Rohas-Euco Industries Bhd v Ketua Pengarah Jabatan Kastam Diraja Malaysia (W-01(A)-802-11/2022)

This is an appeal concerning a claim for a refund of input tax credits under the Goods and Services Tax Act 2014 ( ).

The Appellant, who was the Plaintiff in the High Court, is a private limited company and a registered taxpayer under the GST Act.

The Respondent, who was the Defendant in the High Court, is the Director General of the Royal Malaysian Customs Department.

We heard the appeal on 19th March 2025 and thereafter reserved our decision to deliberate on the submissions advanced by both parties.

Having done so, we now deliver our decision together with the supporting grounds as set out below. BACKGROUND [6] [7] [8] No. Taxable Period Timeline for submission submission date ITC Claim Amount (RM) May 2018 30.6.2018 31.1.2019 635,783.82 June 2018 31.7.2018 31.1.2019 82,745.82 July 2018 31.8.2018 31.1.2019 57,028.46 August 2018 29.12.2018 31.1.2019 60,896.49 TOTAL 836,454.59

On 27th June 2018, the Appellant nonetheless applied to the Respondent for an extension of time to submit its GST returns for the taxable periods of May to August 2018. However, there was no response from the Respondent.

Upon conducting an audit, the Respondent rejec ITC deductions and refused to refund the claimed input tax on the sole ground that the Appellant had filed its GST returns late, thereby breaching 5 audit report is reproduced below: 635,783.82 82,745.82 57,028.46 60,896.49 836,454.59

The Respondent notified the Appellant by letter dated 5th February 2021, stating that the ITC amounting to RM836,211.46 could not be claimed. The said letter is reproduced below

As a result, the Respondent by its further letter dated 28th April 2021 demanded, inter alia, for payment of the aforementioned rejected ITC ( ).

The Appellant, being aggrieved by the Decision, commenced judicial review proceedings in the High Court on 21st the ).

In the Application before the High Court, the Appellant sought the following reliefs (as stated in Bahasa Melayu):

