KUALA LUMPUR, Jan 24 – The Inland Revenue Board’s lawsuit against former prime minister Datuk Seri Najib Razak for RM1.69 billion in unpaid taxes from 2011 to 2017 was a political move, his chief defence lawyer argued today.
During today’s High Court hearing of Najib’s application for a stay of the matter, lawyer Tan Sri Muhammad Shafee Abdullah asserted that the action was meant to kill off the Barisan Nasional adviser’s political career.
The Pekan MP previously said he could not pay the sum claimed, and Article 48(1)(b) of the Federal Constitution states that a person is disqualified from being an elected lawmaker if he is an undischarged bankrupt.
“Once my client is labelled a bankrupt, he will be out of the political arena.
“Politically he is gone,” Muhammad Shafee said when applying for the stay.
Muhammad Shafee argued that the matter should only be heard after the end of Najib’s related trials involving SRC International Sdn Bhd corruption trial and 1Malaysia Development Berhad (1MDB).
He said the IRB’s assessment was based on funds amounting to billions of ringgit at the centre of both cases.
The lawyer reiterated that Najib did not have the means to settle the tax arrears as legally required before an appeal for a review may be made to the Special Commissioners of Income Tax, even if the former PM’s assets suddenly increased in value tenfold.
Muhammad Shafee went as far as claiming only billionaire Jeff Bezos, the owner of US e-commerce giant Amazon, would be able to pay the RM1.69 billion.
Senior lawyer Datuk DP Naban, who appeared for the IRB, countered that Najib’s stay application was premature and should only come after a full judgment is delivered.
“To stay the entire proceeding now shows the the fear of losing or unable to pay,” he said, arguing that granting this now would prevent the court from even considering a summary judgment.
Citing the Income Tax Act, he said the courts should not consider appeals over tax arrears claimed by the IRB when this is litigated.
Specifically, Section 106 (3) of the Income Tax Act states that in any proceedings under Section 106 of the Act, the court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased.
Naban also suggested that it was not certain the IRB would initiate bankruptcy proceedings against Najib upon any failure to pay, as there were other measures it could take.
“We could go order for sale, garnishing proceeding or writ of seizure or sale,” he added.
Today was also set for the High Court to hear the IRB’s application for a summary judgment of the matter.
High Court judge Datuk Ahmad Bache then fixed February 28 for his decision on whether the IRB could proceed with its lawsuit against Najib after hearing submissions from both lawyers.
On June 25 last year, the government through IRB sued Najib for RM1.69 billion in unpaid tax with interest of 5 per cent a year from the date of judgment, as well as cost and other relief deemed fit by the court.
This followed Najib’s failure to respond to an initial inquiry by the IRB over additional tax assessments of RM1.47 billion in March 2019, resulting in a 10 per cent hike of RM147 million in April and another compounded 5 per cent hike of RM80 million in May.
On August 8 last year, Najib applied for a stay of the IRB’s suit pending his appeal on the tax assessment to IRB.
However, the IRB submitted that Najib must still pay the entire RM1.69 billion despite his appeal against the tax assessment.
IRB Monitoring Unit assistant director Hisyamuddin Mohd Hassan, in his supporting affidavit, said that according to Section 103 of the Income Tax Act 1967, all the assessed tax shall be due and payable on the day the notice of assessment is served whether or not the person appeals against the assessment.