Court rules that Perak govt cannot impose tax on coastal activities

Perak state assistant legal adviser Suhaila Harun tells court the Perak government is taking steps to repeal the Perak Coastal Management Enactment at the next assembly meeting.

PUTRAJAYA: The Federal Court today granted a declaration to a tin ore processing company that the Perak government has no authority to levy tax under an enactment passed by the state.

A nine-member bench, chaired by Chief Justice Tengku Maimun Tuan Mat, sitting in its original jurisdiction under Article 128 of the Federal Constitution, gave the declaration to Vale Malaysia Minerals Sdn Bhd.

The company had earlier obtained leave from a single judge of the Federal Court in August to challenge the Perak legislative assembly’s competency to pass a law to collect a tax which comes under the purview of Putrajaya.

At the outset of today’s hearing, Perak state assistant legal adviser Suhaila Harun said the Perak government was not opposing the company’s petition.

“The state is also taking steps to repeal the Perak Coastal Management Enactment at the next assembly meeting,” she said.

Lawyer Gopal Sri Ram, who appeared for the company, said he would not ask for costs as the apex court could not make such an order when proceedings were conducted under its original jurisdiction.

Federal Counsel Shamsul Bolhassan told the bench the federal government, which was a respondent in the action, supported Vale Malaysia’s action.

The company, which was incorporated in July 2009, was in the business of operating a tin ore distribution centre for Vale Group, its parent company, to the Asian market.

With this in mind, the company said it built and owned the Teluk Rubiah Maritime Terminal in Lumut Perak.

The company said it chose to locate in Perak because of the various incentives which were actively promoted by the federal and the state investment authorities.

It said in November 2016, Vale Malaysia was informed by the Perak government that it had passed an enactment to coordinate the development and management of coastal activities.

The company said the state wanted to impose fees and coastal charges under the enactment, which was to come into force in early 2017.

Vale Malaysia said the state’s action was an attempt to legislate a new source of revenue which only Parliament could do.