THE Sarawak government’s bid to recover unpaid sales tax from Petronas has hit a snag. This follows the Kuching Court of Appeal’s decision to grant a stay of proceedings in the State government’s suit against the national oil corporation.
According to media reports, Court of Appeal judges, M.Nantha Balan, Supang Lian and Mary Lim allowed the appeal against an earlier dismissal by the High Court of the stay application after submissions here today.
High Court Judicial Commissioner, Christopher Chin had dismissed the application on Feb 11 and set March 13 for the hearing of the suit to proceed.
Petronas had applied for to the stay pending the outcome of its appeal against Chin’s decision on Jan 23 not to recuse himself from hearing the suit.
Datuk Malik Imtiaz Sarwar, who is the counsel for Petronas said the Court of Appeal had ruled there were special circumstances for a stay of proceedings pending the appeal which is to be heard in Putrajaya on March 6.
He said the judges had also clarified that all directions given with regard to the suit were also stayed.
The Star reported that the state government is suing Petronas over unpaid state sales tax on petroleum products amounting to RM1.3 billion.
The 5% tax under the State Sales Tax Ordinance 1998 came into effect on Jan 1 last year and Petronas is said to be the only oil company operating in Sarawak which has not paid the tax.