The Notice of Assessment (NOA) dated 26.7.2024 and 10.9.2024 issued under Section 21(4) of the Real Property Gains Tax Act 1976 (RPGT Act), in the sum of RM1,676,950,317.24 as Real Property Gains Tax (RPGT) penalty. S/N cca4gCj9f0arixJJoW3quw Page 3 of 18 BRIEF FACTS [2] The Applicant is a company incorporated in Luxembourg and is a tax resident in Luxembourg. It serves as an investment holding company for various entities engaged in the development, manufacture and distribution of medical devices, nutritional products and pharmaceuticals. [3] At all material times, the Applicant wholly owned the shares in St. Jude Medical Operations (Malaysia) Sdn. Bhd. (Company), a Malaysian company engaged in the manufacturing and selling of medical devices. [4] On 26.7.2024, the Respondent issued a NOA under the RPGT Act arising from the Applicant’s disposal of shares in a Malaysian company deemed to be a real property company. The Respondent assessed the RPGT at RM1,524,500,288.40. Pursuant to Section 21(4) of the RPGT Act, a ten per cent (10%) increase was subsequently imposed for non-payment within the prescribed period, bringing the total amount assessed, inclusive of penalties, to RM1,676,950,317.24 (Respondent’s Decision). [5] Later, the Applicant filed Form Q on 23.8.2024, to appeal against the Respondent’s Decision to the Special Commissioners of Income Tax within the statutory time frame. In addition to the statutory appeal, the Applicant commenced a judicial review application challenging the Respondent’s Decision. [6] On 7.10.2025, Justice Choong dismissed the Applicant’s judicial review application and ordered costs of RM15,000 to be paid to the Respondent. During the delivery of the decision, the Applicant sought an interim stay of enforcement pending the filing of a formal stay application, S/N cca4gCj9f0arixJJoW3quw Page 4 of 18 and an interim stay was granted pending the hearing of the present application. PARTIES’ CONTENTION Applicant’s Contention [7] The Applicant contended that the Court has discretion to allow a stay of enforcement pending the disposal of an appeal before the Court of Appeal. It is further submitted that special circumstances exist which justify the continuation of the interim stay already granted. Reference was made to the landmark case of Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2003] 1 MLRA 536; [2004] 1 MLJ 257; [2003] 4 CLJ 1; [2003] 5 AMR 758, which established that this test is flexible and fact-dependent- “An appreciation of the meaning of the phrase ‘special circumstances’ may resolve the confusion. As Ian Chin JC (as he then was) said in Government of Malaysia v Datuk Haji Kadir Mohamad Mastan and another application [1993] 3 MLJ 514 at p 521: An attempt was made to define special circumstances by Raja Azlan Shah (as His Majesty then was) in the case of Leong Poh Swee v Ng Kat Chong [1966] 1 MLJ 86, viz ‘Special circumstances, as the phrase implies, must be special under the circumstances as distinguished from ordinary circumstances. It must be something exceptional in character, something that exceeds or excels in some way that which is usual or common.’ The definition only serves to emphasize the fact that there are myriad circumstances that could constitute special circumstances, with each case depending on its own facts. I am of the opinion that the list of factors constituting special circumstances is infinite and could grow with time. Any attempt to limit the list or close a category would be to impose a fetter on the exercise of the discretion of the court whether to grant or stay an execution; making the discretion less of a discretion. This is surely not what discretion is all about.” S/N cca4gCj9f0arixJJoW3quw Page 5 of 18 [8] The Applicant further contended that the assessment of RPGT and the penalty amounting to approximately RM1.6 billion is extraordinarily huge and unprecedented in magnitude. It is also contended that immediate enforcement of such a substantial sum would cause irreparable harm to the Applicant, financially, operationally and reputationally, being a Luxembourg-incorporated investment holding company whose principal activities consist of holding shares in affiliated companies and managing intellectual property. It does not engage in trading operations that generate substantial cash flow. Its assets primarily comprise long-term investments in shares and intellectual property, which are not liquid and cannot readily be converted into cash. [9] The Applicant then contended that its audited financial statements demonstrate that its available cash balances are minimal when compared to the quantum of the assessment. Although its accounts reflect substantial profits in certain years, those profits arose largely from non-recurring, one-off transactions, which were not accompanied by corresponding cash inflows. In particular, the disposal of the Malaysian subsidiary's shares was satisfied by a promissory note rather than cash. Thus, it is further submitted that compelling payment would necessitate either the forced liquidation of its investments or borrowing at distress-level interest rates, both of which would result in severe financial strain