Court throws out Najib’s bid to stay RM1.69 billion tax case

The High Court in Kuala Lumpur today upheld an earlier court decision on the government’s RM1.69 billion tax claim against former prime minister Najib Razak, allowing the Inland Revenue Board (LHDN) to proceed with the bankruptcy notice against him.

In the ruling sighted by MalaysiaNow, judge Ahmad Bache dismissed Najib’s application for a stay of execution of the July 22, 2020 summary judgment and imposed costs of RM15,000.

“After hearing submissions by both parties and having considered the firm position of the law above and the reasons advanced by the defendant and replies by the plaintiff, this court holds that the defendant has no strong grounds for a stay of execution to be granted, as the defendant had failed to discharge the burden of proving the existence of ‘special circumstances’ to the satisfaction of this court,” Bache said.

The government through LHDN filed the suit against Najib on June 25, 2019, seeking total payment of RM1.69 billion for income tax arrears from 2011 to 2017, with interest at 5% a year from the date of judgment, as well as costs and other relief deemed fit by the court.

The High Court ruled on July 22 last year that Najib had to pay LHDN the amount in question after allowing the tax agency’s application to enter a summary judgment against the former prime minister.

A summary judgement is when the court decides a particular case summarily, without calling witnesses to testify in a trial.

Najib, on May 31, had applied to strike out the bankruptcy notice filed against him on Feb 4, claiming among others that it was part of a conspiracy to destroy his political career.

He claimed in an earlier Facebook post that he was a victim of injustice, writing on April 6 that the case was imposed on him by the Pakatan Harapan government and continued by the Perikatan Nasional administration.

“Even when I was the prime minister, I had always paid income tax without fail, but this unjust tax of RM1.74 billion (including a penalty of RM46 million since last year) is an additional assessment and an unreasonable penalty,” he said.

In his judgment, Bache said every taxpayer, like every citizen, stands equal before the law.

“If this stay is granted to the defendant, who is a former prime minister and the former finance minister, the plaintiff will be estopped from filing any recovery actions against him.

“It will set a bad precedent to be followed and used by other taxpayers as grounds to avoid and/or delay paying taxes and give rise, albeit wrongly, to an inference that ‘double standards’ are being allowed and practised,” he said.

He said the court also holds that LHDN has the monetary ability to compensate Najib if he succeeds in his appeal at the Special Commissioner of Income Tax.

“There is no unquantifiable loss that could not be recovered from the plaintiff should the defendant succeed in this appeal.

“On the other hand, the defendant has not shown any cogent evidence to prove the plaintiff’s inability to compensate.

“All these reasons merit consideration and that the balance should tilt in favour of the plaintiff, to not granting the stay.”