Petronas obtains leave to commence case against IRB over RM3.6 bln tax

Lawyer S. Saravana Kumar informed the court that IRB did not object to the application and agreed that leave be given to the company to initiate a judicial review application through a draft consent order provided by the company.

"The draft consent order is prepared by us and to save court time, all parties have reached a solution with the respondent (IRB) in agreeing to give permission to the applicant to proceed with the case," said the lawyer.

• Judge Datuk Ahmad Kamal Md Shahid later recorded the consent order but the date of the judicial review hearing has not been set by the court.

In today's proceedings, Saravana Kumar represented all applicants, namely Petronas and its subsidiary Petronas Carigali Sdn Bhd together with Sapura OMV Upstream (PM) Inc, and Tembungo Sub Block PSC while deputy solicitor Dr Hazlina Hussain represented the director-general of Inland Revenue as the respondent.

On July this year, Petronas and its subsidiary Petronas Carigali with Sapura OMV and Tembungo Sub Block PSC filed three judicial review applications against the IRB alleging that IRB’s action was “ultra vires, illegal, void, in excess of authority and irrational in making the additional tax assessments totalling RM3.6 billion”.

Petronas alleged that the IRB had breached Section 15(1) of the Petroleum (Income Tax) Act 1967 (PITA).

The national oil firm also alleged that IRB had misconstrued Section 72(1)(a) of PITA, which tantamount to accusing Petronas of tax avoidance.