Wegrow Global Sdn Bhd v Ketua Pengarah Jabatan Kastam Diraja Malaysia (WA-25-302-08/2025)

1.

PENGARAH KASTAM NEGERI WILAYAH PERSEKUTUAN KUALA LUMPUR ... RESPONDENTS

On 27.8.2025, this Court had allowed the Applicant’s application for leave for judicial review in subparagraphs 1(a), (b) and (d) of encl. 1 and directed that the application for stay in subparagraph 1(c) as follows to be heard on an inter parte basis: “An order under Order 53 Rule 3(5) Rules of Court 2012 that all actions and further proceedings in relation to the enforcement of the Bills of Demand dated 31 December 2024 and 11 April 2025 including all action under sections 17 and 17A of Act 235 as well as sections 31and 38 Act 806 to be suspended pending the final disposal of the judicial review application by this Court.”.

Subparagraphs 1(a), (b) and (d) in encl. 1 read as follows: “(a) An order of mandamus to move this Honourable Court to direct the first respondent to carry out its statutory duties in accordance to section 143 Customs Act 1967 (Act 235) and section 96 Sales Tax Act 2018 (Act 806) to review its decision, in respect of the review applications made vide bearing references KE.HD(123)744/32-3531 dated 22 January 2025 and KE.HD(123)744/32-3698, KE.HD(123)744/32-3699, KE.HD(123)744/32-3700, KE.HD(123)744/32-3701, KE.HD(123)744/32-3702, KE.HD(123)744 132-3703 and KE.HD(123)744/32- 3704 all dated 8 May 2025 respectively;

(b) A declaratory order that the applicant is not liable to pay the import duties and sales tax as claimed vide the Bills of Demand bearing reference number W10- KA-00036-2412 dated 31 December 2024, B1-KA- 00027-2504, B10-KA-00028-2504, B10-KA-00029- 2504, B10-KA-00030 2504, B10-KA-00031-2504, B10-KA-00032-2504, B10-KA-00033-2504 all dated 11 April 2025 which are null and void, and/or ultra vires and/or wrongful and/or unlawful; …

(d) Costs of this application to be costs in cause.”.

During the leave stage, the Applicant had filed a Certificate of Urgency (‘CoU’) dated 22.8.2025 (encl. 6) for the application for leave to be heard urgently as the Applicant’s directors have received an invitation to attend the “Belt and Road Initiative to promote educational exchanges” (‘Initiative’) in China beginning from 29.8.2025 on the invitation from Chongqing Liangjiang New Area Investment Invitation & Promotion Bureau to discuss a joint venture project for the purpose of enhancing the applicant’s business performance.

On 9.9.2025, another CoU was filed by the Applicant (encl. 17) for an early date to be fixed to hear the application for stay because the Applicant’s directors were invited for the second time to attend a discussion and a meeting regarding its business matters, especially to attend the Initiative which commenced on 19.9.2025.

A case management was held on 11.9.2025 where directions were given for the filing of affidavits and written submissions. After having considered the same, on 23.10.2025, I had dismissed the Applicant’s application for stay in subparagraph 1(c) of encl. 1.

Dissatisfied, the Applicant has filed a Notice of Appeal on 17.11.2025. These are my full grounds of judgment for purposes of the appeal. Brief Background Facts

The brief facts of the case as gleaned from the Applicant’s Written Submission (encl. 22) are as follows.

The Applicant is a private company incorporated since 27.12.2016 under the Companies Act 1965 with a registered address at No. 46-3, Jalan PJU 8/5B, Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor and a business address at 1-3-2, Block I, Setiawalk Persiaran Wawasan, Pusat Bandar Puchong, 47100 Puchong, Selangor.

The Applicant is in the business of providing edutainment, activities of live events, exhibitions and other related activities, provision of stimulated and interactive experiences or education and entertainment purposes (‘Business Activities’).

