KUALA LUMPUR: The High Court has granted Datuk Seri Mukhriz Mahathir leave to challenge notices issued by the Inland Revenue Board (LHDN) over additional tax arrears exceeding RM5.02mil.
Justice Amarjeet Singh said there are issues that need to be addressed in the judicial review application.
He has set April 16 to hear the application on its merits.
The judge also allowed Mukhriz's request to stay the payment of the tax arrears until the April 16 hearing date.
Lawyer Nizamuddin Abdul Hamid represented Mukhriz, while Senior Federal Counsel Wan Shahida Wan Omar appeared for the respondents.
In his application, Mukhriz named the LHDN director-general or CEO, Finance Minister Datuk Seri Anwar Ibrahim, and the government as the first, second, and third respondents respectively.
He seeks a court order to quash the first respondent's additional tax assessment notice for 2017, 2018, and 2019, amounting to RM5,020,707.18, on the grounds that the action was illegal and unreasonable.
He also seeks a declaration that the decision to impose the penalty on him under Section 113(2) of the Income Tax Act (ITA) 1967 is void and beyond legal authority.
Mukhriz contends that LHDN wrongfully considered his disposal of shares in Opcom Holdings Bhd and dividends received from M Ocean Capital Sdn Bhd as taxable income, although they were not taxable.
"The first respondent's (LHDN) act of treating non-taxable income as taxable income constitutes unfair and unequal treatment towards me."
“The finance minister (the second respondent) abused his power for collateral purposes by controlling the first respondent for his own objectives,” Mukhriz said in his claims.
The former Kedah Mentri Besar also claimed that the additional tax assessment notices for 2017 and 2018 were issued on Sept 27, 2024, more than five years after the filing of income tax returns for those years.
He added that under Section 91(1) of the ITA, any additional tax assessment notice can only be issued beyond five years if there is evidence of fraud, wilful default, or negligence by a taxpayer.
"However, in the primary subject letter, the first respondent never alleged that I acted fraudulently, wilfully, or negligently," he claimed.
He is also seeking general and exemplary damages against the respondents.
The case is fixed for case management on Jan 7.
