Secret Ingredients Sdn. Bhd. (Dahulu Dikenali Sebagai Formula Continent Sdn. Bhd.) v Kerajaan Malaysia (JA-12ANCvC-14-06/2024)

This is an appeal by the Appellant (“Defendant”) against the Sessions Court decision dated 6 June 2024, granting summary judgment to the Respondent (“Plaintiff”) pursuant to Order 14 Rules of Court 2012 (ROC2012). The appeal was first heard before Justice Nurulhuda Nur’aini binti Mohamad Nor on 15 July 2025 and was adjourned to 27 August 2025 for further submissions. Following Her Ladyship's transfer to the Kuala Lumpur High Court, the matter is now before me. For ease of reference, parties are referred to by their previous names as they appeared before the Sessions Court.

In arriving at my decision, I referred to the cause papers, the Parties' written, additional and supplemental submissions, the bundles of authorities filed by both parties and the CMS recording of the hearing on 15 July 2025. This is my decision.

The Plaintiff’s claim against the Defendant was for tax due and payable amounting to RM 610,468.88 for the years of assessment 2020, 2019, 2018 (additional), 2017 (additional) and inclusive of 5% interest. On 6 June 2024, the Sessions Court allowed Plaintiff’s application for summary judgment under Order 14 ROC 2012. Dissatisfied, the Defendant appealed.

The sole issue argued on appeal was whether service of the Notices of Assessment (Additional) for years 2018 and 2017 and Notices of Assessment for years 2019 and 2020 pursuant to subsection 145(2) Income Tax Act 1967 (Revised 1971) [Act 53] was duly affected. At the hearing before me, the counsel for the Defendant further submitted that the argument is now focused on the Notices of Assessment (Additional) for years 2018 and 2017 only.

The Defendant contends that it has never received any of the notices and, therefore, could not appeal to the Special Commissioners of Income Tax. It argues the notices were not sent to its registered address or last known address at No. 23, Jalan Sulam, Taman Sentosa, 80150 Johor Bahru, Johor (“Johor address”). The Defendant says the Plaintiff knew of that Johor address as it appears in the Writ of Summons filed in the court below.

The Plaintiff's position is that service was duly effected under subparagraph 145(2)(a) of Act 53 by posting the notices to the Defendant’s last known address at No.16C, 3rd Floor, Jalan Pandan S/N 7PzdWphtckeiKmIuPjevzA 3/6A, Pandan Jaya, Kuala Lumpur (“Kuala Lumpur address”). According to the Plaintiff, for the purpose of issuing the notices, the Kuala Lumpur address was the Defendant's last known address in its record. This is based on the Company Income Tax Return Form (Borang C) Year of Assessment 2018 filed by the Defendant through the e-filing platform pursuant to section 77A of Act 53. Any changes to the Defendant’s address or a change of the last known address from the Kuala Lumpur address were not communicated to the Plaintiff.

At the outset, this Court is mindful that, in exercising its appellate jurisdiction, it should be slow to interfere with the decision of the trial court unless it is shown that the trial court is plainly wrong when arriving at the decision under appeal [see: UEM Group Bhd v. Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785; Azman Mahmood & Anor v. SJ Securities Sdn Bhd [2012] 6 CLJ 573; MMC Oil & Gas Engineering Sdn Bhd v. Tan Bock Kwee & Sons Sdn Bhd [2016] 4 CLJ 665].

The appellate function has been restated in the recent Court of Appeal case of Ahmad Rubil Ahmad & Ors v. Minda Muhibah Sdn Bhd & Anor [2025] CLJU 1798, in reference to Civil and Criminal Appeals in Malaysia, 4th Edition, as follows: S/N 7PzdWphtckeiKmIuPjevzA “[24] In his book, Civil and Criminal Appeals in Malaysia, 4th Edition, learned author Tan Kay Heng has summarised the duty of the appellate court as follows: [6.013] However, the appellate court is under a duty to intervene on the finding of fact of the trial court where the trial court has so fundamentally misdirected itself that one may safely say that no reasonable court which had properly directed itself and asked the correct questions would have arrived at the same conclusion, which means an appellate court would carry out an examination of the reasoning in respect of the finding of fact in the light of all the evidence adduced before the trial court. An appellate court should not hesitate to disturb the findings of the trial court if there were failure on the part of the trial court to appreciate the issues and/or evidence, to properly and adequately evaluate the evidence, to make the proper findings and inferences or deductions, to give reasons, and or to apply the correct law to the facts”.

