Kementerian Kewangan Malaysia & Anor v HA Pack Industry Sdn Bhd

Court of Appeal · · Tax Law, Constitutional & Administrative Law

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Kementerian Kewangan Malaysia & Anor v HA Pack Industry Sdn Bhd
CourtCourt of Appeal
Judgment Date7 November 2025
Date Uploaded24 November 2025
Legal TopicsTax Law, Constitutional & Administrative Law
Parties

Appellant(s):

  • Kementerian Kewangan Malaysia
  • Ketua Pengarah Jabatan Kastam Diraja Malaysia

Respondent(s): Ha Pack Industry Sdn Bhd

Bench
  • YA Dato' Lim Chong Fong
  • YA Datuk Azhahari Kamal bin Ramli
  • YA Dato' Ahmad Kamal Bin Md. Shahid
Facts & Background
  • The LMW operator engaged in 675 "drop shipment" deliveries of raw materials from its licensed manufacturing warehouse to two other LMW companies, facilitated by a local trading company.
  • Following an audit, the second respondent (Customs) classified these transactions as local sales, exceeding the LMW operator's permitted quota, and issued Bills of Demand for Goods and Services Tax and import duties.
  • The LMW operator's appeal to the second respondent was rejected, and a subsequent appeal to the first respondent (Ministry of Finance) resulted in the final rejection of remission for the remaining 50% of the demanded sum, leading to judicial review proceedings.
Issues for the Court
  • Whether the High Court erred in finding that the LMW operator's transactions constituted export sales, thereby exempting them from import duties and GST.
  • Whether the High Court correctly assessed the significance of the LMW operator's failure to use the prescribed customs forms (GPB-1) and adhere to the regulatory framework for LMW operations.
  • Whether the first respondent's decision to deny further remission of duties was a lawful and rational exercise of discretion, or if it was irrational or ultra vires.
Decision
  • The Court of Appeal allowed the appeal by the government bodies and dismissed the LMW operator's appeal, setting aside the High Court's decision.
  • The Court held that the LMW operator failed to comply with mandatory documentary procedures (e.g., using GPB-1 for LMW-to-LMW transfers), which was crucial for determining the nature of sales, thus justifying the imposition of duties.
  • The Court found that the first respondent's refusal of further remission was a lawful and rational exercise of discretion, given the LMW operator's non-adherence to licensing conditions and failure to consult the second respondent on its business model.
Link to JudgmentView Full Judgment

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