PUTRAJAYA: The Court of Appeal has fixed Sept 4 for its decision in an appeal by Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin to stay bankruptcy proceedings over failure to settle tax arrears amounting to billions of ringgit.
A three-judge panel chaired by Justice Dr Alwi Abdul Wahab set the date after hearing submissions from parties here on Friday (July 3).
"We need to go through the submissions," Justice Alwi said.
Other judges on the panel were Justices Dr Shahnaz Sulaiman and Ong Chee Kwan.
ALSO READ: Federal Court rules Najib, son have to settle over RM1.69bil in unpaid taxes
Najib and Nazifuddin are appealing a High Court decision dated Nov 17 last year that dismissed their application to stay bankruptcy proceedings against them.
The proceedings were initiated by the Inland Revenue Board (LHDN) following Najib and Nazifuddin's failure to settle tax arrears amounting to RM1.69bil and RM37.6mil respectively.
Earlier, Najib's lawyer Tan Sri Muhammad Shafee Abdullah told the court that his client has been slapped with RM1.69bil from an additional tax assessment despite having already paid his income tax.
He claimed that the exorbitant assessment was based on a Saudi Arabian donation that Najib received and returned after the general election.
Shafee said the donation, which should have been tax-exempted, has been "erroneously" treated as additional income and taxed.
ALSO READ: Najib, son fail to stay bankruptcy proceedings
"We have raised this since the beginning but they (the LHDN) never replied to us on how they computed (the additional tax assessment)," he said.
The lawyer urged the court to grant Najib a stay on the bankruptcy proceedings pending a hearing at the Special Commissioner of Income Tax (SCIT) for him to be able to dispute the tax assessment.
"If he is declared bankrupt, he will have problems engaging counsel and he has to make payment through other sources," Shafee said.
He said the amount was "oppressive" on Najib and not granting him a stay would be a breach of natural justice.
Meanwhile, LHDN senior revenue counsel Norhisham Ahmad said that while the amount imposed was undeniably high, it was not a valid reason for Najib to obtain a stay on the bankruptcy proceedings.
ALSO READ: LHDN continuing court action in recovery of RM1.69bil tax arrears from Najib, Dewan Rakyat told
He said a high amount did not equate to special circumstances warranting a stay.
"It is in the law that he has to pay first and dispute later," he said.
In 2020, two separate High Courts allowed LHDN’s applications to enter a summary judgment to recover tax arrears of RM1.69bil from Najib and RM37.6mil from Nazifuddin for the period between 2011 and 2017.
On Oct 16, 2023, the Federal Court ruled that father and son must pay the arrears after dismissing their appeal to set aside the High Court decision.
Najib and Nazifuddin are disputing the tax assessment in two SCIT proceedings scheduled for September and October, respectively.
