PUTRAJAYA – Former Prime Minister Datuk Seri Najib Razak and his son, Datuk Mohd Nazifuddin, have successfully obtained a stay of bankruptcy proceedings over their failure to settle RM1.69 billion and RM37.6 million in tax arrears respectively, Berita Harian reported today.
A three-member Court of Appeal panel chaired by Datuk Dr Alwi Abdul Wahab unanimously allowed their appeal, ruling that the issues raised before the Special Commissioners of Income Tax (SCIT) are sufficiently serious to warrant halting the bankruptcy process.
The other judges sitting on the panel were Datuk Dr Shahnaz Sulaiman and Datuk Ong Chee Kwan.
Delivering the judgment, Justice Alwi stated that the High Court Judicial Commissioner (JC) erred in deciding that the appellants would not suffer irreparable harm simply because Section 111 of the Income Tax Act (ITA) 1967 allows for tax refunds if their appeal before the SCIT succeeds.
“We agree with the appellants’ submission that the JC’s reason was confined solely to the recovery of money. It does not address the distinct and irreversible consequences of bankruptcy,” Justice Alwi said.
He emphasized that the statutory “pay first, dispute later” mechanism under the ITA cannot serve as an absolute bar overriding the court’s inherent discretion to grant appropriate remedies in special circumstances.
Justice Alwi further noted that the court identified novel legal issues regarding the overlap between the funds subjected to additional tax assessments and the funds forming the subject matter of ongoing criminal charges against Najib.
“This raises a new question of whether alleged illegal proceeds can simultaneously be taxed as lawful income,” he added.
The appellate court set aside the High Court decision dated Nov 17, 2025, ordering the Inland Revenue Board (LHDN) to pay RM30,000 in costs to both appellants.
Bankruptcy proceedings will remain stayed until the conclusion of the father-son duo’s tax assessment appeals before the SCIT, which are scheduled for hearing in September and October. -MalayaDailyToday
