Judge Ahmad Bache said that under the Income Tax Act, the court has no power to entertain any pleas from individuals, who wanted to dispute the taxmen’s assessment against them.
“Once LHDN has served the notice of assessment to the defendant (Najib), the court has no power to entertain the plea on the sum the government is seeking to recover on grounds that it is excessive or was wrongly accessed.
“He raised the defence that the sum he received was in a form of donation and the donation was not taxable under the law.
“However, these facts should be heard by the Special Commissioners of Income Tax. The court is not the appropriate forum to decide,” he said, adding that Najib has also filed an appeal against LHDN’s notice of assessment to the tribunal.
Summary judgment is a proceeding where the court decides on a case, through written submissions, without a full trial and calling witnesses.
LHDN filed a lawsuit against Najib last year, claiming tax arrears of over RM1.69 billion.
On Najib’s contention that Section 106 breaches Articles 13 and 121 of the Federal Constitution on rights to property as well as judicial powers, Ahmad said that the argument was misconceived.
“The Federal Court had previously dismissed constitutional challenges with regards to tax recovery.
“The court had ruled that there is nothing arbitrary in imposing income tax for the purpose of raising national revenue,” he added.
The judge also held that Section 106(3) does not usurp judicial power and it was merely a method of recovery.
“The rights of taxpayers are protected under Section 99 of the Income Tax Act by an appeal to the Special Commissioners of Income Tax.
“If he or she is dissatisfied with the commissioners’ decision, they can still appeal to the High Court against the findings,” Ahmad said.
The court also ordered Najib to pay RM15,000 in costs.
Najib was represented by Muhammad Farhan Shafee while LHDN was represented by its deputy revenue solicitor Abu Tariq Jamaluddin.
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