Petronas gives undertaking to withdraw appeal, court heard

PUTRAJAYA: The Court of Appeal was told today that Petroliam Nasional Berhad (Petronas) has given the undertaking to withdraw its appeal against the Kuching High Court’s decision that Sarawak is entitled to collect sales tax on petroleum products.

State legal counsel Datuk Seri J C Fong told a three-member bench that in view of the undertaking by Petronas to withdraw the appeal, the Sarawak State was not objecting to the postponement application made by the oil and gas company.

Fong is representing the state government of Sarawak and the Comptroller of the State Sales Tax of Sarawak.

Earlier, Petronas’s counsel Datuk Malik Imtiaz Sarwar informed the court that by way of a letter dated yesterday, Petronas had asked for the appeal hearing to be adjourned for reasons set out in the letter.

For that reason, the hearing scheduled for today has been reverted to mention of the matter, said Malik, who then requested the court to set Aug 3 for mention of the appeal.

Outside the court, Malik told reporters that the appeal was adjourned to Aug 3 to allow Petronas to finalise the terms of settlement with the Sarawak state.

Malik said based on the letter, Petronas has given the undertaking to withdraw the appeal before Aug 3.

He said the agreement is pending settlement being finalised and internal process to be fulfilled.

Justice Datuk Seri Kamaludin Md Said who led the appellate court bench allowed the adjournment and fixed Aug 3 for mention.

The other two judges presiding were P. Ravinthran and Datuk Abu Bakar Jais.

On March 13 this year, the Kuching High Court ruled that Article 95B (3) of the Federal Constitution provided that the Legislature of Sabah and Sarawak may make laws for the imposition of sales tax.

The High Court judge Azhahari Kamal Ramli said that provision stated that 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.

He dismissed Petronas’s judicial review application to quash the notices of assessment issued by the Sarawak state government seeking the company to pay RM1.3 billion in SST.

Petronas was also seeking, among others, a declaration of certain sections of the notices as ultra vires to the Federal Constitution and null and void, and also a certiorari order that the notices dated Aug 28, 2019, Oct 7, 2019, and Nov 13, 2019, issued by Sarawak state government to Petronas to be quashed.

Malik also told the media that the Sarawak government’s lawsuit to recover unpaid SST from Petronas has been set for case management on next Friday.