how is it running tax, if let say TS compute, file and pay his business tax accordingly

You can also declare less with a business current account. Nothing to do with tax evasion. Besides banks are not supposed to investigate tax evasion - that's the job of LHDN. The most they can do is to report to them.

That's a BS excuse. They just want your money because business accounts usually come with hefty fees

In some countries this has consequences. Not sure about malaysia.