The High Court has fixed Nov 16 to deliver its decision in Mukhriz Mahathir’s judicial review application challenging nearly RM5 million in additional tax assessments issued by the Inland Revenue Board (LHDN).
Justice Azizan Arshad set the date after hearing submissions from Mukhriz’s counsel, Nizamuddin Hamid, and Marina Ibrahim, who appeared on behalf of LHDN.
Mukhriz argues assessments were issued out of time
Nizamuddin submitted that the High Court, rather than the Special Commissioners of Income Tax (SCIT), was the appropriate forum because Mukhriz was challenging the legality of the additional tax assessment notices, not the amount of tax imposed.
He argued that the notices were unlawful as they were issued after the expiry of the five-year limitation period prescribed under the Income Tax Act.
According to Nizamuddin, if LHDN intended to issue assessments beyond the statutory period, it was required to state that the extension was based on fraud, wilful default or negligence.
“The additional assessments were issued without invoking any of those three grounds. That makes the notices illegal. Had the reason been stated, we would have taken the matter before the SCIT,” he told the court.
He also said LHDN only disclosed, after the judicial review application had been filed, that it was relying on alleged negligence to justify issuing the assessments outside the statutory time limit.
Nizamuddin further informed the court that Mukhriz had already settled the additional tax assessment for the 2019 assessment year.
LHDN says case should be heard by tax tribunal
Marina argued that the additional assessments were issued outside the statutory period because LHDN had granted Mukhriz extensions of time to provide information and documents requested during its investigation.
“At the material time, an extension was given to prepare the documents and it is not fair to use that against the respondents,” she said.
She maintained that the SCIT was the proper forum, as determining whether the assessments were issued outside the statutory period required findings of fact, which fall within the tribunal’s jurisdiction.
Marina also submitted that the High Court, when exercising its judicial review jurisdiction, should not determine factual issues relating to tax assessments.
Assessments total nearly RM5 million
Mukhriz is seeking to quash additional tax assessment notices for the 2017, 2018 and 2019 assessment years amounting to RM2,558,875.90, RM2,445,004.91 and RM16,826.37 respectively.
The High Court granted the Pejuang president leave to proceed with the judicial review in January last year and ordered a stay on the enforcement of the disputed tax assessments pending the disposal of the case.