and long-term commercial consequences. [10] In addition, the Applicant contended that the sheer magnitude of a tax assessment also constitutes special circumstances. Reference was made to the case of Kerajaan Malaysia v Berjaya Times Square Sdn Bhd [2018] MLRHU 2005; [2018] MLJU 616; [2018] 1 LNS 720, where S/N cca4gCj9f0arixJJoW3quw Page 6 of 18 the assessments of RM 180 million were held to be so large that payment of the same would cause irreparable damage to the taxpayer and justified a stay: “[27] Amaun cukai yang dipertikaikan adalah sangat besar, iaitu RM180,732,770.02. Defendan mengakui bahawa adalah sukar untuk membayar amaun yang sebegitu besar dalam suasana ekonomi masa kini. … Saya bersetuju dengan hujahan peguam cara defendan yang bijaksana bahawa jika penggantungan tidak diberikan, dalam sebarang kemungkinan satu penghakiman akan direkodkan terhadap defendan. Apa yang dijangkakan akan menyusul jika defendan gagal membayar amaun yang dituntut oleh plaintif, adalah suatu ancaman penggulungan. Ancaman penggulungan akan meninggalkan kesan yang sangat berat dan serius… [28] Akibat langsung yang didepos dalam afidavit defendan adalah kesan yang mesti diterima sebagai suatu hakikat. Saya tidak bersetuju dengan peguam cara plaintif yang bijksana bahawa kerugian kepada pembayar cukai dari aspek ekonomi adalah satu kerugian yang boleh dipampas sama ada secara pemulangan cukai yang dipungut. Ini kerana saya percaya akibat dan kerugian dari segi ekonomi dan juga reputasi yang akan berlaku disebabkan oleh prosiding sivil ini, tidak mungkin dapat memulihkan bukan sahaja reputasi defendan sebagai syarikat pemaju dalam sektor pembangunan hartanah tetapi juga reputasi syarikat induk defendan yang merupakan syarikat tersenarai awam dan syarikat-syarikat di bawah kumpulan itu. [29] Saya percaya kepentingan kedua-dua pembayar cukai dan Kerajaan perlu diimbangi, khususnya dalam kes ini apabila rayuan defendan ada meritnya…” [11] The Applicant submitted that the appeal would be rendered nugatory if enforcement were to proceed. This is because, if the appeal succeeds, the recovery of any overpaid tax would be significantly delayed due to systemic backlogs in the tax refund process. Public statements and reports referred to by the Applicant indicate substantial delays in processing tax refunds, particularly in large-value cases. The Applicant contended that it would be deprived of the use of substantial funds for an indeterminate period and would not be compensated by way of interest, S/N cca4gCj9f0arixJJoW3quw Page 7 of 18 as the Respondent maintains a policy of refusing to pay interest on refunds. Furthermore, the financial deprivation arising from interest losses would constitute permanent and irrecoverable economic harm. [12] Further, the Applicant contended that the balance of convenience favours the granting of a stay. It is argued that the Respondent would suffer no prejudice by deferring enforcement, as the tax remains recoverable should the appeal fail, and the statutory penalty already operates to protect the Government’s position. In contrast, refusal of a stay would impose disproportionate hardship upon the Applicant and undermine the integrity of the appellate process. [13] The Applicant further submitted that the appeal raises serious and arguable questions of law of first impression. In particular, it concerns the proper interpretation of Article 14 of the Malaysia–Luxembourg Double Taxation Agreement (DTA), including whether Malaysia possesses taxing rights over gains derived by a Luxembourg tax resident from the disposal of shares. [14] The Applicant, in their reply, also disputed the Respondent’s assertion that Sections 21, 21C and 23 of the RPGT Act operate to preclude the grant of a stay. It is submitted that these provisions do not oust the Court’s inherent jurisdiction to grant a stay in appropriate circumstances. The Applicant contended that judicial intervention in the form of a stay is a recognised safeguard within the “pay first, argue later” framework and is essential to preserve the statutory scheme's constitutionality and fairness. S/N cca4gCj9f0arixJJoW3quw Page 8 of 18 [15] The Applicant also rejected the Respondent’s submission that a stay operates as a prohibitory injunction. The Applicant submitted that a stay merely suspends the legal effect of the impugned decision pending appeal and does not restrain the Government from exercising its lawful powers. [16] Finally, the Applicant submitted that public interest in tax collection and the need to protect taxpayers against arbitrariness/incorrect assessment must be balanced. The Applicant contended that a temporary stay would not impede the Government’s fiscal operations, disrupt its routine tax collection functions, or otherwise cause prejudice to the public at large. Respondent’s Contention [17] The Respondent objected to the application for stay and submitted that it is fundamentally inconsistent with the statutory tax recovery framework established under the RPGT Act. The Respondent contended that Sections 21, 21C and 23 of the RPGT Act clearly embody the legislative intention that tax assessed must be paid first, regardless of any