Malaysia’s income tax regime under Act 53 is based on the principle of “Pay First, Dispute Later”. Under this principle, taxes become overdue immediately upon assessment, regardless of whether an appeal is filed. This was explained in the case of Mohd Najib Hj Abd Razak v. Government of Malaysia & Another appeal [2023] 10 CLJ 329 when quoting the Federal Court in the case of Arumugam Pillai v. Government of Malaysia [1980] CLJU 3 ; [1980] 1 LNS 3, which ruled that – …“The tax legislation clearly intends that the tax as assessed should first be paid and therefor makes provisions that such part of the tax paid as shall be determine at the final “accounting” to S/N 7PzdWphtckeiKmIuPjevzA be due and payable shall be refunded. This provision of “pay first and talk afterwards” may be arguably a harsh one but it is an intentional provision of the legislature, having regard to the incidence of tax evasion”.

The latter part explained in the case of Arumugam Pillai refers to the taxpayer's right to challenge or appeal on the assessments as provided in sections 99,100, and 101 of Act 53. However, in this case, the crucial issue for the Defendant is how the Defendant can appeal when it hasn’t received the notices.

Section 145 of Act 53 provides for the services of notices as below — “145. Service of notices

A notice relating to tax which is sent by ordinary or registered post shall be deemed to have been served on the person (including a partnership) to whom it is addressed on the day succeeding the day on which the notice would have been received in the ordinary course of post if it is addressed —

in the case of a company, partnership or body of persons having a registered office in Malaysia —

to the registered office;

(ii) to its last known address; or

(iii) to any person authorised by it to accept service of process;” S/N 7PzdWphtckeiKmIuPjevzA

The discussion on the operation of subsection 145 of Act 53, to my mind, could be divided into the following parts:

types of service;

deeming provision on service; and

for the company, choices of addresses to serve the notices

First, the connotation of the word “or” gives flexibility to the Inland Revenue as to the mode and address: either by ordinary post or registered post, whichever is convenient. Secondly, once properly posted, the deeming provision operates [see Kerajaan Malaysia v. Zaitun Industries Sdn Bhd. [2001] 1 LNS 69; Government of Malaysia v. Mohd Najib bin Haji Abd Razak [2020] CLJU 754].

In the more recent case of Government of Malaysia v. Shafee Zaman Sikandar Batcha [2024] CLJU 3122, the Court explained the mechanics of service provided in subsection 145(2) of Act 53 by referring to the case of Kerajaan Malaysia v. Central Strata Sdn Bhd [2013] 8 CLJ 632 including application of the presumption under section 114(e) of the Evidence Act 1950 to official acts. The Court explained as follows — “[11] In Kerajaan Malaysia v. Central Strata Sdn Bhd [2013] 8 CLJ 632; [2013] AMTC 490; [2013] 5 MLJ 728, HC, it was held that section 145 does not require the maintenance of a register or record of notices sent by ordinary post as proof of posting. The court in Central Strata Sdn Bhd (supra.) observed that if Parliament had intended such a requirement, it would have S/N 7PzdWphtckeiKmIuPjevzA stipulated posting by way of certificate of posting. The court in Central Strata (supra.) reasoned among others that the presumption under section 114(e) of the Evidence Act 1950 should apply in such a case as it involved an official act. [12] In his judgment, His Lordship Lee Swee Seng JC (now JCA) in Central Strata (supra.) said as follows: "[24] This is a fit and proper case to call in aid the provision of s. 114(e) of the Evidence Act 1950 and my learned brother Varghese George JC (as he was then) has very eloquently explained why in a case like this, the court should safely invoke the assistance of s. 114(e) of the Evidence Act as follows in the Syarikat Mu/iajaya's case (supra). I cannot improve on what my learned brother had expounded and so I would set out in extenso his exegesis as follows: Commenting on the general purport of section 114 of the Evidence Act, 1950, Thompson CJ had this to say in Synn Lee & Co Ltd v. Bank of China [1962] CLJU 189; [1962] 28 MLJ 395: Now, section 114 of the Evidence Ordinance is not mandatory but gives the Court a discretion. It says that the Court may presume the existence of facts which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, and it furnishes a number of illustrations of circumstances in which this discretion may be exercised, (emphasis added). [25] The presumption permitted to be inferred by the courts under the said illustration (e) to s. 114 has been resorted to by the court in various other scenario involving official or judicial acts. Hishamudin Yunus J in Bank Kerjasama S/N 7PzdWphtckeiKmIuPjevzA Rakyat Malaysia Bhd v. YM Tunku Maryam Tunku Zainal Abidin & Anor [2000] 7 CLJ 249 applying the presumption in a case involving an order for sale made by a Pentadbir Tanah Daerah summed up the policy and intent behind the presumption in the following manner: The rule embodied in this illustration is a particular application of the maxim 'omnia praesumuntar rite essa acta', ie, all acts are presumed to have rightly and regularly done. (Sarkar on Evidence, 15th. Edn, 1999, p. 1659). 'Regularly performed' means performed with due regard to procedure (Sarkar on Evidence p. 1663 citing Jagdeo v. Bulaki, 68 IC 226). The basis of the presumption is that normally courts of justice uphold official and judicial and other acts rather than render them inoperative. The presumption arises wholly on grounds of public policy (Sarkar on Evidence, p. 1660 citing Kailash Chand Gaggarv. State of Assam [1993] (2) Crimes 700 702 (Gau))”.

