What legal precedent does the LHDN rely on for tax recovery?

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The Inland Revenue Board Relies on the "Pay First, Talk Later" Precedent from a Federal Court Ruling

The Inland Revenue Board (LHDN) is relying on the "pay first, talk later" principle, which was affirmed by a Federal Court ruling in October 2023. This established legal precedent mandates that taxpayers must settle their assessed tax liabilities, irrespective of any ongoing appeals or challenges. The LHDN has cited this ruling to counter arguments for a stay on tax recovery actions.
Federal Court Ruling Upholds Tax Payment Obligation

A significant Federal Court decision in October 2023 reinforced the principle that tax assessments must be paid even when appeals are pending. This ruling provides the legal foundation for the LHDN's position that tax liabilities are due and collectible without delay. The board has indicated that this precedent is central to its stance in ongoing cases.
LHDN Cites Ruling Against Stay Applications

In arguments before the Court of Appeal, the LHDN, represented by senior revenue counsel Norhisham Ahmad, has pointed to the October 2023 Federal Court ruling. This is in response to applications seeking to halt tax recovery proceedings. The LHDN's position is that there are no exceptional circumstances that would justify a deviation from the established "pay first, talk later" principle.
Application in Najib Razak's Case

The LHDN's reliance on this precedent is evident in its ongoing case involving former prime minister Datuk Seri Najib Razak. His legal team argued that proceeding with bankruptcy action would render his appeal before the Special Commissioners of Income Tax meaningless. However, the LHDN countered by referencing the Federal Court's affirmation of the "pay first, talk later" principle, which requires tax assessments to be settled regardless of pending appeals.

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What legal precedent does the LHDN rely on for tax recovery?

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