Sept 9 court date set for Najib, son to raise constitutional argument in bid to challenge Inland Revenue Act

The Court of Appeal today dismissed the application by Datuk Seri Najib Razak and his son, Datuk Mohd Nazifuddin Najib, to refer constitutional questions to the Federal Court in relation to their appeal regarding the non-payment of RM1.69 billion and RM37.6 million respectively, to the Inland Revenue Board (IRB).

In dismissing the application put forth by Najib and Nazifuddin’s lead counsel, Tan Sri Muhammad Shafee Abdullah, a three-member bench led by Datuk Abdul Karim Abdul Jalil, said the court preferred to proceed with their appeal and would cover the (constitutional) issues and other matters, during the appeal proper.

Shafee had earlier made an application, to refer several questions of constitutional importance to the Federal Court, including whether Section 106 (3) of the Inland Revenue Act, 1967 is unconstitutional, and whether it usurped the power of judges, as provided under Article 121 of the Federal Constitution.

Shafee had argued the IRB’s imposition of a summary judgment on his clients without hearing their defence at the Kuala Lumpur High Court was like “tying their hands and legs”, and this violated the rights of the former prime minister and his son under Article 5 and Article 8, in relation to Article 121 of the Federal Constitution.

In his application, Shafee said a ruling by the Federal Court would give a clear direction to all parties involved regarding the case.

Article 5 concerns matters related to the liberty of a person; Article 8 states all persons are equal before the law and entitled to the equal protection of the law; while Article 121 refers to the court’s power to hear an application.

Shafee argued the IRB was attempting to declare his client a bankrupt via a summary judgment, and that there should instead, be a full trial in the High Court before a ruling is made on whether Najib must settle the outstanding amount owed.

However, IRB’s senior federal counsel Dr Hazlina Hussain, said there was nothing ambiguous, nor unconstitutional about Section 106 (3). She submitted that High Court judge Datuk Ahmad Bache had also previously ruled Section 106 (3) did not encroach into the powers of the judiciary.

On July 6, 2020, Kuala Lumpur High Court Judge Ahmad Zaidi Ibrahim ordered Nazifuddin to pay RM37.6 million to IRB in unpaid taxes for the period between 2011 and 2017. A bankruptcy notice was served to him on April 30 this year.

On July 22, 2020, Ahmad ruled that Najib had to pay the IRB RM1.69 billion, inclusive of additional taxes and penalties for the assessment years from 2011 to 2017. The court had allowed the application by the IRB to enter a summary judgment against the former premier.

On June 14, Ahmad dismissed Najib’s application for a stay of execution in paying the amount.

The IRB is also instituting bankruptcy proceedings against Nazifuddin.

The Court of Appeal later fixed Sept 9 to hear the full extent of Najib’s appeal against the High Court’s decision.

The two other members of the bench were Datuk Vazeer Alam Mydin Meera and Datuk Supang Lian.

The other counsels who appeared for Najib today were Hannah Kam Zhen Yi and Reza Rahim.

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