Court strikes out Shafee’s appeal to file counterclaim on tax arrears

PUTRAJAYA: The Court of Appeal here struck out Tan Sri Muhammad Shafee Abdullah’s appeal against the High Court’s decision to disallow him to file a counterclaim over the Inland Revenue Board’s (IRB) demand that he pay income tax arrears amounting to RM9.41mil.

A three-member bench led by Justice Datuk Hanipah Farikullah on Thursday (Feb 29) held that Muhammad Shafee’s appeal was incompetent as the subject matter was not appealable under Section 3 of the Courts of Judicature Act.

Justice Hanipah, who sat with Datuk Azimah Omar and Datuk Wong Kian Kheong, also ordered the veteran counsel to pay costs of RM10,000.

Datuk Seri Rajan Navaratnam, Muhammad Farhan Muhammad Shafee and Wee Yeong Kang represented Muhammad Shafee. At the same time, IRB senior counsels Norhisham Ahmad, Al-Hummidallah Idrus, Norzilah N Hamod @ Abdul Hamid and Muhammad Faqrol Syazreen Mohd Ghause acted for the IRB.

Meanwhile, Rajan told reporters that his client can file a fresh suit.

On April 13, last year, the High Court dismissed Muhammad Shafee’s application to obtain leave to file a counterclaim after finding that the counterclaim does not arise from the recovery of taxes but from mala fide acts by the Malaysian Anti-Corruption Agency (MACC) and the Attorney- General’s Chambers (AGC), which does not fall within the set scope of the rule prohibiting counterclaim.

On Dec 21, last year, Muhammad Shafee was ordered by the High Court to pay over RM5.5 million in income tax arrears to the Inland Revenue Board (IRB) after allowing IRB’s application for a summary judgment against the lawyer.

IRB, which filed the suit on May 6, 2021, claimed that the lawyer failed to pay the entire income tax arrears and the tax increase imposed on him amounting to RM9,414,708.32 for the assessment years of 2011, 2012, 2013, 2014 and 2016. – BK