Court permits challenge to tax authority's RM4.8m settlement cancellation

The Federal Court has granted leave for a judicial review of the Inland Revenue Board's (LHDN) cancellation of a tax settlement arrangement worth RM4.8 million. The taxpayer contends that the settlement constitutes a final and conclusive agreement that should be enforceable under law, challenging the tax authority's right to unilaterally reverse the arrangement. In addition to overturning the cancellation, the applicant is seeking orders compelling the LHDN board to honour the original settlement terms. The case highlights ongoing tensions between taxpayers and revenue authorities over the finality of negotiated tax agreements in Malaysia. The judicial review will examine whether the LHDN acted within its legal powers in withdrawing from the previously agreed settlement. This decision comes as Malaysia's tax administration continues to face scrutiny over dispute resolution procedures and the binding nature of settlements reached between officials and taxpayers.