Relif-relif yang dipohon oleh Pemohon adalah seperti berikut: [15] There were essentially two issues put forth in the Application: [16] The learned High Court judge after hearing submissions of the parties dismissed the Application ( ). In the grounds of Judgement reported in [2022] MLRHU 2764, the learned High Court judge held as follows: Section 8(1) of the Repeal Act stipulates that any claim for input tax shall be made within 120 days from the appointed date, in the instant case, 29 December 2018. However, the applicant submitted their GST-03 Form on 31 January 2019. According to the learned SFC, the applicant is not entitled to claim the ITC as it will be in non-compliance with s 8 of the Repeal Act. [30] The applicant took umbrage in the failure of the respondent to grant the extension of time for the company to submit the GST-03 Form. If indeed that is the complaint against the respondent, then the proper approach, in my view, is to seek an order of mandamus for the respondent to extend the time. Once the time is extended, the applicant would therefore be entitled to the ITC claim notwithstanding s 8(1) of the Repeal Act since the time is already enlarged. [31] Learned counsel for the applicant urged me to conclude that the failure of the applicant to submit the GST return within the prescribed time would not justify the rejection of the ITC claim. She even suggested that the respondent had committed an error of law by imposing a different penalty not envisaged under s 41(6) of the GST Act. [32] With respect, I find difficulty in acceding to this line of submission. To begin with, I do not think it is the law that a taxpayer can argue that he is at liberty to submit the GST Return even if it is beyond the time stipulated in the statute. If that is the law, then a taxpayer can submit the GST-03 Form at any time he likes and do so with impunity. [33] Secondly, in arriving at the impugned Decision, the respondent did not impose a different penalty as provided under s 41(6) of the GST Act. The rejection of the ITC claim is simply on the ground that it was filed late and there was no extension of time granted to the applicant. [34] I respectfully agree with the learned SFC that since the applicant had failed to comply with s 8(1) of the Repeal Act, and in the absence of an extension of time, the respondent is, therefore, at liberty to reject the ITC claim. There is, therefore, no "illegality" on the part of the respondent in arriving at the impugned decision; Ketua Pengarah Hasil Dalam Negeri v. Mudah.my Sdn Bhd [2017] MLRAU 80 [17] The Appellant is dissatisfied with the Judgment and has on 1st November 2022 filed its appeal to the Court of Appeal. FINDINGS OF THIS COURT [18] It is evident that our appellate function in the present matter is confined to a review of the Judgment. In this regard, Abdul Rahman Sebli, JCA (later CJ (Sabah & Sarawak)) aptly observed in Iskandar Coast Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2019] 6 MLRA 219 (CA) as follows: "[19] As to the proper approach to be taken by the appellate court in deciding whether to allow or to dismiss an appeal against the exercise of discretion by the lower court, we need only refer to the Federal Court case of Vasudevan Vazhappulli Raman v. T Damodaran PV Raman & Anor [1981] 1 MLRA 24; [1981] 2 MLJ 150; [1981] CLJ (Rep) 101 where Abdoolcader J (as he then was) delivering the judgment of the court said at pp 25-26: "(b) Review of discretion by an appellate court. There is a catenation of cases on this point and it will suffice to cull and refer to a few which restate the well-settled principles. An appellate court can review questions of discretion if it is clearly satisfied that the judge was wrong but there is a presumption that the judge has rightly exercised his discretion and the appellate court must not reverse the judge's decision on a mere "measuring cast" or on a bare balance as the mere idea of discretion involves room for choice and for differences of opinion (Charles Osenton & Co v. Johnston [1942] AC 130, 148 (at p 148) per Lord Wright). The Privy Council in Ratnam v. Cumarasamy & Anor [1964] 1 MLRA 599; [1965] 1 MLJ 228 held that an appellate court will not interfere with the discretion exercised by a lower court unless it is clearly satisfied that the discretion had been exercised on a wrong principle and should have been exercised in a contrary way or that there has been a miscarriage of justice, referring to Evans v. Bartlam [1937] AC 473. The House of Lords, approving the decision of the English Court of Appeal in Ward v. James [1966] 1 QB 273, held to the same effect in Birkett v. James [1978] AC 297 (at pp 317, 326). For good measure, we would refer to the felicitous expression of Goulding J in Re Reed (A Debtor) [1979] 2 All ER 22, 25 on this point (at p 25): ... the duties of an appellate court in such matter as this are, in my judgment, confined to those normally exercisable where the lower court has a discretion, that is to say, we are not justified in setting aside or varying an order simply because we may think we might have come to a different conclusion ourselves on similar material. We can only interfere if either we can see that the court below has applied a wrong principle, or has taken into account matters that are in law irrelevant, or has excluded matters that it ought to have taken into account, or otherwise that no court, properly instructing itself in the law, could have come to the conclusion which in fact was arrived at." See also K-ZAQ (M) Sdn Bhd v. Johnson Matthey Public Limited & Ors [2013] 4 MLRA 650 (CA). [19] Further, in Kenny Heights Development Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2015] 5 CLJ 923 (CA), Abdul Wahab Patail JCA expressed the following view, with emphasis added by us: We make the general observation that courts, acting in accordance with the law, are at all times bound by the legislation placing jurisdiction and authority in specialised bodies such as the SCIT. The legislation specified that the deciding order of the SCIT is final and allowed appeals to the court on question of law and not any grievance. It underlines, within the SCIT's jurisdiction, its authority, and prevents the courts being buried under an avalanche of tax appeals by parties unhappy with the determination of the KPHDN and the SCIT. [25] Courts must also bear in mind the SCIT's specialisation. Dealing with terms and practises of the business and the business community enables them to have a special insight, understanding and appreciation of the evidence and facts, to make the findings drawn from those evidence and facts. While a finding of fact often touches upon the law, the determining factor in the finding is their special insight and appreciation of the facts. Hence, unless it is demonstrated that SCIT had erred on a question of law, resulting in a manifest error in the deciding order, the court cannot intervene, as it would amount to interference contrary to the intent of legislation setting up and empowering the SCIT. (See Lower Perak Co-operative Housing Society Berhad v. Ketua Pengarah Hasil Dalam Negeri, [1994] 3 CLJ 541 [20] At the outset, it is pertinent to set out the relevant provisions of the GST Act, for proper context and analysis:

