KETUA PENGARAH JABATAN KASTAM DIRAJA MALAYSIA v HOWE KEAT SDN BHD

Case Significance

Confirms that a certificate under section 22A of the Customs Act 1967 on tariff classification is sufficient but rebuttable evidence of the facts it states, placing the burden on the importer to displace it, in a challenge to a sales-tax assessment under the Sales Tax (Goods Exempted From Tax) Order 2018.

This Court of Appeal decision concerns the evidential effect of a Director General's certificate on the tariff classification of imported goods, in a judicial review of a sales-tax assessment. The respondent company had imported a chemical product from Thailand and, since 2020, had declared it under a tariff code that it said fell within the exemption in section 2 and Schedule A of the Sales Tax (Goods Exempted From Tax) Order 2018. Following an audit, the Royal Malaysian Customs Department took a sample of the goods, and its Chemistry Department ruled that the product was an anionic surface-active preparation falling under a different tariff code attracting 10% sales tax. Customs issued a certificate under section 22A of the Customs Act 1967 to that effect and a bill of demand for sales tax of RM201,636.33. The High Court allowed the importer's application for certiorari and quashed the Customs decision. On appeal, the central questions concerned the evidential effect of the section 22A certificate, whether a registered chemist's report had to be produced to establish the classification, and how the recovery provisions operated. The Court held that the section 22A certificate is sufficient evidence of the facts it states, though it is not conclusive and remains rebuttable, so that the burden lay on the importer to displace it, and that the classification adopted by Customs was supportable. It also addressed the recovery provisions, noting that the demand had been made within the six-year period, and that the Director General retained power to demand payment beyond six years in cases of fraud or default. Concluding that the High Court had erred, the Court allowed the appeal, set aside the High Court's decision and awarded costs of RM18,000.00. The judgment is significant for confirming that a section 22A certificate carries evidential weight that the taxpayer must rebut, rather than being merely a bare assertion.