THE High Court in Kuala Lumpur has ordered former prime minister Najib Razak’s son, Mohd Nazifuddin, to pay a RM37.6 million bill, as demanded by the Inland Revenue Board (IRB).

In accordance with tax laws, Nazifuddin, 37, must pay the arrears regardless of any appeal, the court ruled.

In his summary judgment delivered today, Justice Ahmad Zaidi Ibrahim said the IRB presented a “clear and obvious case, while the defendant had failed to raise a case with merit”.

“I have gone through the submissions by both parties and I’ve considered the available laws,” Zaidi said.

“I think the law is quite clear on the constitutionality (of Nazifuddin having to pay prior to any appeal).

“The defendant is not precluded from challenging the assessment notice later, before the Special Commissioner of Income Tax, as provided by legal procedures.”

The IRB had previously applied for a summary judgment, in which the court can choose to decide on the outcome of a case without hearing witness testimony, effectively bypassing a full civil trial.

Nazifuddin’s lawyer Muhammad Farhan Muhammad Shafee told reporters outside the courtroom that there will “definitely” be an appeal.

Farhan added that he would need to consult with his client on whether to apply for a stay of execution pending an appeal of the court’s payment order. 

Senior revenue counsel Norhisham Ahmad represented the IRB.

On March 2, Zaidi dismissed Nazifuddin’s request for a stay of proceedings of the case pending an appeal on the value of the arrears.

The IRB filed the writ of summons against Nazifuddin on July 24, 2019, demanding unpaid taxes for the assessment years from 2011 to 2017.

Nazifuddin is accused of failing to pay RM1.54 million, RM5.72 million, RM5.44 million, RM3.78 million, RM1.8 million, RM2.3 million and RM12.1 million in taxes between 2011 and 2017.

Additionally, for failure to settle the amount owed within 30 days of the issuance of the assessment notice on March 15, 2019, Nazifuddin was hit with a 10% penalty on the total amount, stipulated under Section 103 of the Income Tax Act 1967.

The IRB said Nazifuddin’s further failure to settle the amount within 60 days in accordance with the fact cost him an additional 5%, bringing the total to more than RM37.6 million.

Today’s decision means Nazifuddin’s lawyers failed to sway the high court with their constitutional arguments on the requirement to pay assessment notices regardless of appeal status.

“When this is brought to court at this stage, the court has no liberty to take into account any of our matters in defence because that is reserved for the Special Commissioner of Income Tax, although we argued that it may not be in line with certain constitutional provisions.

“That is why we intend to appeal this decision and take it up to the Federal Court,” said Farhan.

The Office of the Special Commissioners of Income Tax, under the Ministry of Finance, hears appeals from taxpayers dissatisfied with their income tax assessment set by IRB.

Case management for Nazifuddin’s tribunal appeal has been fixed for Wednesday, Farhan added. – July 6, 2020.