Case Citation : Ketua Pengarah Kastam v Biovision & Greenergy Sdn Bhd & Anor [2023] MLJU 2245
Prepared by : Nurul Fatihah binti Mohamad Arof
How the Tax Dispute Began
This dispute concerned a RM4,365,395.33 bill of demand issued by Customs to recover GST input tax refunds relating to expenditure incurred before the company’s GST registration.
Customs had reviewed the company’s claims, requested supporting documents and paid the refunds. Following a later audit, however, Customs sought repayment on the basis that the company had not obtained the necessary approval for its exceptional input tax claims.
The company successfully challenged the demand before the Customs Appeal Tribunal. Customs then appealed to the High Court.
The Procedural Issue: Identifying the Right to Appeal
The High Court upheld the company’s preliminary objection because Customs had failed to identify the statutory provision giving it the right to appeal.
The High Court explained that Order 55A of the Rules of Court 2012 provides the procedure for an appeal but does not itself create a right of appeal. The relevant statutory basis must be properly identified in the originating process.
The Tax Issue: Could Customs Require Separate Prior Approval?
The High Court also considered the merits and found that the company had complied with Regulation 46 of the Goods and Services Tax Regulations 2014.
It rejected Customs’ position that separate approval had to be obtained before the claim could be submitted through Form GST-03. That additional requirement was not stated in the legislation and could not be introduced through interpretation.
The Company’s Legitimate Expectation
The High Court found that Customs’ review, approval and payment of the claims supported the company’s legitimate expectation that those claims would be allowed. This was considered alongside the company’s compliance with the statutory requirements.
The Outcome
Customs’ appeal was dismissed with RM3,000 in costs, leaving the Tribunal’s decision setting aside the bill of demand intact.
Why This Decision Matters
The decision highlights the importance of applying the requirements actually stated in tax legislation. It also shows how an authority’s review and approval of a taxpayer’s application can become relevant when a demand is later challenged.
Nurul Fatihah’s Involvement
Nurul Fatihah assisted counsel for Biovision & Greenergy Sdn Bhd in the High Court proceedings.
