KUALA LUMPUR (Feb 21): The Court of Appeal has granted a stay of proceedings in two tax dispute cases between PNSB Water Sdn Bhd, Puncak Niaga Sdn Bhd (PNSB) and the government over the water company's tax assessments from 2012 to 2017, and 2018 for a sum of almost RM1.2 billion.

A three-member bench comprising Court of Appeal judges Datuk S Nantha Balan, Datuk Mohd Nazlan Mohd Ghazali and Datuk Dr Choo Kah Sing granted PNSB a stay pending the disposal of the appeal proper.

The bench then set May 21-23 for the two appeals proper and other appeals to be heard by both parties.

The appeal stems from a High Court decision on Dec 4 last year, where it dismissed an application by PNSB for a judicial review against the tax assessment.

The case stems from PNSB’s request that the Minister of Finance exercise his power under section 135 and/or section 127(3A) of the Income Tax Act 1967 (Act 53) to either direct the director general of the Inland Revenue Board (IRB) to set aside the said assessment or for the minister himself to exempt the assessment made by PNSB.

PNSB claims that the minister’s non-response to the two letters it sent to his office in 2020 requesting him to exercise his power to exempt the tax was a rejection by the minister to use his power under the law, which is the crux of the Judicial Review.

PNSB said that the minister’s denial was a denial of legitimate expectation.

PNSB was represented by S Saravana Kumar assisted by Yap Wen Hui & Tan Jia Hua from the law firm Rosli Dahlan Saravana Partnership, while the counsel for the Attorney General’s Chambers was senior federal counsel Liew Horng Bin.