Judicial commissioner Kenneth St James said there were no “rare and compelling circumstances” that warranted waiting for the outcome of Najib’s tax appeal.
He said the former prime minister’s appeal might or might not have any bearing on this civil proceeding to justify the stay of the suit sought by the three defendants.
“This civil suit can and should be decided on current law and current legal principles,” he said in his 14-page judgment released yesterday.
He noted that the Rules of Court 2012 also stated that it was for the court “to make such order or give such direction as it sees fit, to secure the just, expeditious and economical disposal of a matter.”
The judge also said the fact that the defendants had a pending appeal before the Special Commissioners of Income Tax (PKCP) did not warrant a stay of the suit.
“The Inland Revenue Board (LHDN) is statutorily entitled to file this separate civil claim for the tax payable as a debt due to them,” he said.
Last May, the apex court granted leave for Najib to challenge a summary judgment entered against him requiring payment of RM1.69 billion to LHDN.
One of the issues that will be decided is whether sub-section 106(3) of the Income Tax Act is “unconstitutional” on the ground that it “usurps the judicial power” of the courts.
In the present case, the plaintiff (LHDN) assessed an additional tax for 2015 on Golden Citrus Sdn Bhd, the first defendant.
The company lodged an appeal against this additional assessment to PKCP.
Despite the pending appeal, LHDN filed a suit under the Income Tax Act 1967 and included two company directors, Lean Gin Ken and Tan Swee Leong, as co-defendants.
The three defendants then filed an application to stay this civil suit, pending the “hearing and ultimate disposal” of their appeal with the special commissioners.
The defendants argued that the suit was for the same amount of tax that they were appealing against before the special commissioners.
The defendants said a judgment in this civil suit should wait for the outcome of the decision of the special commissioners.
The defendants also argued that Najib’s pending appeal before the Federal Court had a bearing on this application for a stay of proceedings.
The defendants said Najib’s pending Federal Court hearing and decision constituted a “special circumstance” that justified a stay of this suit.