The Unexpected Notice
A property investment company that had been running smoothly since 2007 was taken by surprise one day in July 2021. Out of the blue, an unexpected letter arrived. This wasn’t just any letter; it was a Notice of Assessment from the tax department, and it came with an unpleasant surprise—a large extra tax bill for the year 2021. The tax department had calculated this amount using a rule called the Real Property Gains Tax Act of 1976 (RPGTA), but the company thought there was something unfair about the whole process.
The tax department had based this extra tax on the value of the company’s properties, using a report from Jabatan Penilaian dan Perkhidmatan Harta (JPPH), which estimated the properties’ worth to be quite high. But the company had their own valuation done by a private firm they trusted, Jones Lang Wootton. The private firm’s valuation was much lower, which meant the company expected to pay much less tax than the tax department demanded.
Feeling frustrated, the company thought, “Why should we pay so much more just because the tax department used a different valuation?” Not only did they feel the assessment was too high, but they were also upset because the tax department hadn’t shown them the JPPH report before deciding on the higher tax bill.
The Challenge
Determined to make things right, the company decided to challenge the tax department’s decision in the High Court. They argued that they should have been given access to the JPPH report and deserved a proper explanation about why the tax department used a higher valuation than their own private assessment.
The tax department, however, saw things differently. They argued that if the company disagreed with the assessment, they should have taken it to a special tax court called the Special Commissioners of Income Tax (SCIT) instead of the High Court. The tax department also insisted they didn’t need to provide the JPPH report, as there was no rule requiring them to do so.
The Judgment
After considering both sides, the judge in the High Court made a surprising decision. The judge ruled in favor of the company, agreeing that it was only fair for the tax department to share the JPPH report and provide an explanation. Because the tax department hadn’t done so, the judge allowed the company’s request to review the tax decision. The judge even ordered the tax department to pay the company RM3,000 for the trouble.
The Aftermath
The court’s decision was a win for the company, highlighting that fairness and transparency are essential—even in tax matters. The tax department still had the right to appeal the decision if they wished, but they had only 30 days to do so.
In the end, the company felt a sense of justice. This case reminded everyone that even when it comes to taxes, fairness and openness should always be upheld.
Relevant Laws
- Aturan 53 Kaedah-Kaedah Mahkamah 2012
- Seksyen 4(a) & Seksyen 127(3)(b) Akta Cukai Pendapatan 1967