Thirdly, for service of notices to the companies, like Defendants, it is provided in subparagraph 145(2)(a) of Act 53, which lists out addresses to be used for the service. Again, the word “or” confers flexibility to the Plaintiff in serving the notices. The Court in Kerajaan Malaysia lwn. Saratoga Sdn. Bhd. [2006] 7 CLJ 229 explained the following – “[13] Jika dilihat kepada peruntukan s. 145(1) Akta, notis boleh dihantar melalui serahan;

serahan secara kendiri

serahan secara pos biasa

serahan secara pos berdaftar …. [17] Di dalam tindakan ini Notis Taksiran dihantar ke alamat Level 10 Grand Season No 72, Jalan Pahang Kuala Lumpur sebagaimana alamat yang tertera di dalam eks. SE2. Alamat tersebut diberikan oleh defendan sendiri di dalam Borang Retan yang dikembalikan oleh defendan. Oleh itu Notis Taksiran 1999 itu dihantar ke alamat terakhir (last known address) dan ini sudah mencukupi untuk mematuhi peruntukan s. 145(2) Akta. Pada pendapat saya berdasarkan keterangan di atas dakwaan defendan bahawa mereka tidak menerima Notis Taksiran adalah tidak berasas”.

I am also guided by the decision in the case of Kerajaan Malaysia v Neraca Untung Sdn Bhd [2009] CLJU 575; [2009] 1 LNS 575 as follows— “4. It would seem that pursuant to section 145(2) of the Income Tax Act 1967, as the said 1997, (Additional) notice was never returned undelivered, it is deemed to have been received by the Respondent. However the Respondent did not respond to both the notices. …

The sole issue in this appeal is whether the 1997 (Additional) notice had been served or deemed to have been received by the Respondent. …

The relevant provisions relating to service of notices in income tax matters are found in section 145 of the Income Tax Act 1967; section 145(1) and (2) read as follows:- "145. (1) Subject to any express provision of this Act, for the purposes of this Act notices may be served personally or by ordinary or registered post.

A notice relating to tax which is sent by ordinary or registered post shall be deemed to have been served on the person (including a partnership) to whom it is addressed on the day succeeding the day on which the notice would have been received in the ordinary course of post if it is addressed:

in the case of a company, partnership or body of persons having a registered office in Malaysia:-

to that registered office;

(ii) to its last known address; or

(iii) to any person authorized by it to accept service of process." S/N 7PzdWphtckeiKmIuPjevzA

The last known address of the Respondent for the purpose of correspondence was provided by the Respondent's tax agent via their letter dated 11.12.1998 to the Appellant….

The same address was also based on the Respondent's return form (Form C) dated 30.8.1997 which was also sent to the Appellant by the Respondent's tax agent (at pages 152-153 of the Appeal Records).