The Applicant had signed an agreement with the Hang Tuah Jaya Municipal Council, Kuantan City Council, Pahang and the National Science Centre (‘Said Parties’) to provide its themed business activity “Dinosaur Encounter” at Melaka Zoo, Taman Teruntum Mini Zoo, Kuantan and the National Science Centre which involved the importation of Animatronic Dinosaurs, 6 seats VR Dark Mars/ VR Cinema, Life Size Statue 1 and Lantern Flower Power Cord Accessory (‘Said Goods’).

The Said Parties have requested the 1st Respondent (‘R1’) for an exemption from duties and sales tax for the importation of the Said Goods as they will be used for exhibition and educational purposes.

Based on the letters from the Said Parties, the Applicant had imported the Said Goods by using the services of Indah Permai Sdn Bhd, who had been appointed under s 90 of the Customs Act 1967 [Act 235] by R1 to act as a customs agent to transact all customs business on behalf of the Applicant, including the customs declaration required under s 79 of Act 235.

An audit was conducted by the audit officers from the 2nd Respondent (‘R2’) regarding the importation of the Said Goods for the period from 1.1.2020 until 31.12.2023. As a result of the audit, one Bill of Demand bearing reference number W10-KA- 00036-2412 dated 31.12.2024 was issued.

Subsequently seven Bills of Demand all dated 11.4.2025 with bearing reference numbers B10-KA-00027-2504, B10-KA- 00028-2504, B10-KA-00029-2504, B10-KA-00030-2504, B10- KA- 00031-2504, B10-KA-00032-2504 and B10-KA-00033-2504 were issued by R2 demanding that the Applicant pay the short paid import duties under Act 235 and sales taxes under the Sales Tax Act 2018 [Act 806].

The Applicant was informed by the audit officer that the short payment of import duties and sales tax arose because the goods were wrongly classified and approved under Customs Tariff code 9023.00.0000, 9504.90.9900, 3926.40.0000 and 9405.49.9000 by the proper officer of customs pursuant to sub-s 13(1) of Act 235 and further, the Applicant was not entitled to claim for exemption of import duties and sales taxes as approved by the proper officer of customs at the time of importation of the Said Goods.

On 11.3.2024, the Applicant’s solicitors informed R2 that the Applicant disagreed with the audit findings submitted by R2.

The Applicant was not satisfied with the demand for short payment of the sales tax and import duties and had applied to R1 for a review in accordance with s 143 of Act 235 and s 96 of Act 806 which was duly registered with reference numbers KE.HD

On 10.7.2025, the Applicant received a letter from R1 making a request to the Director General (‘DG’) of the Immigration Department to impose a travel ban on the Applicant’s directors under s 17A of Act 235 and s 31 of Act 806 for short payment of import duties in the sum of RM2,190,178.56 and sales tax of RM223,777.30. The Applicant alleged that these amounts contradict the amounts of tax as claimed in the Bills of Demand dated 31.12.2024 and 11.4.2025.

On 15.7.2025, the Applicant’s directors received an invitation to attend the discussion in China as mentioned earlier. However, in view of the travel restrictions, the directors had to cancel the attendance at the discussion. The organisers informed that there would be another discussion in November 2025 and have requested the Applicant’s directors to attend.

Vide the letter dated 18.7.2025, R1 had responded to the Applicant's request that the application for cancellation of the travel ban cannot be considered.

The Applicant’s solicitors wrote again to R1 on 24.7.2025 but R1 replied on the next day that the Applicant’s request could not be considered without offering any reasons.

Subsequently, the organisers provided another invitation letter to the Applicant’s directors to attend a discussion and site visit from 19.9.2025 until 29.9.2025.

In the letter dated 11.9.2025 to R1, the Applicant proposed to provide a bank guarantee of RM50,000.00 to temporarily uplift the travel ban imposed on the directors. There was no response from R1.

The Applicant’s bank account was also frozen by the Malaysian Anti-Corruption Commission (‘MACC’) for the purposes of investigation and this prohibited the Applicant from utilising its account to pay the short payment of taxes. The Legal Principles

O. 53, r. 3(5) of the Rules of Court 2012 provides that: “The grant of leave under this rule shall not, unless the Judge so directs, operate as a stay of the proceedings in question.”.

