Court grants Najib and son stay of bankruptcy proceedings
A Malaysian court has granted a stay of bankruptcy proceedings for former leader Datuk Seri Najib Razak and his son regarding unpaid tax arrears. The panel of judges ruled that the lower court erred in equating the potential for bankruptcy to mere monetary loss, noting that the 'pay first, dispute later' tax rule should not override judicial discretion.
Why it matters
This decision sets a significant legal precedent regarding the balance between government revenue collection mechanisms and the protection of individuals from irreversible bankruptcy consequences.
PUTRAJAYA: Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin have succeeded in their appeal to stay bankruptcy proceedings against them over failure to settle tax arrears amounting to billions of ringgit.
A three-judge panel chaired by Justice Dr Alwipa Abdul Wahab unanimously allowed the stay application by Najib and Mohd Nazifuddin in the decision here on Friday (Sept 4).
Other judges on the panel were Justices Dr Shahnaz Sulaiman and Ong Chee Kwan.
Justice Alwi, who read the decision, said the learned Judicial Commissioner (JC) who dismissed Najib and Mohd Nazifuddin's stay application had erred when he held that the appellants suffer no irreparable harm on the basis of Section 111 of the Income Tax Act (ITA) 1967.
Section 111 guarantees a refund of any tax overpaid, should the appeal by Najib and Mohd Nazifuddin before the Special Commissioner of Income Tax (SCIT) on their tax arrears succeed.
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