Court of Appeal maintains ruling ordering Najib, son Nazifuddin to pay RM1.7b in tax arrears

(MMO) – The Court of Appeal has ruled that both Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin must pay RM1.69 billion and RM37.6 million in income tax arrears, respectively, after allowing the Inland Revenue Board (IRB) to proceed with summary judgments obtained from the High Court as part of their civil recovery proceedings.

A three-member bench led by appellate judge Datuk Abdul Karim Abdul Jalil unanimously dismissed the appeals brought by Najib and his son in connection with the IRB’s suit after hearing on the constitutional issues involving Section 106(3) of the Income Tax Act was fixed for today.

On the legality of Section 106(3) of the Act, Abdul Karim said the panel was of the opinion that it was not unconstitutional as argued by the appellants, noting that the legal status of the law has been clear, as consistently determined by both the High Court and Federal Court.

“Overall, we found that there are no merits in both appeals and no misdirections made by both High Court judges that need to be remedied by this court.

“Both appeals are dismissed with costs of RM10,000 each,” he said during a virtual hearing which lasted almost five hours.

Najib’s lawyer Tan Sri Muhammad Shafee Abdullah then said he would seek leave to file an appeal at the Federal Court and asked for an interim stay to be granted pending this.

Abdul Karim, who sat with Justice Datuk Vazeer Alam Mydin Meera and Justice Datuk Supang Lian, then allowed for an interim stay to be granted with conditions that the appellants must submit their appeal notice and stay application latest by next week lest the interim stay lapses.

“It is with hope that the filing of this (interim stay) application by Tan Sri (Muhammad Shafee) for it to be heard be expedited,” he said, to which Muhammad Shafee replied that he will submit a certificate of urgency for both cases.

Najib and Nazifuddin were also represented by counsel Muhammad Farhan Shafee, Wee Yeong Kang, Mohamed Reza Rahim and Hannah Kam Zhen Yi, while senior revenue counsel Hazlina Hussain appeared for the IRB.

Both Najib and Nazifuddin are appealing against the decisions of two separate High Courts which allowed the Inland Revenue Board’s (IRB)’s applications to enter summary judgment to recover tax arrears of RM1.69 billion from Najib and RM37.6 million from Nazifuddin, respectively.

On July 22, last year, High Court judge Datuk Ahmad Bache allowed the IRB’s application for a summary judgment to be entered against Najib in its suit to recover the RM1.69 billion in taxes from the latter for the period between 2011 and 2017.

Najib lost his bid in the High Court on June 14 this year to obtain a stay of execution on the summary judgment.

The Malaysian government through the IRB also filed bankruptcy proceedings against the former premier at the High Court in April this year, around the time of his conviction appeal on the SRC International Sdn Bhd conviction was being heard.

Najib had been sentenced to 12 years’ jail and fined RM210 million after being convicted of abuse of power, criminal breach of trust and money laundering in relation to SRC International by the High Court in July 2020.

As for Nazifuddin, High Court judge Ahmad Zaidi Ibrahim, had on July 6 last year, ordered him to pay RM37.6 million in unpaid tax to IRB after allowing IRB’s application to enter a summary judgment against him in its (IRB) tax arrears suit seeking to recover the unpaid amount from him (Nazifuddin) between 2011 and 2017.

He was served with a bankruptcy notice on April 30, this year over failure to pay the amount.