It is settled law that the granting of leave for an application for judicial review does not in itself serve as an automatic stay of the order or decision the judicial review proceedings are seeking to quash, impugn or set aside. The principle which needs to be taken into consideration before the granting of a stay in judicial review proceedings is similar to the granting of an application for interlocutory injunction (see Bursa Malaysia Securities Bhd v Gan Boon Aun [2009] 4 MLJ 695, Godfrey Philips (Malaysia) Sdn Bhd v Timbalan Ketua Pengarah Kesihatan (Kesihatan Awam), Kementerian Kesihatan, Malaysia [2011] 9 CLJ 670 and Tan Bun Teet & Ors v Menteri Sains, Teknologi dan Inovasi Malaysia & Ors [2013] 3 MLJ 676).

The onus is on the Applicant to establish that –

(a) it is likely to succeed on the merits;

(b) it is likely to suffer irreparable harm in the absence of a stay order;

(c) the balance of equity tips in its favour; and

(d) a stay order is in the public interest (see Godfrey Philips (supra) and Dharma Sdn Bhd & Ors v Menteri Kerja Raya & Ors [2017] 1 LNS 1276).

In so far as subparagraph 27(a) above is concerned, the learned Senior Federal Counsel (‘SFC’) drew my attention to the following passage in the judgment in Professional Solutions Sdn Bhd v. Pentadbir Tanah Seremban & Anor And Another [2019] 3 CLJ 253 which reminded the courts not be too carried away with arguments in a stay application as to the merits of the case: “[56] In short, this court should not be too carried away with the arguments as indicated above. Not only because it is more appropriate to raise it at the hearing of the judicial review applications but this would also mean if this court is to decide on these contentions now, it would render the hearing of the judicial review later useless as the points that should be raised there have been raised and decided by this court now. Take for example the last argument above where it is contended that a notice informing the applicant for the continuation of the enquiry should have been issued. If this court decides that issue in favour of the applicant now, that would mean the merits of the judicial review has already been decided by this court well before the hearing of the judicial review applications itself. [57] On this note too, it should be reminded that in an application for a stay pending the determination of a court's case, the merits of that case is not an issue. It does not matter whether the case would be likely concluded in favour of the applicant for stay. This has long been concluded in a case I handled as counsel at the Federal Court although at the losing end ie, Kosma Palm Oil Mill Sdn Bhd& Ors v. Koperasi Serbausaha Makmur Bhd [2003] 4 CLJ 1; [2004] 1 MLJ 257 where it is held as follows: There are many factors that may constitute special circumstances and the fact that an appeal would be rendered nugatory if the stay was referred is the most common one. The merits of a party’s case in a stay application is not a relevant matter for consideration.”.

On the part of the Applicant, the decision in Chang Shu Hua v. Goon Fook Hong [2008] 3 CLJ 429 was cited to support the submission that the category of what constitutes special circumstances is not closed and should be interpreted flexibly. Furthermore, a stay means that the status quo will be preserved and this will aid the judicial review process by making it more effective as, if the Applicant is ultimately successful, it will not be denied the full benefit of its success (see Regina (H) v Ashworth Special Hospital Authority; Regina (Ashworth Special Hospital Authority) v West Midlands and North West Region Mental Health Review Board [2003] 1 WLR 127). Analysis and Decision of the Court

The SFC objected to the Applicant’s Affidavit In Reply II (‘AIR’) in encl. 30 on the ground that it was filed without leave and after written submissions had been filed. However, the Applicant’s counsel pointed out that they had done so only as a response to the Respondents’ AIR (2) in encl. 21. As it turned out, even encl. 21 was filed without leave of the court. Therefore, I did not consider both AIRs. - Whether the application is an abuse of court process

The travel ban restriction was imposed under s 17A of Act 235 which empowers the DG of Customs to prevent any person from leaving Malaysia if there is any outstanding amount of customs duty or sales tax payable. The said provision reads as follows: “Recovery of customs duty, etc. from persons leaving Malaysia

(1) Where the Director General has reason to believe that any person is about or is likely to leave Malaysia without paying any customs duty, surcharge, penalty, fee or other money payable under this Act, he may issue to the Director General of Immigration a certificate containing particulars of the person reasonably suspected of having committed an offence with a request that such person be prevented from leaving Malaysia unless and until he pays all the duties, surcharges, penalties, fees or other moneys so payable or furnishes security to the satisfaction of the Director General for its payment. …”.

