SAUJANA TRIANGLE SDN BHD v Ketua Pengarah Hasil Dalam Negeri (BA-25-45-06/2025)

Vide Enclosure 1, the Applicant prays for leave to file for Judicial Review for the following reliefs –

an order of certiorari to quash the Respondent’s decision dated 22.5.2025 –

in the form of notices of additional assessment (Forms JA) for the years of assessment 2018 to 2020;

in the form of notices of assessment (Forms J) for years of assessment 2021 to 2023;

notices pursuant to section 140A(3C) (H2 Notices) for years of assessment 2018 to 2023; (Impugned

(ii) a series of declarations in respect of the Respondent’s assessments.

After careful consideration of the cause papers and submissions on behalf of the Applicants and the Honourable Attorney General Malaysia (AG), this Court dismissed the AG’s objection and allowed Enclosure 1. The following is the reasons for the decision. Background facts

The background facts leading to the Impugned Notices and this application are as follows. The Respondent issued the following Impugned Notices to the Applicant – Taksiran-taksiran YA Notis Taksiran (“Borang J”) (RM) 2021 4,875,960.72 2022 6,021,994.32 2023 4,447,049.04 Surcaj TT Notis-notis di bawah Seksyen 140A(3C) (Notis-notis H2”) (RM) 2018 1,038,907.30 2019 1,244,261.75 2020 1,328,452.85 2021 1,199,556.75 2022 1,274,181.15 2023 1,199,845.20

The Applicant challenges the Impugned Notices on the grounds of illegality, irrationality and/or unreasonableness and legitimate expectation.

The Applicant also seeks a stay of the Impugned Notices until the final and full determination of this application. AG’s objection

The AG objects to Enclosure 1 on the grounds that the application is premature. The Applicant has failed to exhaust the alternative remedy provided under section 99 Income Tax Act 1967 (Act 53).

The Applicant has failed to show that this application presents exceptional circumstances which warrant them bypassing the alternative remedy before filing this application for judicial review instead.

The Applicant argued that they are not precluded from filing for judicial review before exhausting the domestic remedy under Act 53.

The Applicant argues that the Respondent acted without jurisdiction and erroneous application of the law.

In any event, the Applicant submits that the issue relating to domestic remedy should not be raised at leave stage but rather addressed at the substantive stage of their application. Principles of law governing judicial review proceedings

The test applicable in determining the grant of leave for judicial review is settled. In Tang Kwor Ham & Ors v. Pengurusan Danaharta Nasional Bhd & Ors [2006] 5 MLJ 60; [2006] 4 AMR 89; [2006] 1 CLJ 927, Gopal Sri Ram JCA (as His Lordship then was) held at 69 – “the High Court should not go into the merits of the case at the leave stage. Its role is only to see if the application for leave is frivolous. If, for example, the applicant is a busybody, or the application is made out of time or against a person or body that is immunised from being impleaded in legal proceedings then the High Court would be justified in refusing leave in limine. So too will the court be entitled to refuse leave if it is a case where the subject matter of the review is one which by settled law (either written law or the common law) is non-justiciable, eg, proceedings in Parliament (see art 63 of the Federal Constitution).” (WRP Asia Pacific Sdn Bhd v. Tenaga Nasional Bhd [2012] 4 MLJ 296 at 303; [2012] 4 CLJ 478, Dato’ Sri Mohd Najib bin Tun Hi Abdul Razak v. Attorney General & Ors [2020] 3 MLJ 114 at 129; [2025] 6 MLRA 155). Appeal or judicial review?

This Court was mindful that Act 53 provides a domestic remedy for appeal to the Special Commissioners.

In determining whether the Applicant’s grievances should be directed by way of appeal to the Special Commissioner for Income Tax or by way of judicial review to the the High Court, this Court was guided by the latest pronouncement on the issue of is Ketua Pengarah Hasil Dalam Negeri v. Kind Action (M) Sdn Bhd [2025] MLJU 672 decided by the Federal Court on 13.3.2025.

Tengku Maimum CJ held at para [74] – “On alternative remedy, the Court of Appeal held that there is no acid test applicable in judicial review applications and that if a good case is brought before the court for review, for instance, if there is clear illegality on the part of the decision-making authority, then it is in the interest of justice that such application be allowed. The Court of Appeal found that on the facts of the present case, the decision of the appellant in issuing the Disputed Notices was tainted with illegality. There was no error committed by the Court of Appeal in dismissing the appellant’s contention that this was not a proper case for the respondent to bypass the avenue to appeal to SCIT. The finding of the Court of Appeal is supported by the authorities (see Jagdis Singh; and Majlis Perbandaran Pulau Pinang v Syarikat Bekerjasama-Sama Serbaguna Sungai Gelugor Dengan Tanggungan [1999] 3 MLJ 1 (“Sungai Gelugor”). In Jagdis Singh, Hashim Yeop A Sani SCJ (as he then was) said: “A clear principle is reiterated here i.e. it is not a rigid rule that whenever there is an appeal procedure available to the applicant he should be denied judicial review. Judicial review is always at the discretion of the court but where there is another avenue or remedy open to the applicant it will only be exercised in very exceptional circumstances.”. In Sungai Gelugor, this Court stated thus: “The reason for this is that whilst in theory the courts there frequently recite the incantation that alternative remedies must be exhausted before recourse may be had to Judicial Review, in practice, the courts are often much kinder to the applicant with a good case on the merits, who is faced with this hurdle to clear and will most probably entertain this application as an exception … … Speaking generally, it is right to say that if an applicant in judicial review proceedings can demonstrate illegality, that is to say, unlawful treatment, it would be wrong to insist that he exhausts his statutory right of appeal where one is available. Why should illegal action not be nipped in the bud by the quicker, more convenient and adequate remedy of Judicial Review rather than appeal? It is, of course, true that convenience in this context means convenience not only for the parties but also in the public interest. … Having said that we recognize that there are certain classes of cases such as planning, employment cases and tax cases … where a statute provides for a specialised appeal procedure, and so the courts understandably may not grant judicial review but this is always subject to the grant of review in certain cases, for example, where an applicant is able to demonstrate excess of power, or breach of the rules of natural justice.”.

