Ketua Pengarah Kastam v Howe Keat Sdn Bhd

Appellant(s): Ketua Pengarah Jabatan Kastam Diraja Malaysia

Respondent(s): Howe Keat Sdn Bhd

• YA Dato' Lim Chong Fong
• YA Datuk Azhahari Kamal bin Ramli
• YA Tuan Leonard David Shim

• The respondent imported a chemical product from Thailand and classified it under a tax-exempt tariff code; however, following an audit and chemical analysis, the appellant reclassified the goods under a taxable code and issued a bill of demand for RM201,636.33 in outstanding sales tax.
• The appellant issued a certificate under Section 22A of the Customs Act 1967 to formalize the classification decision, which the respondent challenged via judicial review after its internal appeal was rejected.
• The High Court quashed the appellant’s decision, ruling that the classification lacked a scientific basis because the appellant failed to produce the underlying chemist report in Court and further held that the sales tax could not be imposed retrospectively.

• Whether a certificate issued by the Director General under Section 22A of the Customs Act 1967 constitutes sufficient evidence of the facts stated therein, such that the appellant is not required to produce the underlying chemist report unless specifically ordered by the Court.
• Whether the burden of proof shifts to the respondent to rebut the prima facie evidence of a Section 22A certificate, and whether the respondent’s failure to request the production of the chemist report or the attendance of the expert is fatal to such a rebuttal.
• Whether the appellant is legally permitted to recover unpaid sales tax retrospectively under Section 17 of the Customs Act 1967 within the statutory six-year limitation period.

• The Court allowed the appeal, holding that Section 22A of the Customs Act 1967 is plain and unambiguous; the certificate is admissible as sufficient (prima facie) evidence, and the Director General is expressly exempted from giving further evidence or tendering chemist reports unless the Court orders otherwise.
• The Court found that while the certificate is rebuttable, the respondent failed to discharge its burden of proof because it did not invite the Court to order the production of the appellant's chemist report or the attendance of the expert to resolve the conflicting technical descriptions of the product.
• The Court clarified that the retrospective collection of sales tax is expressly permissible under Section 17 of the Customs Act 1967 where tax remains unpaid due to inadvertence, error, or misconstruction, provided the demand is made within the six-year timeframe.