PETRONAS today withdrew its appeal against the Kuching High Court’s ruling that Sarawak is entitled to collect sales tax on petroleum products.

The Sarawak government, at the same time, also withdrew its cross-appeal over the jurisdiction of the High Court on the state’s sales tax (SST).

A three-man bench of the Court of Appeal comprising justices Abdul Karim Abdul Jalil, Hadhariah Syed Ismail and Mohd Sofian Abd Razak struck out the appeal and cross-appeal and ordered each party to bear their own costs.

The court proceedings were conducted via video conferencing.

Co-counsel for Petronas Alvin Chong applied for the appeal to be withdrawn. 

State legal counsel J.C. Fong and state Attorney-General Talat Mahmood Abdul Rashid appeared for the Sarawak government and the Comptroller of SST Sarawak.

Also appearing for the Sarawak government and the Comptroller of SST Sarawak was state Attorney-General Datuk Talat Mahmood Abdul Rashid.

Through a Whatsapp message, Fong said following the withdrawal of the appeal, the High Court’s decision is affirmed.

On March 13, this year, the Kuching High Court ruled that Article 95B(3) of the federal constitution allowed Sabah and Sarawak to make laws for imposition of sales tax.

High Court judge Azhahari Kamal Ramli said the provision stated that any sales tax imposed by state law to be deemed among the matters enumerated in the state list, the State Sales Tax Ordinance and any subsidiary legislation made thereunder,  is constitutional and valid.

He dismissed Petronas’s judicial review application to quash the notices of assessment issued by the Sarawak state government seeking the oil and gas company to pay RM1.3 billion in SST.

Petronas sought, among others, a declaration of certain sections of the notices as ultra vires to the federal constitution and null and void, and a certiorari order that the notices dated August 28, 2019, October 7, 2019, and November 13, 2019, issued by the Sarawak government to Petronas, be quashed. – Bernama, August 3, 2020.