Friday, August 19, 2022

SST: Court strikes out Petronas application for State Sales Tax to be declared null and void

Secara Rawak

KUCHING: A Kuching High Court today dismissed an application by Petroliam Nasional Berhad (Petronas) for a judicial review to declare the State Sales Tax (SST) imposed by the Sarawak Government as null and void.

In making the ruling, High Court Judge Azhahari Kamal Ramli also awarded costs of RM50,000 to the respondents, which are the Sarawak Comptroller of State Sales Tax and the Sarawak government.

He said there were no grounds for the court to grant the declaration as Article 95B(3) of the Federal Constitution provides that the Legislature of Sabah and Sarawak may also make laws for the imposing of sales tax, and any sales tax imposed in the two states shall be deemed to be among the matters enumerated in the State List and not in the Federal List.

Azhahari Kamal said since Article 95B(3) of the Constitution stated any sales tax imposed by state law to be deemed among the matters enumerated in the state list, the State Sales Tax Ordinance and any subsidiary legislation made thereunder is constitutional and valid.

“Based on the above reasons, there is no merit in the application for the declaratory relief,” he added as reported by Bernama.

The High Court heard the submissions from the parties involved last Jan 3 and 4. Petronas as the applicant was represented by counsels Malik Imtiaz Sarwar and Alvin Chong, while the respondents were represented by the state legal counsel J C Fong and State Attorney-General Talat Mahmood Abdul Rashid.

The application, among others, was to seek a declaration from the court that the State Sales Tax (Taxable Goods and Rate of Tax) (Amendment) (No 2) Order 2018, Section 2, 7, 8, 11(1), 12(1), 12(6), 12(7) and 15(d) of the Sarawak Sales Tax Ordinance 1998 and Regulation 19 C, Sarawak State Sales Tax Regulations 1998 were ultra vires the Federal Constitution and thus null and void.

Speaking to reporters outside the court later, Malik Imtiaz said that he would be waiting for further instructions from his clients whether to proceed to appeal against the decision or otherwise.

“We will be studying the grounds of the dismissal before discussing further (on the next course of action) with our client (Petronas) on the matter,” he said.

Meanwhile, Fong said he hoped the court’s decision would be accepted by Petronas and it would not proceed to appeal against the judgment.

“And (I hope) Petronas, Petros (state-owned oil and gas company) and the State government will work together to help the oil and gas industry, which is currently coming under challenging time because of low oil prices and low global demand,” he added.

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