The Inland Revenue Board is not authorised to take legal action against taxpayers who neglect to remit their income tax or commit other offences under the Income Tax Act 1967. The Court of Appeal established a landmark ruling that revenue counsel is not empowered to act against those who fail to pay income tax. They further ruled that if the board did so, without first obtaining permission from the public prosecutor, the legal action would be unconstitutional, null and void.

A three men bench, led by Datuk Abu Samah Noordin, made the landmark ruling in allowing an appeal by taxpayers who were charged in a Penang magistrate’s court for failing to declare their combined income amounting to RM700,000 for YAs 2003 and 2004.

The unanimous ruling would be a precedent as the judgment of the Court of Appeal was final.