar Council.

However, the instant application for leave does not concern a case of constitutional judicial review but a statutory judicial review. For statutory judicial review a "decision", "action" or "omission" is necessary. Further, if an order of certiorari is sought, it is absolutely imperative that the impugned decision be properly identified and specifically stated in the application for leave. If the judicial review application is taken against the wrong authority or the wrong decision then invariably the judicial review becomes incompetent. It is apposite in this regard to refer to the decision of the Federal Court in Majlis Perbandaran Pulau Pinang v Syarikat Bekerjasama-sama Serbaguna Sungai Gelugor Dengan Tanggungan [1999] 3 CLJ 65 where the duty to identify the impugned decision was stated as follows: 30 It is right to say, at the risk of being trite, that administrative law is much concerned with the legality of procedures leading up to a decision and, of course, of the decision itself. /t is therefore a matter of the first importance to correctly identify the decision sought to be impugned... Failure to observe these basic requirements could have fatal consequences as the following authorities will serve to illustrate...

Thus, the existence of a "decision" or "action" or an "omission" is necessary to commence statutory judicial review proceedings. The contention of the applicant is in the circumstances rejected. The non-applicability of sections 135 and 127(3A) of the ITA

This is an additional ground to refuse leave on the premise that the application is frivolous and vexatious. Again, it is important to keep in mind the following crucial facts: (i) that the Minister did not make a decision in respect of the applicants’ requests; and (ii) that the assessments made by the DGIR are alleged to be illegal and/or unlawful i.e. the tax illegally levied in law. The 31 applicant came to the Minister to set aside the assessments made by the DGIR by way of directions to be given to the DGIR to set aside the same or the Minister himself exempt the tax as assessed by the DGIR.

The Minister has no power to do what the applicant is requesting him to do under sections 135 and/or 127(3A) of the ITA. As such, there is no arguable case for investigation at the substantive stage for the reliefs prayed or not prayed for i.e. mandamus, certiorari, and declaration on the material presented to this Court. My reasons are as follows.

The ITA is structurally designed and is divided into parts and chapters to take care of specific areas. The power to set aside any wrongful assessments in law lies with the SCIT by way of an appeal under section 99 of the ITA or in certain instances by the High Court by way of judicial review if special circumstances are shown (see Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ 185). Sections 99 to 102 are in Chapter 2 under Part VI of the ITA which specifically provides for ‘assessments and appeals’. An appeal envisaged in the sections is specifically and expressly directed against assessments made by the DGIR. The SCIT is conferred with 32 express power under paragraph 26 of Schedule 5 of the ITA to discharge set aside or amend any assessments made by the DGIR. An appeal against the decision of the SCIT lies to the High Court (section 102 read with paragraph 34 of Schedule 5 of the ITA).

Section 135 of the ITA is housed in Chapter 1 under Part X which solely concerns ‘administration’. The purpose of the provision is for the Minister, when he is of the view it is required, to give directions of a general character as to the exercise of the functions of the DGIR, not inconsistent with provisions of the ITA, to the DGIR. The directions are administrative and general in nature and certainly not directions specific in nature such as giving directions to the DGIR to set aside assessments he had made in a particular case. Setting aside an assessment is not a matter concerning ‘administration’ falling within the purview of section 135 of the ITA. The power to set aside an assessment is provided only by way of an appeal to the SCIT and not to the Minister.

Section 127(3A) of the ITA specifically confers power on the Minister to grant tax exemptions. The section is in Part IX of the ITA which concerns ‘exemptions, remission, and other relief’. Section 127(3A) of the ITA is an empowering provision conferring power on 33 the Minister to exempt a person from ‘any provision’ of the ITA or exempt ‘any income of a particular kind or any class of income of a particular kind’. The section envisages that the person requesting exemption is lawfully liable to pay tax. But, in the instant case, what was sought to be exempted was the tax that should not have been levied since it is the applicant's pleaded case that the tax was illegally, arbitrarily, and/or wrongfully assessed in law.

It is the basic law that ‘income tax is a tax on income’ and ‘exemption only becomes relevant when there is chargeable income, but not otherwise’. This principle was reiterated in Ketua Pengarah Hasil Dalam Negeri v Perbadanan Kemajuan Ekonomi Negeri Johor [2009] 5 CLJ 518 by the Court of Appeal referring to, amongst others, Lower Perak Co-operative Housing Society Berhad v Ketua Pengarah Hasil Dalam Negeri [1994] 3 CLJU 541 where it was held that a tax exemption is only given after liability to tax has been determined in the following words: In other words, there must be liability to income tax first, and then only the question of claiming exemption ... arises. 34

In the instant case, the applicant is claiming to be exempted, not from lawfully determined tax but from illegally and/or unlawfully levied tax. That is not the purpose of section 127(3A) of the ITA. Section 127(3A) of the ITA is to exempt tax lawfully levied tax. It is axiomatic that only lawful levied tax can be exempted. Therefore, the exemption sought in the instant case is something that the Minister clearly has no power to do. To set aside the unlawfully levied tax by the DGIR, the applicant must approach the SCIT by way of an appeal or if allowed, by the High Court by way of judicial review.