Based on the above evidence, this Court is convinced and satisfied that the 1997 (Additional) notice has been properly sent to and served on the Respondent at its last known address in accordance with section 145(1) and (2) of the Income Tax Act

The notice must be deemed or presumed to have been served on the Respondent. The Respondent has failed to rebut the presumption. It is nor disputed that the last known address of the Respondent was provided by the Respondent's tax agent personally. Hence, the Respondent's claim that the 1997 (Additional) notice was not received cannot hold water”.

In the Defendant’s appeal before me, upon perusing the Appeal Record, I observe the following-

Notice of Assessment (Additional) for year 2017 (dated 16

Notice of Assessment (Additional) for year 2018 (dated 16

Notice of Assessment for year 2019 (dated 27 February 2020);

Notice of Assessment for the year 2020 (dated 25 October 2021), were issued to Secret Ingredients Sdn. Bhd, addressed to 16C 3rd Floor, Jalan Pandan 3/6A, Pandan Jaya, 55100 Kuala Lumpur.

based on paragraph 9.3 and exhibit MRCY-2 of the Plaintiff Affidavit in Reply II filed at the Sessions Court (Enc. 10) at pages 188-210 of the Appeal Record, Part B, (Jilid 1), the notices have been sent by ordinary post;

Income Tax Return Form, also known as Form C, for the Assessment year of 2018, filed by the Defendant stated three different addresses, which are:

the registered address being: 2-20-12, Kompleks Hijauan Desa, No.85 Jalan Desa Bakti, 58000 Kuala Lumpur;

(ii) the correspondence address being: 16C 3rd Floor, Jalan Pandan 3/6A, Pandan Jaya, 55100 Kuala Lumpur; and

(iii) the business address being: 1&3, Jalan Istimewa 4, Taman Perindustrian Desa Cemerlang, 81800 Bandar Ulu Tiram, Johor;

the Defendant filed an Appeal Notice to the Special Commissioner of Income Tax pursuant to subsection 99(1) of Act 53 in Form Q for the Notice of Assessment for years 2019 and

Both notices were sent to the Defendant at the Kuala Lumpur address, similar to the Additional Notices for years 2017 S/N 7PzdWphtckeiKmIuPjevzA and 2018. I assumed this must be the reason the Defendant didn’t pursue the Notice of Assessment for the years 2019 and 2020.

I also observed that there is no documentary evidence on the appeal record showing that the Defendant had notified any change of any addresses mentioned in subparagraph 17(f) above to the Director General of Inland Revenue. Section 89 of Act 53 provides for the change of address as follows — “Every person chargeable to tax who changes his address in Malaysia (being an address furnished by him to the Director General) for another address in Malaysia shall within three months inform the Director General of the change by notice in the prescribed form”.

In the case of Government of Malaysia v. KPM Modal Sdn Bhd [2002] 6 CLJ 221, the Court explained as follows — “…What would be the duty of the defendant as a taxpayer in the context of a change of address under the Income Tax Act 1967 (Revised 1971) (Act 53)? Section 89 of the Income Tax Act 1967 (Revised 1971) (Act 53) imposes a burden on the defendant as a taxpayer. It enacts as follows: Every person chargeable to tax who changes his address in Malaysia (being an address furnished by him to the Director General) for another address in Malaysia shall within three months inform the Director General of the change by notice in writing. S/N 7PzdWphtckeiKmIuPjevzA And it imposes a duty on the taxpayer to inform the Director General within three months of any change of address by notice in writing. By virtue of s. 2 of the Income Tax Act 1967 (Revised 1971) (Act 53), the designation "Director General" would refer to the Director General of Inland Revenue and, by the same section of the same Act, the word "person" has been defined to include "a company, a body of persons and a corporation sole. "In my judgment, as a company and as a taxpayer it was the bounden duty of the defendant to inform the Director General of Inland Revenue of the change of its registered office to Jalan Lima within the prescribed time period bearing in mind that the defendant had admitted that it had paid a sum of RM53,139.45 as tax for the 1979 year of assessment. The defendant knew that it must pay its taxes and the failure to inform the Director General of Inland Revenue of the change of its registered office to Jalan Lima must be held against the defendant. This would be the striking feature of the present appeal and by all counts it puts it way above those other cases that were alluded to in this judgment”.

