Rohas-Euco Industries Bhd v Ketua Pengarah Kastam

Appellant(s): Rohas-Euco Industries Bhd

Respondent(s): Ketua Pengarah Jabatan Kastam Diraja Malaysia

• YA Datuk S. Nantha Balan A/L E.S. Moorthy
• YA Dato' Lim Chong Fong
• YA Dato' Ahmad Kamal Bin Md. Shahid

• The appellant, a registered taxpayer under the Goods and Services Tax Act 2014 (GST Act), claimed a refund for input tax credits (ITC) for the taxable periods of May to August 2018.
• The appellant had applied for an extension of time to submit its GST returns for these periods, but received no response from the respondent.
• The respondent, after conducting an audit, rejected the appellant's ITC claim and demanded payment of the rejected amount, solely on the ground that the GST returns were filed late.

• Whether Section 8(1) of the Goods and Services Tax (Repeal) Act 2018 (GST Repeal Act) extinguished the appellant's right to claim input tax credits due to late filing of GST returns.
• Whether the respondent's rejection of the ITC claim, which amounted to forfeiture, was legally permissible under the GST Act or the GST Repeal Act.
• Whether the High Court erred in dismissing the judicial review application by concluding that the respondent was at liberty to reject the claim due to late submission.

• The Court held that Section 8(1) of the GST Repeal Act applied only to the appellant's ITC claim for August 2018, not the preceding months, and did not provide for the extinguishment of the right to refund due to late filing.
• The Court found no provision in either the GST Act or the GST Repeal Act that authorised the forfeiture of input tax credits, although the respondent was entitled under Section 38(5) of the GST Act to withhold the refund temporarily for late submission.
• The Court ruled that the appropriate penalties for late submission are those prescribed in Section 41(6) of the GST Act (fine and/or imprisonment), not forfeiture of ITC, and therefore the respondent's decision to forfeit the ITC was illegal. The High Court's judgment was set aside, and the judicial review application was allowed.