KUALA LUMPUR (Feb 26): For 10 hours yesterday, three company directors of a duty-free company stood at the Magistrate’s Court in Pengkalan Hulu, Perak, as 600 charges were read to them for allegedly violating Section 65D of the Customs Act which deals with the licensing of duty-free goods.

However, the law firm representing Seruntun Maju Sdn Bhd is crying foul over the decision to charge the company, calling it a malicious prosecution.

This, it claimed, is because the duty-free company has already obtained a judgment from the Court of Appeal that ruled that the conditions set out in Section 65D are ultra vires of the Act itself.

The appeals court decision made last June by a three-member bench with the written judgment by Justice Datuk Hanipah Farikullah was upheld by the Federal Court on Jan 11.

Hence, Messrs Rosli Dahlan Saravana Partnership, representing Seruntun, is questioning why the Perak Customs Department had proceeded to prosecute its client despite the apex court’s decision.

The three directors — Ahmad Zubir Khalid, 61, Ong Bok Siong, 62, and Mohd Radzuan Abdullah, 55 — had claimed trial to all the 600 charges against them and the company.

They are accused of not abiding by the conditions of their licences that require the company to keep the sales receipts issued to buyers, as well as details of the buyers' passport and vehicle licence registration number.

Another person, Lean Choon Hock, 43, who is the company’s manager, was however not present during yesterday's proceedings that began at 10am and ended at 8pm. All of them were represented by lawyer Louis Liaw Vern Xien from the law firm.

The move to charge the company and three directors was made although the law firm had sent a letter on Wednesday, advising the Perak Customs Department not to proceed with it as the issues they were charged with are related to the Court of Appeal and Federal Court decision that ruled that the bills of demands are ultra vires of Section 65D of the Customs Act.

“Hence, there can be no criminal action taken based on an ultra vires bill. The law firm had also cautioned Customs Perak that their action is both contempt of court and could account for malicious prosecution,” a source in the legal firm said.

Seruntun's Singapore-based parent company, Duty Free International Ltd, noted that the criminal charges were made on the basis that Seruntun and its officers had breached the conditions of the duty-free licence issued by Customs to the company under Section 65D of the Customs Act.

“However, as previously announced, the legality of the conditions that were allegedly breached was challenged by Seruntun through a judicial review application (civil proceeding) on Nov 23, 2017,” it said in a statement.

Noting that “the conditions were conclusively held to be null and void” by the Court of Appeal and Federal Court, the statement said: “Thus, Seruntun and its officers had pleaded not guilty and had claimed trial against these charges brought by Customs.”

It is understood that Customs Department legal head Datuk Saiful Edris Zainuddin had defended the decision to go ahead and charge the duty-free company and three directors on the grounds that criminal and civil proceedings differ.