The Respondents contended that the application for a stay order was an abuse of court process for the reason that any application for a stay of the travel ban decision should be made against the DG of the Immigration Department of Malaysia who is the authority responsible for imposing the travel ban. The DG has a direct interest and will be directly affected should the Court grant any stay of the travel ban.

I was not persuaded by the Respondents’ submission on this matter as the imposition of the travel ban by the DG of the Immigration Department was subsequent to the issuance of the certificate and the request by the DG of Customs to prevent the Applicant’s directors from leaving the country unless and until all the outstanding amount of customs duty and sales tax is paid or security is furnished to the satisfaction of the DG of Customs. The DG of the Immigration Department merely acted on the request by the DG of Customs.

I accepted the Applicant’s submission that the crux of the application for a travel ban against the Applicant was premised on the non-payment of customs taxes which lies within the purview of the Customs Department and not the Immigration Department. I was not prepared to find and hold that the Applicant’s application to stay the travel ban constitutes an abuse of the court process. - Whether the Applicant has established the requirements for a stay of the travel ban

(a) Irreparable harm

In paragraph 27 of the Affidavit In Support (‘AIS’; encl. 3), Yong Lam Woei, the Applicant’s director affirmed that he was invited for a discussion on the Initiative by way of a letter from the Investment Invitation & Promotion Bureau, Liangjiang New Area, Chongqing dated 15.7.2025 (exhibit “YLW-15”; in paragraph 13 of the Applicant’s Supplemental Affidavit (encl. 14) it was averred that the discussion was to take place in July and August). However, in view of the travel ban, he had cancelled his trip to China and the organiser has since indicated that another discussion will be held in November 2025.

In paragraph 41 of the AIS, the deponent averred that the travel ban “… akan menjejaskan perniagaan pemohon.” while in paragraph 16, encl. 14, he affirmed that his business will be severely affected “… kerana pemohon akan kehilangan satu peluang yang baik untuk memajukan perniagaan pemohon.”. Overseas trips were said to be a necessity for the Applicant’s directors to “… meningkatkan prestasi perniagaan pemohon dimana jika tidak akan menjejaskan kehidupan pengarah-pengarah pemohon sebagai rakyat Malaysia kerana telah kehilangan sumber pendapatan bagi pemohon.” (see paragraph 22, encl. 20).

The second invitation letter by the organiser, which is undated, was produced in exhibit “YLW-2”, encl. 14 and it reads, among others, as follows: “Following our earlier invitation which you were unable to attend, we are pleased to extend this renewed invitation for your official visit to Chongqing Liangjiang New Area. Wegrow Global Sdn Bhd, as an integrated education and cultural tourism development company in Malaysia, has been actively engaged with us in the planning of technology-driven family parks, immersive theme galleries, and cultural-creative educational projects. In line with the "Belt and Road" Initiative, and recognising the significance of this collaborative project which involves multiple stakeholders, the Chongqing Liangjiang New Area Investment Invitation & Promotion Bureau warmly invites you, Mr. Teh Eu Jin and Mr. Yong Lam Woei, to travel to Chongqing Liangjiang New Area starting from 19 September 2025. Your visit will include: A series of business meetings with relevant authorities and landowners, Site visits and inspections of the proposed project locations, Policy and incentive discussions with government representatives, and Preparations for the signing of agreements with different parties. As this project forms part of the Belt and Road cooperation, these discussions are essential to ensure that all parties are aligned. We anticipate that these arrangements will lead to the formal signing of the final project contract by 5 November 2025. …”.

The deponent additionally raised his right of livelihood under Article 5(1) of the Federal Constitution to continue his business without hindrance or disruption, including to avoid any detention of the Said Goods and the need to travel overseas to enhance the business (see paragraph 20, encl. 14 and the written submission where the Applicant relied on the case of Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1996] 1

The Applicant contended that the discussion cannot be conducted online and that the failure by the Applicant’s directors to attend the discussion in China “akan mengakibatkan kemudaratan dalam perniagaan pemohon.” (see paragraph 17 of the AIR, encl. 20). It was submitted that the discussion cannot be conducted via the various online platforms which are available and in line with current business practices because the programme includes site visits.