The same position was explained in the case of Crane Port Systems Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2016] 9 CLJ 401 as follows- “[27]Section 89 of the ITA makes it mandatory for every person chargeable to tax to notify the respondent within three months of the change of address by notice in writing. By virtue of this provision the applicant is duty bound to inform the respondent of the change of its registered address by way of a written notice. For purposes of the ITA "Any person" mentioned in s. 89, would include the taxpayer's company. Like any other taxpayers, the applicant has a duty to notify the respondent its latest address and/or any change of its address”.

Both cases highlighted that the burden is on the Defendant to inform the Plaintiff in a written notice of any change of address, within three months from the change. The most crucial part is that this is mandatory. Hence, with respect, I found the Defendant's reliance on the case of The Government of Malaysia v. DYG Halina Awg Mohamad Zaipiri [2022] 1 SMC 570, is misconceived. The principle explained in the case of Government of Malaysia v Mohd Najib bin Haji Abd Razak is clear that — “[3] It is pertinent to note that under the tax recovery system of this country, as provided for under the ITA 1967, when the proceedings are commenced under O14 of the ROC 2012, the trite legal principle, namely that the Defendant has to raise triable issues in order the avoid a summary judgment being entered, does not operate.”

Based on the observation above, this Court is satisfied that —

Defendant failed to notify the Director General of any changes of addresses from what was declared in Form C, mentioned in subparagraph 17(f). In this case, the change from the Kuala Lumpur address to the Johor Bahru address was not communicated in accordance with Section 89 of Act 53. Therefore, the last known address of the Defendant and the last known registered address of the Defendant for issuance of the four notices of assessment are addresses in the aforesaid Form C. I hold that Plaintiff's action in issuing all four assessment notices using the address in Kuala Lumpur as the Defendant's last known address is consistent with the explanation in Part 301- S/N 7PzdWphtckeiKmIuPjevzA Procedure and Administrative Title 26- Internal Revenue, which the Defendant quoted as below: “301.6212-2 Definition of last known address

General rule, Except as provided in paragraph (b)(2) of this section, a taxpayer’s last known address is the address that appears on the taxpayer’s most recently filed and properly processed Federal tax return, unless the Internal Revenue Service (IRS) is given clear and concise notification of a different address….”

pursuant to subparagraph 145(2)(a)(ii) Act 53, the four notices which were sent via ordinary mail are deemed to be served on the Defendant;

The Defendant's own action in filing Form Q to appeal for the Assessment Notice for the years 2019 and 2020 had navigated the Defendant claimed that they didn’t receive the notices. From the court's perspective, the Defendant is being selective in addressing the income tax claim through the four notices.

The issuance of the writ of summons in the action against the Defendant using the Johor address is a separate matter governed by the ROC 2012. It does not displace the statutory regime for the service of tax notices under Act 53. Hence, the Plaintiff's explanation that the Johor address was a result of the SSM search for the purpose of issuing the S/N 7PzdWphtckeiKmIuPjevzA action is accepted. This is evidence from the SSM search on pages 10-14 of the Appeal Record Part B (Vol. I), which stated the information was generated from MYDATA SSM Services as of 12 October 2022.

Hence, this Court finds that the Sessions Court Judge is correct in her observation in paragraphs (14) to (19) and her finding that “Oleh itu, Notis-Notis Taksiran tersebut telah disifatkan sebagai telah disampaikan kepada Defendan dengan sempurna menurut Seksyen 145(2) ACP 1967”.

Based on the above, this Court is satisfied that there is no error warranting appellate intervention in the Sessions Court Judge’s granting summary judgment to the Plaintiff under Order 14 ROC

Therefore, Defendant's appeal is dismissed with costs RM8,000.00 subject to allocator. Dated : 10 September 2025 Dr Noradura binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru S/N 7PzdWphtckeiKmIuPjevzA Peguamcara : Secret Ingredient Sdn. Bhd. Yahya Chua & Gavin Low Tetuan Lau Kok Guan, Liana & Kuan No. 119 Jalan Sutera Satu Taman Sentosa 80150 Johor Bahru Johor Peguamcara : Kerajaan Malaysia Ainur Mardhiah & Komathi Lembaga Hasil Dalam Negeri Cawangan Guaman Lembah Klang Tingkat G 1 - 4 Blok 10 Kompleks Bangunan Kerajaan Jalan Tuanku Abdul Halim 50600 Kuala Lumpur