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Tax arrears: Court strikes out Shafee's appeal to file counterclaim

Publish date: Thu, 29 Feb 2024, 07:20 PM

PUTRAJAYA (Feb 29): The Court of Appeal here on Thursday struck out lawyer Tan Sri Muhammad Shafee Abdullah's appeal against the High Court decision to disallow him from filing a counterclaim over the Inland Revenue Board’s (IRB) demand that he pays income tax arrears amounting to RM9.41 million.

A three-member bench led by Datuk Hanipah Farikullah held that Shafee's appeal was incompetent, as the subject matter was not appealable under Section 3 of the Courts of Judicature Act.

Hanipah, who sat with Datuk Azimah Omar and Datuk Wong Kian Kheong, also ordered the veteran counsel to pay costs of RM10,000.

Shafee was represented by Datuk Seri Rajan Navaratnam, Muhammad Farhan Muhammad Shafee and Wee Yeong Kang, while Norhisham Ahmad, Al-Hummidallah Idrus, Norzilah N Hamod @ Abdul Hamid and Muhammad Faqrol Syazreen Mohd Ghause acted for the IRB.

Following the decision, Rajan told reporters that his client is at liberty to file a fresh suit.

On April 13 last year, the High Court dismissed Shafee’s application to obtain leave to file a counterclaim, after finding that the counterclaim did not arise from the recovery of taxes, but from mala fide acts (done in bad faith) by the Malaysian Anti-Corruption Agency (MACC) and the Attorney General's Chambers (AGC), which did not fall within the set scope of the rule prohibiting a counterclaim.

On Dec 21 last year, Shafee was ordered by the High Court here to pay over RM5.5 million in income tax arrears to the IRB, after allowing the IRB's application for a summary judgement against the senior lawyer.

The IRB, which filed the suit on May 6, 2021, claimed that the lawyer had failed to pay the entire income tax arrears and the tax increase imposed on him amounting to RM9,414,708.32 for the assessment years of 2011, 2012, 2013, 2014 and 2016.

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