It was further submitted by the Applicant that –

(a) the travel ban was imposed as a result of the issuance of Bills of Demands which are vitiated by irregularities when the customs tariff code found by the audit officer varies and contradicts with the customs tariff code determined by the assessment officer;

(b) attending the discussions and meetings in China is not a matter of convenience as alleged by the Respondents, but rather a necessity, and failing which, the Applicant and its directors cannot be compensated by the Respondents;

(c) the order for a stay would not affect the public interest in the collection of taxes as the Respondents could exercise their statutory powers to commence a civil suit under s 22B of Act 235; and

(d) the purpose of stay in a judicial review is to preserve the status quo and as a temporary relief until the final disposal of the judicial review application. It is to be distinguished from a stay of execution of a judgment. In revenue cases, the courts have granted a stay by exercising the inherent powers until the determination by the Special Commissioners (see Chong Woo Yit v Government of Malaysia [1989] 1 MLJ 473). The “pay first, dispute later” policy under any tax laws does not oust the judge’s power when the taxpayer has commenced judicial review proceedings to challenge the assessment (see Mohd Najib bin Hj Abd Razak & Anor v Government of Malaysia and another appeal [2023] 6 MLJ 483).

In my considered view, the issue on whether there are irregularities in the customs tariff code is a matter to be decided in the substantive application for judicial review. The Applicant’s statements that its business will be affected and it will suffer irreparable harm if the stay of the travel ban was not allowed are bare averments and not supported by any evidence. The Applicant’s directors remain able to manage the company and conduct all ordinary business within Malaysia. The allegation of being deprived to the right of livelihood simply does not arise. The travel ban restriction was imposed under an express statutory provision and is provisional upon the Applicant’s compliance with its legal obligation to pay the customs duties and sales tax owed.

As the hearing took place on 23.10.2025, the relevant invitation was the second invitation received by the Applicant as per exhibit “YLW-2”. However, in my opinion, non-attendance of the Applicant’s directors for the official visit to Chongqing Liangjiang New Area starting from 19.9.2025 due to the travel ban does not rise to the threshold of irreparable harm. The signing of the final project contract by 5.11.2025 was merely the organiser’s expectation. Apart from the invitation letter, there is no evidence on the details of the collaborative project and the efforts made by all the concerned parties to date towards the targeted signing of the contract by 5.11.2025.

Instead, if the stay order is granted, it will cause irreparable harm to the public interest as the Respondents, who have been entrusted with the public function of collecting import tax and sales tax, will be prevented from carrying out their responsibilities as a public body under the law (see paragraph 11, encl. 19). Furthermore, there are ongoing investigations by the MACC into the Applicant’s business and activities.

In sum, the Applicant has not established, on a balance or probabilities, the element of irreparable harm to justify an order to stay the imposition of the travel ban.

(b) Balance of equity

According to the Applicant, the balance of equity or convenience and the balance of justice was in its favour, especially when its bank account has been frozen by the MACC for investigation purposes, resulting in it being unable to make any payment towards the claim for import duties and sales tax. The Applicant relied on the following excerpt in Ooi Chieng Sim v Ketua Pengarah Hasil Dalam Negeri [2022] MLJU 514 (HC) to support its submission: “[26] All the applicant’s accounts including accounts in companies the applicant owns have been frozen effectively giving the Applicant no access to his funds. [27] The Applicant therefore would not be able to satisfy in whole or in part the debt raised against the Applicant. ... [29] It is to be noted that the order to freeze his accounts by the Government of Malaysia through the police is made in the course of the criminal investigation and considering that the charges against the Applicant are also being challenged by the Applicant, it is unreasonable for the Respondent, another Government agent through his agency to demand payment when the Applicant’s source of funds are frozen.”.

