Tuesday, November 24

High Court to hear Sarawak govt’s claim of RM1.3 bln in unpaid oil tax against Petronas on Jan 13


KUCHING: The High Court here has fixed Jan 13, 2020 for the hearing of the Sarawak government’s claim against Petronas for the nonpayment of RM1.3 billion in state sales tax on oil and other penalties.

The application by the state government is to determine several questions of law of public and constitutional importance.

Among these questions are whether section 2(1) of the Petroleum Development Act 1974 (PDA74) is null and void by reason that it contravenes Article 13(2) of the Federal Constitution as being a law which seeks to deprive the second defendant of property, namely Petroleum, found on State land within Sarawak, without adequate compensation and that if the answer to it is in the affirmative, whether any agreement, acts or conduct taken or instrument issued pursuant to section 2 of PDA74, are void, invalid and /or unconstitutional.

Petronas in their defence pleaded that because of the PDA74 and the Vesting Instrument which “vested” ownership of oil and gas in Sarawak territory on Petronas and the cash payment of five per cent made to the State since 1976, Petronas does not have to pay any other taxes, such as SST, to the state Government.

The determination of these questions would decide if the vesting of petroleum under the PDA was constitutional or null and void, and Petronas’ liability to pay SST to the Sarawak government.

An officer in the State Legal Department has confirmed the dates of hearing for the cases.

The hearing before the High Court may be postponed as Petronas’ Counsel had written two letters to the Chief Judge Tan Sri David Wong to replace the presiding Judge Christopher Chin whose Court has been allocated the Civil Suit based on the Court’s Electronic filing system.

The Chief Judge has yet to decide if he would entertain the request to change the presiding Judge.