Najib, son get stay on RM1.7bil tax arrears order

(FMT) – The Court of Appeal today allowed former prime minister Najib Razak and his son Nazifuddin’s bid to halt a summary judgment order that ordered them to pay more than RM1.7 billion in tax arrears.

Judge Azizah Nawawi granted an interim stay for Najib and his son Nazifuddin’s tax cases, pending their leave applications to appeal before the apex court.

“There are special circumstances for us to allow an interim stay pending their leave application hearing in the Federal Court,” she said.

Other judges who sat with Azizah were Che Mohd Ruzima Ghazali and Gunalan Muniandy.

Earlier this year the High Court turned down Najib’s application to stay the RM1.69 billion summary judgment order, citing that he failed to show there were any “special circumstances”.

Meanwhile, another High Court had ordered Nazifuddin, a businessman, to pay RM37.6 million in unpaid taxes from 2011 to 2017.

The Inland Revenue Board (LHDN) filed a lawsuit against Najib last year, claiming tax arrears of over RM1.69 billion.

The taxman obtained a summary judgment in the RM1.69 billion tax suit on July 22, 2020. The summary judgment was affirmed by another Court of Appeal in September.

A summary judgment is obtained when the court decides on a case, through written submissions, without a full trial and calling witnesses.

A bankruptcy notice was also filed against Najib earlier this year after he failed to pay the RM1.69 billion, as the summary judgment was not stayed. Nazifuddin was also slapped with a bankruptcy notice in May.

Both father and son have since brought their tax cases before the Federal Court, in an attempt to quash the summary judgments.

Najib and Nazifuddin were represented by lawyers Muhammad Shafee Abdullah and Muhammad Farhan Shafee while senior revenue counsel Hazlina Hussain appeared for LHDN.

During submissions earlier, Shafee told the court that this stay application should be granted on the grounds that there are special circumstances.

“The enforcement of the summary judgment should be stayed until his (Najib) case is heard in Federal Court.

“If he is declared bankrupt, he will lose his Pekan MP seat and cannot contest in any election,” he said, making reference to the bankruptcy proceedings initiated by LHDN to recover the unpaid taxes.

Shafee also said there is mala fide (bad faith) on the government’s part to declare Najib as bankrupt.

Meanwhile, Hazlina objected to the father and son’s bids to halt the summary judgment on the grounds that their tax recovery action is part and parcel of the taxman’s job.

“The applicant’s (Najib) allegation that we acted in bad faith for this recovery action is, therefore, unfounded.

“If every taxpayer goes to court and files a stay against summary judgments, it will prejudice us,” she said.