Interpretation

In this act, unless the context otherwise requires- "tax" means goods and services tax; "input tax" means

tax on any supply of goods or services to a taxable person; and

tax paid or to be paid by a taxable person on any importation of goods, and the goods or services are used or are to be used for the purposes of any business carried on or to be carried on by the taxable person: Provided that where the goods or services are used or are to be used partly for the purposes of any business carried on or to be carried on by the taxable person and partly for other purposes, tax on the supply and importation shall be apportioned so that only so much as is attributable to the purposes of his business is counted as his input tax; "output tax" means tax on any taxable supply of goods or services made by a taxable person in the course or furtherance of his business in Malaysia;

Credit for input tax against output tax

Any taxable person is entitled to credit for so much of his input tax as is allowable under section 39 to be deducted from any output tax that is due from him.

For the purposes of any tax on a taxable supply of goods or services to a taxable person, any flat rate addition included in the consideration of any supply acquired by a registered person from the approved person under section 74 shall be treated as a tax on the supply.

Subject to subsections (4) and (5), where

no output tax is due at the end of any taxable period; or

the amount of the credit entitled by virtue of subsection (1) to the taxable person exceeds the output tax, the amount of the credit or the amount of credit that exceeds the output tax, as the case may be, shall be refunded to the taxable person by the Director General.

The whole or any part of any input tax due as credit to any taxable person in any taxable period may be held over to be credited to any following or subsequen writing or on any direction given by the Director General.

Where at the end of any taxable period any amount is due under subsection

(3), the Director General may withhold payment of the amount if

the taxable person fails to furnish the return under section 41 or to provide any information as required by the Director General; or

the Director General has reasonable grounds to believe that the amount should not be the amount due to the person.

No deduction shall be made under subsection (1) nor shall any refund be made under subsection (3), except on a claim made in the prescribed manner and within the prescribed time.

Where any taxable person has made no taxable supply during a taxable period or any previous taxable period, any refund to be made under subsection

shall be made subject to the conditions imposed by the Director General as he deems fit.

Subject to subsections (5) and (7), any refund to be made by the Director General under subsection (3) shall be made within the prescribed time.

Except as the Director General may otherwise allow

where a taxable person fails to pay his supplier the consideration or any part thereof for the supply of any goods or services made by his supplier to him at the end of the period of six months following the date of supply; and

where the taxable person has credited under subsection (1) or been refunded under subsection (3) the input tax to which the consideration or the part thereof which he failed to pay relates, the taxable person shall account an amount equal to the input tax which shall be deemed as his output tax.

The taxable person shall account the amount deemed as output tax under subsection (9) in the taxable period after the period of six months has elapsed and in accordance with the method which he was required to use when he first credited the input tax and he shall repay the amount to the Director General at the same time as any tax in respect of the taxable period would be due and payable by him.

Where a taxable person

has complied with subsection (10); and

pays his supplier the consideration or any part thereof for the supply of goods or services referred to in paragraph (9)(a), the taxable person shall be entitled to treat an amount equal to the input tax relating to the payment referred to in paragraph (b) as if it were an input tax for the taxable period during which the payment was made.

The whole or any part of tax charged on any supply of goods or services or importation of goods, as may be prescribed, shall be excluded from any credit under this section.

Amount of input tax allowable

The amount of input tax for which any taxable person is entitled to credit in any taxable period shall be so much of the input tax for the period that is allowable and reasonable to be attributable, as may be prescribed, to the following supplies made or to be made by the taxable person in the course or furtherance of any business in Malaysia:

any taxable supply, including a taxable supply which is disregarded under this act;

any supply made outside Malaysia which would be a taxable supply if made in Malaysia; or

any other supply as may be prescribed.

Input tax attributable to any exempt supply shall be treated as input tax attributable to a taxable supply-

where the value of all exempt supplies would be less than the prescribed amount and less than the prescribed proportion of the total value of all supplies; or

in other prescribed circumstances.

Furnishing of returns and payment of tax

Every taxable person shall, in respect of his taxable period, account for the tax in a return as may be prescribed and the return shall be furnished to the Director General in the prescribed manner not later than the last day of the month following after the end of his taxable period to which the return relates.

Where a taxable period has been varied under subsection 40(5) and notwithstanding subsection (1), the return shall be furnished not later than the last day of the thirty days from the end of the varied taxable period.

