Ketua Pengarah Hasil Dalam Negeri v Lush Development Sdn Bhd

Appellant(s): Ketua Pengarah Hasil Dalam Negeri

Respondent(s): Lush Development Sdn Bhd

Pihak Terkilan: Bar Malaysia

• YA Dato' Azizul Azmi Bin Adnan
• YA Dato' Ong Chee Kwan
• YA Dato' Sri Mohd Radzi bin Harun

• The taxpayer paid tax for the year of assessment 2017 under section 4C of the Income Tax Act 1967 on compensation received for compulsory acquisition of land, treating it as taxable business income under the self-assessment regime, with no appeal lodged and the assessment becoming final.
• The Federal Court in Wiramuda (M) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri subsequently held section 4C unconstitutional as contravening Article 13(2) of the Federal Constitution, but its grounds contained no direction as to whether this ruling was retrospective or prospective.
• The taxpayer wrote to the Revenue seeking recognition of Wiramuda and a refund; receiving no response, it commenced judicial review, which the High Court allowed, ordering a refund with interest from the date proceedings were filed.

• Whether a Federal Court declaration of unconstitutionality operates retrospectively by default, absent an express direction, or whether prospectivity should be treated as the norm (including under the "selective" prospective overruling doctrine in Re Spectrum Plus).
• Whether mere non-response to a deadline unilaterally fixed by a taxpayer constitutes a reviewable "decision, action or omission" under Order 53 rule 2(4) of the Rules of Court 2012, as distinct from a freestanding continuing public duty to apply binding precedent.
• Whether sections 97, 99 and 111 of the Income Tax Act 1967 (finality of assessments and limitation on refund of overpayments) bar a constitutional restitution claim, and whether certiorari is an appropriate remedy for an omission as opposed to mandamus.

• The Court held that retrospectivity is the default rule for judicial decisions of unconstitutionality absent an express direction; since Wiramuda contained no such direction (and the panel declined to clarify, being functus officio), it applies retrospectively without confinement to the original litigant or to pending cases, and floodgates concerns were rejected for lack of evidence and proportionality to federal revenue.
• The Court agreed that bare non-response to a unilaterally-fixed deadline does not itself found judicial review, but held that the Revenue's continuing public duty (per Arumugam Pillai) to apply binding Federal Court rulings uniformly crystallised independently upon delivery of Wiramuda, giving rise to a valid and timely judicial review on that separate basis.
• The Court held sections 97, 99 and 111 of the ITA inapplicable to a constitutional restitution claim of this kind, affirmed the 5% interest award from the date proceedings commenced, but clarified the relief should be framed as mandamus (compelling recognition of Wiramuda and refund) rather than certiorari, since there was no extant decision capable of being quashed; the appeal was accordingly dismissed.