Federal Court grants Najib, son leave to challenge unpaid income tax judgment

211208 TT13 - Najib Court-01

The Federal Court today granted leave for former prime minister Datuk Seri Najib Razak and his son Datuk Nazifuddin to challenge a summary judgment entered against them regarding the payment of RM1.69 billion, and RM37.6 million respectively, to the Inland Revenue Board (IRB).

The unanimous decision was made earlier today by a three-member bench, led by Chief Justice Tun Tengku Maimun Tuan Mat.

Tengku Maimun led the three-member bench earlier today.

The two other Federal Court judges who sat with her were Justices Datuk Nalini Pathmanathan and Datuk Mary Lim Thiam Suan.

Senior counsel Tan Sri Shafee Abdullah represented Najib and Nazifuddin. The other lawyers who represented the father-son duo were Muhammad Farhan Shafee, Hannah Kam Zhen Yi, Wee Yeong Kang, and Mohamed Reza Rahim.

IRB was represented by its deputy solicitor, Hazlina Hussain, while counsel Anand Raj from the Malaysia Bar, acted as ‘amicus curiae’ (friend of the court).

In granting leave, Tengku Maimun said the requirements of Section 96(a) and (b) of the Courts of Judicature Act, 1964 have been met.

Section 96(a) and (b) state that leave would only be given by the apex court or the Court of Appeal in any civil cause or matter involving a question of general principle decided for the first time, or a question of importance upon which further argument and a decision by the Federal Court will be to the public’s advantage.

Najib and Nazifuddin, who is the Olympic Council of Malaysia secretary-general, sought leave to file an appeal against the summary judgment obtained by IRB at the Kuala Lumpur High Court on July 20, 2020, and July 6, 2020 respectively, to recover the tax arrears.


The pair lost their appeal to set aside the summary judgment in the Court of Appeal on Sept 9, 2021. They were, however, granted an interim stay, pending the hearing of their leave to appeal the matter before the Federal Court.

In his submissions today, Shafee said IRB had acted in “bad faith” and had sought to bankrupt his clients even before the Special Commissioners of Income Tax (SCIT) could hear the merits of their defence to the additional tax assessments raised against them.

However, Hazlina argued that taxpayers could not dispute the tax assessments, and that Najib and Nazifuddin could take the matter up with the SCIT – which they had already done, with a hearing pending.

Anand, however, said the Federal Court’s judgment over the matter would benefit taxpayers and the IRB.

On Sept 9 last year, the Court of Appeal had said the Income Tax Act, 1967 provides a scheme on how tax assessments and collection should be made.

The Court of Appeal said any outstanding tax must be paid within a specified time, following an assessment and notice sent to a taxpayer. The court had then said the government, through its director-general, can continue to collect the outstanding tax under Section 106 of the Act, even if a taxpayer makes an appeal to the SCIT.

Najib and his son had filed nine questions of law at the Federal Court, including whether Section 106 (3) was unconstitutional, and if it usurped the power of judges under Article 121 of the Federal Constitution.