Court: Customs cannot impose travel ban on directors over company tax debts

Shah Alam: The High Court has ruled that the Customs Department cannot automatically impose travel bans on company directors solely due to their companies' tax debts. Judge Evawani Farisyta Mohammad stated that the Customs director-general must first have a valid reason to believe that the individuals are planning to leave the country without settling the tax before applying travel restrictions.

The judge emphasized that merely having outstanding tax is not enough to justify such a restriction. In her 35-page judgment, Evawani explained that outstanding tax alone does not automatically make the applicants a flight risk. She also found that the department failed to provide sufficient evidence showing the applicants intended to leave the country to avoid paying tax.

The court noted that the right to travel abroad is part of the right to personal liberty, protected under Article 5(1) of the Federal Constitution. The judge also found that the respondent had not followed the proper procedure for serving the travel restriction notices, as required by Section 49(3) of the now-repealed GST Act 2014.