The Income Tax and GST Appeal Processes D.P. Naban, Senior Partner 2 November 2016 1
Agenda Income Tax Appeal Dispute Resolution Proceedings Special Commissioners of Income Tax High Court Judicial Review GST Appeal Review by the Director General The GST Appeal Tribunal High Court Judicial Review 2
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Taxpayer Income Tax GST Special Commissioners of Income Tax Judicial Review Review by the Director General of Customs GST Appeal Tribunal 4
Income Tax Appeal Process Filing of tax returns / Issuance of assessment Apply within 3 months Within 30 days In exceptional cases, judicial review is available. Mentions, case managements, hearing and decision. File notice of appeal (Form Q) Review period + Negotiation process Appeal before Special Commissioners of Income Tax Appeal within 21 days Expedite via Dispute Resolution Proceeding High Court Appeal within 1 month Court of Appeal 5
GST Appeal Process Decision by GST officer Judicial Review is available in exceptional circumstances notwithstanding the availability of the GST Tribunal Court. Apply within 3 months Apply within 30 days Review application by Director General Is this a matter listed in Fourth Schedule, GST Act 2014? Yes No Within 3 months Within 30 days Judicial review proceedings at High Court Within 1 month GST Appeal Tribunal Within 1 month Court of Appeal High Court Within 1 month Within 1 month 6 Appeal to the Federal Court 1 st stage: leave application 2 nd Stage: Substantive hearing Court of Appeal
Appeal Process Income Tax Appeal A taxpayer may file an appeal to the Special Commissioners of Income Tax ( SCIT ) within 30 days after the service of the notice of assessment raised by the Inland Revenue Board ( IRB ). GST Appeal A taxpayer may apply to the Director General of Customs for a review of the decision of a GST officer within 30 days from the date of notification of the decision. 7
Officer of GST includes: the Director General of Customs; any Deputy Director General of Customs and Excise; any Assistant Director General, Director, Senior Assistant Director and Assistant Director of Customs and Excise; any Senior Superintendent, Superintendent or Assistant Superintendent of Customs and Excise; any Chief Customs Officer, Senior Customs Officer or Customs Officer; and any police officer. 8
Appeal Process Income Tax Appeal The Director General of Income Tax ( DGIR ) has 12 months from the date of receipt of the Notice of Appeal to review the assessments against which the appeals were made. GST Appeal The Director General of Customs shall make a decision and notify the taxpayer within 60 days from the date the application is received or within the time practicable. 9
GST Appeal If it is a decision of the Director General of Customs, a taxpayer may file an appeal against the decision to the GST Appeal Tribunal within 30 days from the date of notification of the decision. The Tribunal shall make a decision without delay and where practicable, within 60 days from the first day the hearing commences. 10
Appeal Process Income Tax Appeal During the review period, the DGIR may: Require the taxpayer to furnish such particulars as the DGIR thinks necessary; Require the taxpayer to produce books or other documents in his custody or under his control; Summon any person who in the DGIR s opinion is able to give evidence to appear before the DGIR; and Examine any person so appearing on oath or otherwise. GST Appeal There is no equivalent review procedure by the Director General of Customs once a Notice of Appeal has been filed. 11
Appeal Process Income Tax Appeal IRB may initiate Dispute Resolution Proceedings with the view of finding an amicable solution to resolving the dispute at hand. GST Appeal Customs may attempt to resolve the matter through negotiations and settlement. 12
Appeal Process Income Tax Appeal If the DGIR and the taxpayer are unable to find a favourable solution during the Dispute Resolution Proceedings, the DGIR will then forward the Notice of Appeal to the SCIT. GST Appeal Any taxpayer who is aggrieved by the decision of the Director-General in respect of a GST matter except for the matters specified in the Fourth Schedule may appeal to the GST Appeal Tribunal within 30 days from the date the disputed decision was made known to the taxpayer. A taxpayer may further appeal the decision of the SCIT to the High Court on a question of law within 21 days. Any party aggrieved by the decision of the Tribunal may appeal to the High Court on a question of law or mixed fact and law within 30 days. 13
Matters specified in Schedule 4 GST Act include: Any matter which is inherent of a statutory restriction under the Act; Any refusal of voluntary registration; Any refusal of group registration; Offsetting tax against refund; Any refusal of payment by installment; Any refusal to remit any penalty; and Any advance ruling. 14
Form SCIT An appeal to the SCIT is lodged by way of filing a Notice of Appeal (Form Q). The Notice of Appeal shall state the grounds of appeal and contain other administrative particulars required. GST Appeal Tribunal An appeal to the GST Appeal Tribunal is lodged by way of filing a Notice of Appeal (Form B). The Notice of Appeal shall state the grounds of appeal and contain other administrative particulars required. 15
Membership 16 SCIT An appeal to the SCIT is heard by a panel of 3 members. Each appeal is presided by the Chairman. At least one of the panel shall be a person with judicial or other legal experience. GST Appeal Tribunal An appeal to the GST Appeal Tribunal is heard by a panel of 3 members. Each appeal is presided by the Chairman or the Deputy Chairman. The Chairman and Deputy Chairmen are appointed from members of the Judicial and Legal Service. Other members are those who in the opinion of the Minister, have wide knowledge or extensive experience in any field of activities relating to GST, customs or taxation.
Representation SCIT Taxpayer may be represented by an advocate or a tax agent or by both an advocate and a tax agent. The DGIR may be represented by an authorised officer, a legal officer or an advocate GST Appeal Tribunal Taxpayer may conduct his case himself or may be represented by any person whom he may appoint for that purpose. The Director General of Customs may be represented by an authorised officer appointed by him. 17
Hearing of the Appeal SCIT The taxpayer bears the onus of proving that the notices of assessments are excessive or erroneous. The Special Commissioners may confirm or discharge the assessment, or direct the DGIR to amend the assessment. The Special Commissioners will give their decision in the form of a deciding order. GST Appeal Tribunal No express onus. The Tribunal has the power to affirm, vary or set aside the Director-General of Customs decision. Any decision made by the Tribunal shall be in Form E. 18
Alternative Appeal Process: Judicial Review In exceptional cases, the taxpayer can seek judicial review within as a legal recourse to challenge the decisions made by public authorities. A judicial review application must be made within 3 months of the decision. The possible grounds to challenge are: a. Procedural impropriety b. Error of law c. Unreasonableness d. Improper exercise of power e. Disruption of natural justice 19
In order to commence judicial review proceedings, the taxpayer must first obtain leave from the High Court. As held by the Federal Court in Mohd. Nordin Johan v The Attorney-General, Malaysia [1983] CLJ (Rep) 271, the sole question at the leave stage in a judicial review application is whether the application is frivolous. 20
If leave is granted, the taxpayer may then commence his judicial review application. If successful, the taxpayer may pray for the High Court to exercise its jurisdiction to grant various remedies including: an order of certiorari to quash the impugned decision; grant declaratory relief; and award damages including interest. 21
Questions? Thank you 22