THE Inland Revenue Board’s (IRB) RM1.69 billion income tax suit against Najib Razak failed to take into account that US$620 million (RM2.36 billion) was returned by the former prime minister in 2013, the Kuala Lumpur High Court heard today. 

“After the (2013) election, Najib decided to send back US$620 million to the account that so-called donated to him. 

“That US$620 million has not been taken into computation for the assessment,” Najib’s lead counsel Muhammad Shafee Abdullah told the court

“How can that be right? And this can be proven because there is a paper trail, and yet it is not considered. In fact, Bank Negara has given permission for the transfer.”

At the SRC International trial, former attorney-general Mohamed Apandi Ali testified in March that Najib had returned US$620 million to the Saudi royal family. The sum was from the US$681 million that was channeled into his personal bank accounts, which he said was a donation from the Saudis.

Najib had also testified that the US$620 million was returned to the royal family in August 2013, two months after the general election. Najib said the sum was not utilised. 

The government, through the IRB, filed the suit against Najib in June last year, seeking RM1.69 billion in unpaid taxes between 2011 and 2017.

Najib’s lawyers are arguing against an application by IRB for a summary judgment, which would allow the high court to decide on the case without hearing witnesses’ testimony, effectively bypassing a full civil trial. 

IRB’s lawyers said that under Section 106(3) of the Income Tax Act, that the court shall not entertain any plea, such as whether that the amount of tax sought to be recovered was excessive, incorrectly assessed, under appeal or incorrectly increased.

Najib’s lawyers submitted that there are “significant triable issues” that must be considered at trial, such as the taxability of a donation; the time frame of the additional assessments raised; and methods of calculations.

Shafee also submitted that Section 106(3) of the Income Tax Act is an invalid law to use as it curtails the power of the court to fully hear the merits of the suit, citing a previous case, known as the Semenyih Jaya decision in 2017, between a company and the Hulu Langat District Office which affirmed the separation of powers and judicial independence to hear cases.

Deputy revenue solicitor Abu Tariq Jamaluddin maintained that pleas raised by the defendant cannot be entertained by the court.

He said a certificate issued by the director-general of IRB under Section 142 (1) of the Income Tax Act was conclusive evidence to enable the court to enter judgment against Najib.

Abu Tariq said Najib has no meritorious defence or any triable issues to be tried, and that summary judgment should be allowed under Order 14 Rule 2 of the Rules of the court 2012 against the defendant with costs.

Justice Ahmad Bache, who presided over today’s hearing, said he will take about a month to come to a decision and will inform both parties a week before he delivers it.  

Najib has maintained that the funds received from the Saudis were a donation. In a Facebook post in July last year, he said such donations are tax deductible.

In a previous submission to the high court earlier this year, Shafee claimed that the then Pakatan Harapan government was attempting to put an end to Najib’s political career by declaring him a bankrupt.

Article 48 of the federal constitution states that a member of Parliament or assemblyman can be disqualified if he or she is declared bankrupt.

Najib, who turns 67 next month, is the MP for Pekan in Pahang, a seat he has held since 1976.

He faces 42 criminal charges in five cases linked to 1Malaysia Development Bhd, with three ongoing trials. The verdict for the SRC International trial will be delivered on July 28. – June 22, 2020.