The Applicant’s counsel informed this Court that, in Ooi Chieng Sim, leave was dismissed by the High Court on 21.1.2022 and an interim stay was granted; the appeal to the Court of Appeal against the dismissal of the leave was dismissed on 21.3.2022; and subsequently, the motion for leave to appeal to the Federal Court was dismissed.

In response, the SFC said that there was no appeal in respect of the interim stay because it involved the Office of the Special Commissioners of Income Tax.

I agreed with the SFC that in Ooi Chieng Sim, the individual taxpayer’s account was frozen whereas the instant case involves a travel ban on the Applicant’s directors and therefore, the current application must be decided based on its own facts.

It was additionally argued by the Applicant that, even though the Respondents have the power to implement the statutory obligations in accordance with the provisions of the law, such powers should be exercised reasonably and rationally. The main basis for the travel ban was the Applicant’s purported failure to settle the payment of the demands issued against it; however, this is tainted with illegality as there is no final determination of the customs tariff code by the DG.

In my considered view, the balance of equity tips in favour of the refusal of the stay of the travel ban for the reasons as put forth by the Respondents, namely –

(a) the purpose of s 17A of Act 235 is to ensure that any individual or company who is responsible for the unpaid duties does not avoid payment by leaving the country. This provision serves a public interest function of safeguarding the collection of the Government’s revenue;

(b) the Respondents, being a public authority tasked with the collection of customs duties and taxes, are discharging their statutory obligations under the law. To allow the Applicant’s directors to leave Malaysia while substantial duties remain unpaid would undermine the enforcement powers of the Customs Department and create an undesirable precedent for other taxpayers; and

(c) the loss to the Respondents and public interest in the form of potential revenue outflow cannot be remedied.

(c) Public interest

The SFC submitted that, based on Godfrey Philips’s case, public interest is the paramount consideration in determining whether a stay of a public authority’s decision should be granted, specifically –

(a) the court must particularly consider the public consequence of granting a stay;

(b) public harm is considered irreparable and cannot be adequately remedied by damages, thus favouring a refusal of stay;

(c) public interest outweighs economic concerns, even if the Applicant is likely to succeed on the merits;

(d) where the public authority seeks to enforce the law, public interest in upholding the law must outweigh challenges posed by the Applicant;

(e) the court should balance public interest in the enforcement of laws with the potential harm to the Applicant, ensuring the right decision is made;

(f) when the defendant is public authority performing duties to the public, the court must look at the balance of convenience more widely and take into account the interest of the public; and

(g) it is by no means that a stay is appropriate even if leave has been granted. The balance of convenience dictates that the applicant who challenges the decision of public body must obey the impugned decision pending the court’s decision.

I was persuaded by the SFC’s submission that public interest is a paramount consideration in this case and must outweigh the Applicant’s interest. A new precedent would be set for travel ban cases if this Court was to allow the Applicant’s directors to leave the country when there are purportedly outstanding amounts of import duties and sales tax.

(d) Special circumstances

The Applicant referred to the definition of “special circumstances” as elucidated in the case of Leong Poh Shee v Ng Kat Chong [1966] 1 MLJ 86 in arguing that, there are myriad circumstances that could constitute special or extraordinary circumstances with each case depending on its own facts. The Applicant’s interests as outlined earlier could be part of the myriad circumstances that constitute special circumstances when considering a stay of the decision of an administrative body [see Godfrey Philips (supra)].

Without having to repeat the reasonings as discussed previously, suffice to say that I did not find any special circumstances to merit a stay as desired by the Applicant. Conclusion

Based on the foregoing considerations, the Applicant’s application for stay of the travel ban, and specifically in the terms as per subparagraph 1(c) of encl. 1, was dismissed. DATED: 26 NOVEMBER 2025 (ALIZA SULAIMAN) JUDGE HIGH COURT IN MALAYA KUALA LUMPUR (BKK1) Solicitors for the Applicant: Datuk Ravendren a/l J C Ramalu (Sree Kanapathi a/l Nyanasegaran with him) Messrs. J.R. Ravendren & Associates Solicitors for the Respondent: Nur Irmawatie binti Daud Senior Federal Counsel Attorney General’s Chambers