For the above reasons, there can be no arguable case given that section 135 of the ITA does not envisage the Minister giving general directions to the DGIR to set aside the assessments and that section 127(3A) of the ITA does not envisage granting exemptions in respect of illegal and/or unlawful tax. Since there is no power to do what is requested of the Minister, there is no basis to seek the declarations sought against the Minister. There is no arguable case for further investigation at the substantive stage. 35 Conclusion

It was submitted that exactly the same applications for leave against the Minister had been allowed by the High Court in other cases. One of those cases, Peguam Negara v CMMT Investment Limited (Civil Appeal No. W-01(IM)-575-10/2021) was upheld by the Court of Appeal. It suffices to say that the said cases are distinguishable on the admitted fact that the specific issues in the instant case were not raised and determined in those cases.

For the foregoing reasons, the application for leave was dismissed. Judge High Court Kuala Lumpur Amarjeet Dated: 23 May 2023 36 Counsel of the Applicant S. Saravana Kumar and Yap Wen Hui Messrs Rosli Dahlan Saravana Partnership Counsel of the Attorney General’s Chamber Muhammad Hidayat bin Wahab, Senior Federal Counsel Attorney General's Chamber Counsel of the Intervener Mohd Harris bin Hanapi, Senior Revenue Counsel, and Mohamad Asyraf bin Zakaria, Revenue Counsel Revenue Attorney, Inland Revenue Board Cases Referred To: 1) WRP Asia Pacific Sdn Bhd v Tenaga Nasional Bhd

4 CLJ 478. 2) Tang Kwor Ham & Ors v Pengurusan Danaharta Nasional Bhd & Ors [2006] 5 MLJ 60. 3) Teh Guat Hong v Perbadanan Tabung Pendidikan Tinggi Nasional [2015] 3 AMR 35 4) Dr Michael Jeyakumar Devaraj v. Peguam Negara Malaysia [2013] 2 CLJ 1009. 5) Tengku Muhammad Fakhry Petra Ibni Sultan Ismail 37 Petra v Yang Maha Mulia Pemangku Raja Kelantan & Ors [2011] 1 MLJ 128. 6) Teng Chang Khim v Badrul Hisham Abdullah & Anor

9 CLJ 630). 7) Dewan Undangan Negeri Selangor & Ors v Mohd Hafarizam Harun [2016] 7 CLJ 143. 8) Hassan Marsom & Ors v Mohd Hady Ya’akop [2018] 7 CLJ 403. 9) Manggai v Government of Sarawak & Anor [1970] 2 MLJ 41). 10) Menteri Besar Negeri Pahang Darul Makmur v Seruan Gemilang Makmur Sdn Bhd [2010] 5 CLJ 123. 11) Mohd Karim Abas & Ors v Ketua Pengarah Jabatan Hal Ehwal Kesatuan Sekerja. 12) Karpal Singh Ram Singh v Ketua Hakim Negara 2011] 4 CLJ 179. 13) Council of Civil Services Unions v Minister for the Civil Service [1985] AC 374. 14) Sivarasa Rasiah v Badan Peguam Malaysia & Anor

2 MLJ 413. 15) Council Of Civil Service Unions v. Minister For The Civil Service [1985] AC 374. 38 16) Members Of The Commission Of Enquiry On The Video Clip Recording Of Images Of A Person Purported To Be An Advocate And Solicitor Speaking On the Telephone On Matters Of Appointment Of Judges V Tun Dato’ Seri Ahmad Fairuz Bin Dato’ Sheikh Abdul Halim [2011] 6 MLJ 490. 17) Re Bukit Sembawang Rubber Co Ltd v Sembawang Estates Ltd [1961] 1 MLJ 269. 18) Winsome Al-Yatama Sdn Bhd & Anor v. Pentadbir Tanah Kota Tinggi [2015] 9 CLJ 110. 19) Zainal bin Haji Nasiruddin v The Registrar of Societies

MLJU 1623. 20) Haris Fathillah Mohamed Ibrahim & Ors v Tan Sri Dato’ Azam Baki & Ors [2023] 3 CLJ 653. 21) Majlis Perbandaran Pulau Pinang v Syarikat Bekerjasama-sama Serbaguna Sungai Gelugor Dengan Tanggungan [1999] 3 CLJ 65. 22) Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ 185. 23) Ketua Pengarah Hasil Dalam Negeri v Perbadanan Kemajuan Ekonomi Negeri Johor [2009] 5 CLJ 518. 39 24) Lower Perak Co-operative Housing Society Berhad v Ketua Pengarah Hasil Dalam Negeri [1994] 3 CLJ 54. 25) Peguam Negara v CMMT Investment Limited (Civil Appeal No. W-01(IM)-575-10/2021). 40 Catchwords ADMINISTRATIVE LAW: Remedies —- judicial review — application for leave — Minister of Finance — did not make the decision on the request by letter to set aside or exempt tax — Sections 135 and 127(3A) of the Income Tax Act 1967 — circumstances where no response amounts to ‘a refusal to make a decision — whether such decision susceptible to judicial review ADMINISTRATIVE LAW: Remedies — judicial review — letter to Minister of Finance — no response — order in the nature of mandamus — discretionary power — whether mandamus can be issued — Whether actual decision required for certiorari 41