appeal or dispute. [18] The Respondent further submitted that upon service of the NOA, the tax became due and payable as a debt to the Government, and failure to pay within the prescribed period automatically attracts a statutory increase of 10%. It is argued that the institution of judicial review proceedings does not relieve the Applicant from liability to pay the assessed tax and that granting a stay would directly contravene the express provisions of the Act. S/N cca4gCj9f0arixJJoW3quw Page 9 of 18 [19] The Respondent also contended that it is a matter of public interest that taxes due need to be paid by each taxpayer, or else the Government will not be able to sustain the operation for the development of the nation. Further, it is argued that granting a stay would prejudice the public at large and be unfair to compliant taxpayers who discharge their tax obligations in accordance with the law. [20] The Respondent cited the new Section 21C RPGT Act, which provides as follows- “21C. The institution of any proceedings under any other written law against the Government or the Director General shall not relieve any person from liability for the payment of any tax, debt or other sum for which he is or may be liable to pay under this Part.” [21] It is the Respondent’s argument that the institution of these judicial review proceedings against the Revenue by the Applicant does not relieve the Applicant from the obligation or liability to pay the tax under the NOA, and any application for a stay would be in contravention of the express words of Section 21C. [22] The Respondent further submitted that Order 53 Rule 3(5) of the Rules of Court 2012, being procedural in nature, cannot override substantive provisions of the RPGT Act. It is argued that to grant a stay in these circumstances would effectively negate the statutory recovery mechanism enacted by Parliament. [23] Reference was also made to the case of Bursa Malaysia Securities Bhd V Gan Boon Aun [2009] MLJU 314; [2009] 4 MLJ 695; S/N cca4gCj9f0arixJJoW3quw Page 10 of 18 [2009] 5 CLJ 698; [2009] 2 AMR 852, where the Court of Appeal observed that the granting of an order of stay under Order 53 Rule 3(5) is ancillary to the granting of leave and that the consideration is similar to an application for interlocutory injunction- “[61] The granting of an order of stay in this appeal was granted as an order ancillary to the granting of leave. Hence similar to the consideration of the granting of an application for an interlocutory injunction, the applicant has to satisfy the requirements of establishing an arguable case or a prima facie case...” [24] Regarding the issue of special circumstances, the Respondent submitted that the Applicant has failed to discharge the burden of proof. Accordingly, large tax liabilities are not uncommon in civil recovery proceedings to collect taxes, and the 10% increase due to unpaid taxes is normal and thus does not render the case exceptional. [25] The Respondent also submitted that the merits of the appeal are irrelevant to the stay application. The Respondent further submitted that the correctness of the assessment is a matter for the appellate process and does not justify deferment of enforcement. [26] Further, the Respondent contended that it was found that the Applicant’s Net Income for 2023 is USD 4.37B, which is more than sufficient to pay the tax of RM1.6B. The Applicant, on the other hand, fails to produce any accounts showing their inability to pay the debt. [27] Finally, the Respondent submitted that granting a stay in this case would set an undesirable precedent and open the floodgates to similar applications, thereby jeopardising the integrity of the tax recovery system. S/N cca4gCj9f0arixJJoW3quw Page 11 of 18 ANALYSIS AND FINDINGS [28] The Federal Court in the landmark case of Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2003] 1 MLRA 536; [2004] 1 MLJ 257; [2003] 4 CLJ 1; [2003] 5 AMR 758 , held that a stay can be granted if the applicant succeeds in establishing the existence of “special circumstances”. [29] Moreover, in Lim Jen Lin @ Lim Jen Ling v Petronas Refinery And Petrochemical Corporation Sdn Bhd & Anor [2026] 2 MLRA 703; [2026] MLJU 76; [2026] CLJU 34; [2026] 2 AMR 233, the Court of Appeal upon granting a stay of execution pending appeal had cited the cases of Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd [2002] 1 MLRA 214; [2002] 3 MLJ 49; [2002] 3 CLJ 380; [2002] 3 AMR 2867 and Renew Capital Sdn Bhd & Ors v. ADM Ventures (M) Sdn Bhd & Anor And Another Appeal [2022] 5 MLRA 303; [2022] 6 MLJ 58; [2022] 8 CLJ 817; [2022] 5 AMR 353 and held- [15] The phrase 'special circumstances' was explained by this Court in Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 1 MLRA 214; [2002] 3 MLJ 49; [2002] 3 CLJ 380; [2002] 3 AMR 2867: "... The weight of authorities appears to me to say that the special circumstances must be special, not ordinary, common or usual circumstances and that go to the execution of the judgment and not to the validity or correctness of the judgment (or merits of the appeal). Many judges considered the question whether the appeal, if successful, is rendered nugatory under the