Any person who-

ceases to be liable to be registered under section 20; or

ceases to be registered under section 24, shall, not later than thirty days after so ceasing or such later date as the Director General may allow, furnish a return containing particulars as the Director General may determine in respect of that part of the last taxable period during which the person was registered.

Any taxable person who is required to furnish a return under this section shall pay to the Director General the amount of tax due and payable by him in respect of the taxable period to which the return relates not later than the last day on which he is required to furnish the return.

The return referred to in subsections (1), (2) and (3) shall be furnished whether or not there is tax to be paid.

Any person who fails to furnish the return as required under subsection (1),

or (3) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

Any person who fails to pay to the Director General the amount of tax due and payable under subsection (4) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

Where any tax due and payable is not paid wholly or partly by any taxable person after the last day on which it is due and payable under subsection (4) and no prosecution is instituted, the taxable person shall pay:

for the first thirty-day period that the tax is not paid wholly or partly after the expiry of the period specified under subsection (4), a penalty of ten per cent of the amount of tax remain unpaid;

for the second thirty-day period that the tax is not paid wholly or partly after the expiry of the period specified under subsection (4), an additional penalty of fifteen per cent of the amount of tax remain unpaid; and

for the third thirty-day period that the tax is not paid wholly or partly after the expiry of the period specified under subsection (4), an additional penalty of fifteen per cent of the amount of tax remain unpaid.

Subject to subsection (11), prosecution for the offence under subsection (7) may be instituted after the expiry of the period specified in paragraph (8) (c).

The court may order that any taxable person who is convicted for the offence under subsection (7) shall pay the penalty as specified in subsection

(8).

No prosecution for the offence under subsection (7) shall be instituted against the taxable person who has paid the amount of tax due and payable and the penalty specified under subsection (8) within the period specified in subsection (8). [21] It is equally necessary to refer to the relevant provisions of the GST Repeal Act, for completeness and context:

Continuance of liability etc.

Notwithstanding the repeal of the goods and services act 2014-

any liability incurred may be enforced; or

any goods and services tax due, overpaid or erroneously paid may be collected, refunded or remitted, under the repealed act as if the repealed act had not been repealed.

Notwithstanding the repeal of the goods and services act 2014, sections 178, 181 and 191 of the repealed act shall continue to remain in operation after the appointed date.

Furnishing of return for the last taxable period and payment of goods and services tax

Notwithstanding section 40 of the repealed act, any taxable period that begins before the appointed date and ends after the appointed date shall be deemed to end on the appointed date.

The person who is registered under the repealed act shall-

furnish the return for all supplies made in the taxable period referred to in subsection (1) as at the appointed date; and

pay the amount of the goods and services tax due and payable relating to the supplies, to the Director General not later than one hundred and twenty days from the appointed date.

Claim for input tax and refund

Any input tax under the repealed act which has not been claimed before the appointed date shall be claimed in the return furnished under paragraph 6(2)(a) within one hundred and twenty days from the appointed date, and that claim shall be considered as the final claim for all input tax.

Subject to verification, audit or investigation, any refund for-

any input tax under section 38 of the repealed act which has not been made by the Director General on the appointed date; or

any input tax relating to the claim made under subsection (1), shall be paid by the Director General within six years from the appointed date. The GST Repeal Act came into force on 1st September 2018. [22] Having considered the submissions advanced by both parties in support of their respective positions, we take the view that the issues for determination in the High Court, as well as the subject matter under review in this appeal, are questions of law concerning statutory interpretation, viz. the GST Act and the GST Repeal Act. [23] In this context, we find it useful to reiterate the settled law on the interpretation of tax and revenue statutes. [24] It is provided as follows in Article 96 of the Federal Constitution:

No taxation unless authorised by law No tax or rate shall be levied by or for the purposes of the Federation except by or under the authority of federal law. [25] In Palm Oil Research and Development Board Malaysia & Anor v. Premium Vegetable Oils Sdn Bhd [2004] 2 CLJ 265 (FC), Gopal Sri Ram JCA (later FCJ) held as follows with emphasis added by us: for, it declares by its own terms in art. 4(1) that it is the supreme law. It follows that what English lawyers refer to as "administrative law" or "public law" has no separate existence dehors the Constitution in our jurisdiction. All principles of administrative law or public law must find their place within the Constitution. These principles are to be derived through an interpretation of those provisions falling within Part II of the Constitution which guarantee to our citizens all those fundamental rights that are inherent in all human beings. It is the solemn duty of the judicial arm of Government - the courts who are the guardians of constitutional rights - to interpret the fundamental rights provisions in Part II of the Constitution prismatically, so that our citizens obtain the full benefit and value of those rights. And it is in this simple way, through the exercise of the court's interpretive jurisdiction that our public law gains momentum. Accordingly, it cannot be over-emphasised that on no account should our courts adopt a narrow and pedantic approach to constitutional interpretation. In other words, if a person is to be made liable for a tax, charge or other levy, such liability must be expressed in plain and unambiguous language in the particular statute. If Parliament does not do so, then it is not open to a delegate of the power to impose the levy to make the identification. Both these propositions are well settled and have been expressed on more than one occasion. Thus, in Comptroller-General of Inland Revenue, Malaysia v. T [1969] CLJU 31; [1969] 1 LNS 31; [1970] 2 MLJ 35, Gill FJ, in relation to the first of the propositions, said: In the absence of a clear intention that tax should be imposed, the respondent is not liable to payment for the sum granted for the abrogation of his contract. It is an important canon in the construction of revenue Acts that the subject is not to be taxed unless there are clear words in the Act imposing such a tax. In this connection, Lord Blackburn said in the House of Lords in Coltness Iron Company v. Black [1880-81] 6 App Cas 315, 330: No tax can be imposed on the subject without words in an Act of Parliament clearly shewing an intention to lay a burden on him.... and I think the only safe rule is to look at the words of the enactment and see what is the intention expressed by those words. The next issue posed by the appellant is whether the 1979 Act as a taxing statute should receive a purposive interpretation. I must be forgiven if express my astonishment at the need for a question the answer to which is so obvious and covered by high authority. Yet, we were regaled by authorities by counsel on both sides, each urging a different resolution of the question. Now, when it comes to a question of statutory interpretation, this court - or indeed any court - is not bound to select one or the other of the rival interpretations advanced by counsel. The court should think for itself and come to its own conclusion because the responsibility to interpret a statute rests with the court. So, there is no doubt that even a taxing statute must be given a purposive approach. But that is quite different from saying, as learned counsel for the appellant is saying, that a taxing or revenue law statute may be read so as to confer power upon a member of the administration to collect a tax when there is neither an identification of the taxpayer nor conferment of a power to make subsidiary legislation in that behalf. If this court were to accept the argument of counsel for the appellant, then we would not be promoting the purpose or object of the 1979 Act but be defeating it. For, in such event we would, through unauthorised legislative power, be re-writing statute. In my judgment s. 17A has no impact upon the well established guidelines applied by courts from time immemorial when interpreting a taxing statute. Section 17A and these guidelines co-exist harmoniously for they operate in entirely different spheres when aiding a court in the exercise of its interpretive jurisdiction. The correct approach to be adopted by a court when interpreting a taxing statute is that set out in the advice of the Privy Council delivered by Lord Donovan in Mangin v. Inland Revenue Commissioner [1971] AC 739: First, the words are to be given their ordinary meaning. They are not to be given some other meaning simply because their object is to frustrate legitimate tax avoidance devices. As Turner J said in his (albeit dissenting) judgment in Marx v. Inland Revenue Commissioner [1970] NZLR 182 at 208, moral precepts are not applicable to the interpretation of revenue statutes. Secondly, '... one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption so to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.' (Per Rowlatt J in Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 1 KB 64 at 71, approved by Viscount Simons LC in Canadian Eagle Oil Co Ltd v. Regeim [1945] 2 All ER 499, [1946] AC 119. Thirdly, the object of the construction of a statute being to ascertain the will of the legislature, it may be presumed that neither injustice nor absurdity was intended. If therefore a literal interpretation would produce such a result, and the language admits of an interpretation which would avoid it, then such an interpretation may be adopted. Fourthly, the history of an enactment and the reasons which led to its being passed may be used as an aid to its construction. In my respectful view, s. 17A of the Interpretation Acts 1948 and 1967 neatly fits into and is complementary with the third principle in the judgment of Lord Donovan. Hence, the governing principle is this. When construing a taxing or other statute, the sole function of the court is to discover the true intention of Parliament. In that process, the court is under a duty to adopt an approach that produces neither injustice nor absurdity: in other words, an approach that promotes the purpose or object underlying the particular statute albeit that such purpose or object is not expressly set out therein. Imposing a tax by means of subsidiary legislation on a person not identified in the parent Act produces an absurd and unjust result and therefore does promote its purpose or object First issue [26] Hence, with respect to the first issue, namely whether s.8 of the GST Appellant, we noticed it is not in dispute that the Appellant ordinarily has the vested right of refund of input tax credits pursuant to ss.38 and 39 GST Act. [27] The Respondent, however, specifically relies on s.8(1) of the GST had ceased due to the late filing of its GST returns. This is refuted by the Appellant. [28] Upon careful scrutiny of ss.4 and 8 of the GST Repeal Act read ITC claim for August 2018. The ITC claims for the preceding months of May to July 2018, however, remain unaffected by virtue of s.41(1) of the GST Act read together with s.4 of the GST Repeal Act. This conclusion is further supported by ss.2(3) and 30(1)(b) of the Interpretation Acts 1948 and 1967, which provide as follows:

Application

Subject to this section, PART I of this Act shall apply for the interpretation of and otherwise in relation to:

this Act and all acts of Parliament enacted after 18th May 1967;

all laws, whether enacted before or after the commencement of this Act, revised under the Revision of Laws Act 1968;

all subsidiary legislation made under this Act and under acts of Parliament enacted after the commencement of this Act;

all subsidiary legislation, whether made before or after the commencement of this Act, revised under the Revision of Laws Act 1968;

all subsidiary legislation made after the 31st December 1968, under the laws revised under the Revision of Laws Act 1968.

PART I shall not apply for the interpretation of or otherwise in relation to any written law not enumerated in subsection (1).

PART I shall not apply where there is:

express provision to the contrary; or

something in the subject or context inconsistent with or repugnant to its application.

Matters not affected by repeal

The repeal of a written law in whole or in part shall not:

affect the previous operation of the repealed law or anything duly done or suffered thereunder; or

affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed law; or

affect any penalty, forfeiture or punishment incurred in respect of any offence committed under the repealed law; or

affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the repealing law had not been made.

Without prejudice to the generality of subsection (1):

the repeal of a written law which adopts, extends or applies another written law shall not:

invalidate the adoption, extension or application; or

(ii) prejudicially affect the continued operation of the adopted, extended or applied law; and

the repeal of a written law which amends another written law shall not:

invalidate the amendments made by the repealed law; or

(ii) prejudicially affect the continued operation of that other law as amended. [29] Further support is found in Ketua Pengarah Kastam v. Metrogold Commercial Sdn Bhd [2024] 2 MLRA 468 (CA), where Mohd Nazlan Mohd Ghazali JCA held as follows, with emphasis added by us: Thirdly, the plain fact is the respondent incurred the GST amount and made the claim for the requisite ITC refund way before the repeal of the GST Act on the basis of its entitlement to a refund under the aforesaid s 38(3) of the GST Act, before the repeal of the GST Act. It is not an exaggeration for the respondent to say that it is unfair that the respondent had to suffer the lower input tax refund due to the repeal of the GST Act over which it had no control. [97] As can be readily appreciated from its very words, for present purposes, s 4(1)(b) of the GST Repeal Act in essence means that notwithstanding the repeal of the GST Act, any GST overpaid may be refunded under the GST Act as if it had not been repealed See also National Land Co-operative Society Ltd v. Director General of Inland Revenue [1994] 1 MLJ 99 (SC) and Society La Salle Brothers v. Ketua Pengarah Hasil Dalam Negeri [2018] 1 MLJ 376 (CA). [30] In the premises, we find and hold that s.8(1) of the GST Repeal Act applies only to the Appella ITC claims for May to July 2018. [31] That notwithstanding, we do not find s.8(1) of the GST Repeal Act in any way provides that the Respondent is no longer obliged to refund the relevant ITC for August 2018 to the Appellant because of the late submission of its GST return for August 2018. The answer to the first issue is hence negative. Second issue [32] As for the second issue, namely comply with sections 6(2)(a) and 8(1) of the GST Repeal Act entitles the Respondent to forfeit the ITC due to the Appellant for the entire tax period from May to August 2018, we find and hold that the Respondent, by virtue of section 38(5) of the GST Act, is entitled to withhold the refund of the App late submission. However, in our view, such withholding cannot be indefinite so as to amount to a forfeiture. The Respondent remains duty-bound to refund the ITC if it is found to be valid, notwithstanding the late submission. Additionally, we find that the Appellant was not recalcitrant nor acted reasonably in failing to submit the GST returns at the material time. It was unavoidable due to the Appellant s ERP system transition. [33] There is, however, no provision in either the GST Act or the GST Repeal Act that authorises the forfeiture of input tax credits. That said, this does not mean that the Appellant is to be exonerated with impunity. The appropriate penalties that may be imposed on the Appellant for late submission are those prescribed in section 41(6) of the GST Act, namely a fine and / or imprisonment. We therefore also answer the second issue in the negative. [34] It is apparent that the learned High Court Judge dismissed the A was made late and thus the Respondent was at liberty to reject it. The High Court Judge not to be tainted with illegality, relying on Ketua Pengarah Hasil Dalam Negeri v. Mudah.my Sdn Bhd [2017] MLRAU 80 (CA). However, we observe that there is neither evidence nor submission by the defective. [35] We have carefully considered Ketua Pengarah Hasil Dalam Negeri v. Mudah.my Sdn Bhd (supra) and are satisfied that the factual matrix in that case differs materially from the present case. That case did not concern a refusal or failure by the Director General of Inland Revenue entitlement. [36] With respect, and for the reasons set out in our answers to both issues requiring determination, we find and hold that there was no legal basis for the R Decision, which resulted in the forfeiture of the . The aforesaid forfeiture is, in other words, illegal. There is therefore a manifest error in the Judgment which, in our view, warrants appellate intervention. CONCLUSION [37] Judgment of the High Court is set aside and the judicial review Application is allowed. We therefore enter judgment for the Appellant in terms of prayers 2(1) (a) to (d) of its Statement filed pursuant to Order 53 Rule 3(2) of the Rules of Court 2012. The Respondent shall pay the Appellant the sum of RM20,000.00 as costs here and below. Dated this 28th July 2025 Sgd. LIM CHONG FONG COURT OF APPEAL JUDGE Legal Representation: Counsel for the Appellant Solicitors for the Appellant MESSRS. LEE HISHAMMUDDIN ALLEN & GLEDHILL Level 6, Menara 1 Dutamas, Solaris Dutamas, No. 1, Jalan Dutamas 1, 50480 Kuala Lumpur. Counsel for the Respondent Solicitors for Respondent ATTORNEY GENERAL CHAMBERS Jabatan Peguam Negara Malaysia, Cawangan Wilayah Persekutuan Kuala Lumpur, Unit Guaman, Tingkat 5 (Sayap Kanan) Wisma Chase Perdana, Off Jalan Semantan, Damansara Heights, 50512, Kuala Lumpur. STATUTE/LEGISLATION REFERRED TO: ss. 2, 38, 39 and 41 of the Good and Services Tax Act 2014; ss. 4, 6, and 8 of the Goods and Services Tax (Repeal) Act 2018; Art. 96 of Federal Constitution; ss.2(3) and 30(1)(b) of the Interpretation Acts 1948. CASES REFERRED TO: Iskandar Coast Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2019] 6 MLRA 219; K-ZAQ (M) Sdn Bhd v. Johnson Matthey Public Limited & Ors [2013] 4 MLRA 650; Kenny Heights Development Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2015] 5 CLJ 923; Palm Oil Research and Development Board Malaysia & Anor v. Premium Vegetable Oils sdn Bhd [2004] 2 CLJ 265; Ketua Pengarah Kastam v. Metrogold Commercial Sdn Bhd [2024] 2 MLRA 468; National Land Co-operative Society Ltd v. Director General of Inland Revenue [1994] 1 MLJ 99; Society La Salle Brothers v. Ketua Pengarah Hasil Dalam Negeri [2018] 1 MLJ 376; Ketua Pengarah Hasil Dalam Negeri v. Mudah.my Sdn Bhd [2017] MLRAU 80.