Petronas withdraws appeal against dismissal of judicial review over Sarawak sales tax

PUTRAJAYA: Petronas today withdrew its appeal against the Kuching High Court’s ruling that Sarawak is entitled to collect sales tax on petroleum products.

The Sarawak government also withdrew its cross-appeal over the issue of the High Court’s jurisdiction over the state sales tax (SST).

A three-man Court of Appeal bench comprising Abdul Karim Abdul Jalil, Hadhariah Syed Ismail and Mohd Sofian Abd Razak struck out the appeal and cross-appeal and ordered each party to bear their own costs.

Petronas counsel Malik Imtiaz Sarwar and state legal counsel JC Fong, appearing for the Sarawak government and the comptroller of SST Sarawak, confirmed that the appeal had been withdrawn.

The court proceedings were conducted via video conferencing.

Co-counsel for Petronas Alvin Chong, who attended the proceedings, applied for the appeal to be withdrawn.

Also appearing for the Sarawak government and the comptroller of SST Sarawak was state attorney-general Talat Mahmood Abdul Rashid.

Fong, in a WhatsApp message, said after the withdrawal of the appeal that the High Court’s decision had been affirmed.

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

Judge Azhahari Kamal Ramli said the provision stated that any sales tax imposed by state law to be deemed among the matters enumerated in the state list, the SST Ordinance and any subsidiary legislation made thereunder, was constitutional and valid.

He dismissed Petronas’ judicial review application to quash the notices of assessment issued by the Sarawak government seeking RM1.3 billion in SST from the oil and gas company.

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