Judicial commissioner Roz Mawar Rozain held that a person facing a tax recovery lawsuit was not entitled to file a counterclaim against the government.

“The defendant (Shafee) contended that the filing of the lawsuit was done in bad faith and was a collateral attack against him for defending a former prime minister (Najib Razak).

“However, the court observed that the defendant’s counterclaim was against parties like the Malaysian Anti-Corruption Commission (MACC) and the Attorney-General’s Chambers (AGC), which are not part of today’s proceedings,” she said.

She said Shafee could take up the matter against the two agencies in another proceeding.

Roz Mawar also said any dispute over tax assessments must be taken up with the special commissioners of income tax (SCIT).

“Under our tax scheme, he (Shafee) can file an appeal to SCIT but payment must be made first,” she said, adding that if the commissioner subsequently found the tax assessment to be incorrect, any excess money paid will be refunded.

The court fixed July 26 to hear LHDN’s application for summary judgment against Shafee.

Summary judgment is obtained when a court decides based on affidavits filed that a defendant has no defence to a claim and there are no issues which warrant the testimony of witnesses at a full trial.

In 2021, LHDN filed a suit against Shafee for alleged tax arrears of RM9.41 million.

It claimed that Shafee owed the government RM8,543,180.28 in unpaid tax over five years – RM434,326.17 for 2011, RM978,854.11 (2012), RM3.58 million (2013), RM1.73 million (2014) and RM1.82 million (2016).

Lawyer Rajan Navaratnam appeared for Shafee, while LHDN was represented by revenue counsel Al-Hummidallah Idrus.

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