PUTRAJAYA: Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin today failed in their appeal to quash the High Court's decision compelling them to settle RM1.69 billion and RM37.6 million in unpaid taxes and penalties respectively.
The former prime minister and his son had appealled against the High Court's summary judgment against them in the Inland Revenue Board's (IRB) suit over taxes they purportedly owed the board.
A three-member Court of Appeal bench today dismissed the father and son's bid on grounds that their appeal has no merit.
In the unanimous decision, Datuk Abdul Karim Abdul Jalil, who led the bench, said the High Court judge did not make an error in the decision on the summary judgment.
"Having taken everything into account, we find that there is no merit in both appeals and that no error has been made by the High Court judge that needed correction by this court (Court of Appeal)," he said.
On the issue the appellants raised that Section 106(3) of the Income Tax Act 1967, was contrary to Article 121 of the Federal Constitution, Karim said the legal position of the former provision has always been consistent, citing various precedents.
"The legal position on Section 106(3) has always been consistent since then until now and it has been decided upon by eminent judges," he said in the proceedings which were conducted via Zoom.
Section 106(3) provides that the courts cannot entertain any plea when it is argued that the amount of tax sought to be recovered is an excessive one, incorrectly assessed, under appeal or incorrectly increased while Article 121 deals with the judicial power of the federation.
"We find that there is no merit in both appeals. We therefore dismiss both appeals," he said, ordering RM10,000 in costs to be paid to the respondent for each appeal.
The other judges who presided were Datuk Vazeer Alam Mydin Meera and Datuk Supang Lian.
The court, however, allowed an application by lawyer Tan Sri Muhammad Shafee Abdullah, who represented both the appellants, for an interim stay of the effect of the decision as they will be appealing against the decision at the Federal Court.
Najib and Nazifuddin were also represented by counsels Muhammad Farhan Shafee, Wee Yeong Kang, Mohamed Reza Rahim and Hannah Kam Zhen Yi, while senior revenue counsel Dr Hazlina Hussain and revenue counsel Norhisham Ahmad and Al Hummidallah Idrus appeared for the IRB.
On July 22 last year, the High Court allowed the IRB's application for a summary judgment to be entered against Najib in its suit to recover RM1.69 billion in taxes from the latter for the period between 2011 and 2017.
Najib was ordered to pay the sum.
The government, through IRB, filed the suit against Najib on June 25, 2019, asking him to settle the unpaid tax with interest at 5 per cent, a year from the date of judgment, as well as costs and other relief deemed fit by the court.
On July 6 last year, the High Court ordered Nazifuddin, 38, to pay RM37,644,810.73 in unpaid taxes to the IRB.
This was after a summary judgment order was entered in the IRB's tax arrears suit seeking to recoup the unpaid amount from Nazifuddin between 2011 and 2017.
The suit was filed against him on July 24 last year.
On Feb 4, the board issued bankruptcy notices against the Pekan member of parliament and his son following their failure to pay the sums.