head of special circumstances. (Sometimes, the phrase used is whether the appellant, if successful, can be restored to its former position). The general view appears to be that that is the more, if not the most, important factor of all. Of course, no one ever attempts to define special circumstances, for good reasons. It is also a common view that it depends on the facts of a particular case... Some judges do not use S/N cca4gCj9f0arixJJoW3quw Page 12 of 18 the term 'special circumstances'. They straight away considered whether the appeal, if successful, would be rendered nugatory..." [16] Added to that, the risk that an appeal would be rendered nugatory is a 'paramount consideration' in an application for a stay of execution. "I agree that in an application for a stay of execution, that the appeal, if successful, would be rendered nugatory is the 'paramount consideration' or by whatever name it is called. And, I do not think that it matters whether it is considered under the head of 'special circumstances' or not, so long as it is considered and so long as he does not go so far as to say that no other factors may be considered because this is an exercise of discretion, and therefore all the relevant factors should be considered." (See Ming Ann Holdings Sdn Bhd (supra)) [17] In Renew Capital Sdn Bhd & Ors v. ADM Ventures (M) Sdn Bhd & Anor And Another Appeal [2022] 5 MLRA 303; [2022] 6 MLJ 58; [2022] 8 CLJ 817 this Court held that the power of this Court to grant a stay of execution pending the disposal of an appeal is discretionary and must be exercised in accordance with established legal principles, rather than arbitrarily: "[17] The court has a discretion as to whether to grant or not to grant a stay of execution of a judgment pending appeal depending on whether there are special circumstances, which circumstances must be deposed to on the affidavits supporting the application and refuting the objection to the stay. It also has a discretion to impose conditional stay subject to terms of the whole or part of the judgment sum ordered to be paid. Granted the expression 'special circumstances' was used with reference to stay of the mode of execution by way of a writ of seizure and sale.... [18] Generally, an appeal does not operate as a stay of execution of the payment of the sum adjudged to be paid by a judgment of the court unless the High Court that granted the judgment or the court appealed to in the Court of Appeal so orders. Under s 43 of the Courts of Judicature Act 1964 ('the CJA') any stay application has to be made to the High Court first which had been made and dismissed by the High Court.... [19] The discretion is thus reposed with the court and like all judicial discretion, it must be exercised with reference to established principles of law and not arbitrarily. The power of the Court of Appeal generally to preserve status quo and to prevent prejudice S/N cca4gCj9f0arixJJoW3quw Page 13 of 18 to the claims of parties pending the hearing of an appeal is also found in s 44 of the CJA..." [30] The Applicant has also referred to the cases from the Court of Appeal of Low Nam Hui & Sons Sdn Bhd v Huang Yan Teo [2007] 2 MLRA 301; [2007] 7 MLJ 13; [2007] CLJU 249; [2007] 6 AMR 649 and Chang Shu Hua v Goon Fook Hong [2008] 1 MLRA 137; [2008] 3 MLJ 10; [2008] 3 CLJ 429, regarding “special circumstances”. [31] Further, in Blue Chip Properties Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2022] MLRHU 442; [2022] MLJU 467; [2022] 1 LNS 508, the High Court held that a tax liability of RM 5.4 million was “indisputably large” and sufficient to trigger special circumstances. [32] In this regard, the Applicant submitted that there are clear and compelling special circumstances in this application which justify the granting of a stay by this Court. The Applicant further submitted that the sheer magnitude of a tax assessment can, in itself, constitute a special circumstance and referred to a High Court tax case of Kerajaan Malaysia v Berjaya Times Square Sdn Bhd [2018] MLRHU 2005; [2018] MLJU 616; [2018] 1 LNS 720, which was later affirmed by the Court of Appeal. In this case, the assessments of RM 180 million were held to be so large that payment of the same would cause irreparable damage to the taxpayer and justified a stay. [33] The Applicant also cited the cases where Courts have recognised that the Respondent’s delays in tax refunds and refusal to allow interest claims are valid grounds for a stay (see Blue Chip (supra) and Profound S/N cca4gCj9f0arixJJoW3quw Page 14 of 18 Reliance Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2022] MLRHU 453; [2022] MLJU 466; [2022] AMEJ 0237). [34] Additionally, in Kind Action (M) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2001] MLRHU 410; [2021] MLJU 637 [2021] CLJU 522, the Court allowed the taxpayer’s stay against enforcement of taxes and penalties in the amount of approximately RM 81.5 million, pending the disposal of the taxpayer’s appeal to the Court of Appeal. [35] In this regard, this Court is inclined with the Applicant’s line of submission. In summary, the facts of this case clearly demonstrate that a stay is warranted for the following reasons-