Petronas withdraws appeal against High Court dismissal of judicial review over imposition of SST


Petroliam Nasional Berhad (Petronas) today withdrew its appeal against the Kuching High Court’s ruling that Sarawak is entitled to collect sales tax on petroleum products.

The Sarawak government, at the same time, also withdrew its cross-appeal over jurisdiction issue of the High Court on the state sales tax (SST).

A three-man bench of the Court of Appeal comprising justices Datuk Abdul Karim Abdul Jalil, Datuk Hadhariah Syed Ismail and Datuk Mohd Sofian Abd Razak struck out the appeal and cross-appeal and ordered each party to bear their own costs.

Petronas’ counsel Datuk Malik Imtiaz Sarwar and State legal counsel Datuk Seri J.C. Fong appearing for the Sarawak government and the Comptroller of SST Sarawak confirmed that the appeal has been withdrawn.

The court proceedings were conducted via video conferencing.

Co-counsel Alvin Chong for Petronas who attended the proceedings applied for the appeal to be withdrawn.

Also appearing for the Sarawak government and the Comptroller of SST Sarawak was state Attorney-General Datuk Talat Mahmood Abdul Rashid.

Through a Whatsapp message, Fong said following the withdrawal of the appeal, the High Court’s decision is affirmed.

On March 13, this year, the Kuching High Court ruled that Article 95B (3) of the Federal Constitution provided that the Legislature of Sabah and Sarawak may make laws for imposition of sales tax.

The High Court judge Azhahari Kamal Ramli said that the provision stated that any sales tax imposed by state law to be deemed among the matters enumerated in the state list, the State Sales Tax Ordinance and any subsidiary legislation made thereunder, is constitutional and valid.

He dismissed Petronas’s judicial review application to quash the notices of assessment issued by the Sarawak state government seeking the oil and gas company to pay RM1.3 billion in SST.

Petronas sought, among others, a declaration of certain sections of the notices as ultra vires to the Federal Constitution and null and void, and also sought a certiorari order that the notices dated Aug 28,2019, Oct 7,2019, and Nov 13,2019, issued by Sarawak state government to Petronas to be quashed.