Petronas Fails Application To Stay Payment Of Rm1 3bil To Sarawak

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KUCHING: The High Court here has dismissed Petronas' application for a stay of proceedings to enforce the payment of state sales tax on petroleum products amounting to over RM1.3bil to the Sarawak government
Judge Azhahari Kamal Ramli ruled that Petronas had failed to prove special circumstances to justify a stay of the enforcement proceedings
Petronas applied for the stay pending the hearing of its appeal against the dismissal of its judicial review application on March 13 to declare the state sales tax unconstitutional
The appeal is fixed for hearing in Putrajaya on June 17
In the hearing of the stay application, Petronas argued that it would suffer financial hardship if it had to pay RM1.3bil to the state government before the appeal was heard
It also said its revenues and ability to pay dividend to the Federal Government would be affected if forced to pay the tax, due to current low oil prices caused by falling global demand and the Covid-19 pandemic
However, Justice Azhahari ruled that a taxpayer's financial hardship was not ground to justify a stay of the enforcement proceedings
"The established legal principle is that a stay or suspension is not granted to give anyone time to settle its taxes or what it owes," he said when dismissing the application on Wednesday (May 6)
His ruling was delivered online via Skype, while the hearing of the case on April 29 was also done on Skype
Justice Azhahari also said the state government could refund the sum paid by Petronas should the national oil corporation win its appeal, as Sarawak had accumulated reserves of more than RM27bil according to the Auditor-General's Report 2018
He added that Petronas' argument that its appeal would be rendered futile if it had to pay the tax beforehand had no merit
State legal counsel Datuk Seri J.C. Fong and state Attorney General Datuk Talat Mahmood Abdul Rashid appeared for the state government while counsel Datuk Malik Imtiaz Sarwar and Alvin Chong represented Petronas. - Star

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