In the same case, Abu Bakar Jais FCJ held at [para 13] – “The Court of Appeal (“COA”) was also not in error in finding that the existence of a domestic remedy will not bar an application for judicial review. Therefore, there is no obligation for the Respondent to go before the SCIT prior to seeking the appropriate remedy by way of judicial review before the HC. The COA is also not erroneous in finding there is no requirement in O. 53 of the Rules of Court 2012 (the ROC2012) that the availability of a domestic remedy will bar an application for judicial review. The courts have long acknowledged, based on landmark Supreme Court and Federal Court decisions, that the availability of an alternative internal remedy in the form of an appeal process will not be a complete bar of an application for judicial review. In this regard the COA had correctly referred to the Supreme Court decision in Government of Malaysia & Anor v Jagdis Singh [197] 2 MLJ 185 where Hashim Yeop A Sani SCJ said as follows: A clear principle is reiterated here i.e. it is not a rigid rule that whenever there is an appeal procedure available to the applicant he should be denied judicial review. Judicial review is always at the discretion of the court but where there is another avenue or remedy open to the applicant it will only be exercised in very exceptional circumstances. The COA also correctly referred to what were said by Edgar Joseph Junior FCJ in delivering judgement in the Federal Court case of Majlis Perbandaran Pulau Pinang v Syarikat Bekerjasama-Sama Serbaguna Sungai Gelugor Dengan Tanggungan [1999] 3 MLJ 1 as follows: Having said that we recognize that there are certain classes of cases such as planning, employment cases and tax cases (see, eg R v Commissioner for the Special Purposes of the Income Tax Acts; ex p Napier [1988] 3 All ER 166; R v Epping Forest DC; ex p ‘Green [1993] 1 COD 81) where a statute provides for a specialised appeal procedure, and so the courts understandably may not grant judicial review but this is always subject to the grant of review in certain cases, for example, where an applicant is able to demonstrate excess or abuse of power, or breach of the rules of natural justice (see Accountant in bankruptcy v Alls of Gillock [1991] SLT 765 Macksville & District Hospital v Mayze (1987) 10 NSWLR 708). (emphasis added) Thus, judicial review would still be applicable following the above decision when there is excess or abuse of power. In the present case before us, there is indeed an excess or abuse of power as the appellant should not have further imposed tax on the respondent under the ITA, having done so under the RPGTA. Therefore, the appellant should not be prohibited in applying for judicial review.”

This Court also took cognisance of Gunalan Muniandy JCA’s dicta in Muhibbah Engineering (M) Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2022] 4 MLJ 660, wherein His Lordship addressed the issue of whether the existence of alternative remedies should be dealt with and adjudicated at the leave stage summarily by examining several decisions by the apex Court and the Court of Appeal. His Lordship held at 671 – “The approach that was taken by the Court of Appeal in two decisions, which we are convinced is correct is well summarised in Bursa Malaysia Securities Bhd v Gan Boon Aun [2009] 4 MLJ 695 as follows: Two decisions of the Court of Appeal are noteworthy of mention here. In Tang Kwor Ham & Ors v Pengurusan Danaharta Nasional Bhd & Ors [2006] 5 MLJ 60; [2006] 1 CLJ 56 the Court of Appeal refers to a two stage process where an application for leave is made and at the leave stage the High Court should not go into the merits of the cases. In QSR Brand Bhd v Suruhanjaya Sekuriti & Anor [2006] 3 MLJ 164; [2006] 2 CLJ 532 two points require mention. The first point for mention is that arguments such as the availability of an alternative remedy go to the merits of the substantive application and ought not to be dealt with at the leave stage. We are in agreement with the view of the Court of Appeal in the above decision that the issue of the existence of an alternative remedy under statute should be canvassed and decided at the substantive stage of an applicant’s JR application. It is to prevent the merits of the substantive application from being dealt with at the early stage of the leave application wherein the applicant is merely required to show on arguable case as to any error of law, excess of jurisdiction or procedural irregularity committed by the public body concerned.”

A perusal of the Applicant’s application show that they have raised substantial legal questions regarding –

the interpretation and application of sections 140A(2) and

Act 53 and the Rules in treating their interest free advances as ‘financial assistance’; and

(ii) the imposition of the surcharge under section 140(3C) Act 53 and whether that provision had a retrospective effect.

This Court accepts the Applicant’s submissions that these are issues that should be ventilated at the substantive stage and that they have met the threshold requirement for leave.

The Court finds that the Applicant has met the threshold requirements for leave to file for Judicial Review. The AG’s objection is dismissed and Enclosure 1 prayers (1) and (4) are allowed with no order as to costs.