Bollywood Veggies Pte Ltd v Chief Assessor

• Jurisdiction: Singapore
• Judge: Aedit Abdullah J
• Judgment Date: 15 October 2021
• Court: High Court (Singapore)
• Docket Number: Tax Appeal No 15 of 2020

Bollywood Veggies Pte Ltd

and

Chief Assessor

[2021] SGHC 233

Aedit Abdullah J

Tax Appeal No 15 of 2020

General Division of the High Court

Revenue Law — Property tax — Annual value — Whether Chief Assessor erred in using building costs as proxy for estimated value of buildings in assessment of annual value — Section 2(3)(a) Property Tax Act (Cap 254, 2005 Rev Ed)

Revenue Law — Property tax — Appeals — Standard of review — Whether standards of Wednesbury unreasonableness applicable — Section 35(1) Property Tax Act (Cap 254, 2005 Rev Ed)

Held, dismissing the appeal:

(1) An appeal to the General Division of the High Court from a decision of the VRB constituted a rehearing, as provided in s 35 of the PTA. The appellate court could enquire into whether the Chief Assessor had been fair and reasonable in his determination of the AV of a property. As the appeal was concerned with the merits, as seen from s 20A of the PTA, it was also not appropriate to apply the judicial review standard of Wednesbury unreasonableness (Associated Provincial Picture Houses, Ltd v Wednesbury Corp[1948] 1 KB 223). That being said, appellate review of the decision of the VRB was not a full rehearing on the merits, and deference was extended in respect of its findings of fact: at [21], [25] and [29] to [31].

(2) The burden of proof lay on the appellant to show that the Chief Assessor was wrong, and that legal burden did not shift: at [32].

(3) A prohibition against renting out a property, as in the present case where the lease with the SLA prevented the appellant from subletting the Property without its approval, did not prevent the Chief Assessor from ascribing value to a property under s 2(1), much less s 2(3)(a) of the PTA. The inquiry into the AV of a property was a “primarily economic” one into the real value of the property, the test being whether the occupation under the hypothetical tenancy was such as to be of value. It was no impediment that the actual occupier was the only possible tenant. The statutory scheme and case law also did not support the proposition of the appellant that s 2(3)(a) of the PTA should be read subject to the definition of AV in s 2(1). Section 2(3) of the PTA incorporated an alternative definition which was not based on rental but 5% of the value of the property. It was clear from the language of s 2(3) of the PTA which referred to the option of the Chief Assessor that he had the sole discretion of when the provision was to apply and in which circumstances it was appropriate: at [18], [19], [39] to [41] and [43].

(4) The Chief Assessor's assessment of the AV of the Property should not be disturbed. The connection between building costs and the value of a property was readily apparent. The information from the architect on the building costs could also be relied on by the Chief Assessor in his determination of the AV of the Property. The appellant neither disputed the authenticity or genuineness of the e-mail nor the accuracy of the figure provided by the architect. The hearsay rule was also not offended, as the use of the e-mail in the proceedings before the VRB was simply to show that this was the information used by the Chief Assessor. The fact that the information from the architect was retracted subsequently did not by itself mean that it could not be used, particularly in the absence of any explanation. Such information was well within his power to obtain under s 16(1) of the PTA: at [48], [54], [61] and [62].

(5) A valuation report of the market land rent of the Property which was submitted by the appellant did not demonstrate that a different AV for the buildings should be used. The report had put forward a value without the buildings and was therefore not a useful comparator against what the Chief Assessor did. The interpretations by the appellant that the valuation in the report did include the value of the buildings or that the said value was negligible should have been put to the Chief Assessor's representative in the proceedings before the VRB, and the appellant was precluded from raising these points pursuant to the rule in Browne v Dunn(1893) 6 R 67. The fact that the appellant benefitted from a lower AV from the Chief Assessor's decision to use the building costs only in respect of a portion of the buildings on the Property indicated that his decision to use the figure of $593,000 was appropriate: at [59], [60] and [63].

Case(s) referred to

Associated Provincial Picture Houses, Ltd v Wednesbury Corp [1948] 1 KB 223 (refd)

Bata Shoe Co Ltd v Chief Assessor [1959–86] SPTC 71 (refd)

Britestone Pte Ltd v Smith & Associates Far East, Ltd [2007] 4 SLR(R) 855; [2007] 4 SLR 855 (refd)

Browne v Dunn (1893) 6 R 67 (folld)

Chief Assessor v Glengary Pte Ltd [2013] 3 SLR 339 (folld)

Chief Assessor v National Shipbreakers Pte Ltd [1979–1980] SLR(R) 623; [1980–1981] SLR 352 (folld)

Cho Chih Yee v Chief Assessor [1968] 2 MLJ xxxii (refd)

City Developments Ltd v Chief Assessor [2008] 2 SLR(R) 397; [2008] 2 SLR 397, HC (refd)

City Developments Ltd v Chief Assessor [2008] 4 SLR(R) 150; [2008] 4 SLR 150, CA (refd)

City Developments Ltd v Chief Assessor [2021] SGVRB 3 (refd)

Comptroller of Income Tax v AQQ [2014] 2 SLR 847 (folld)

F R Evans (Leeds) Ltd v English Electric Co Ltd [1978] 1 EGLR 93 (refd)

FC Retail Trustee Pte Ltd v Chief Assessor [2021] SGVRB 2 (refd)

First DCS Pte Ltd v Chief Assessor [2007] 3 SLR(R) 326; [2007] 3 SLR 326 (refd)

Hewitt (Valuation Officer) v Telereal Trillium [2016] UKUT 258 (LC) (refd)

Hoare (Valuation Officer) v National Trust [1998] RA 391 (refd)

HSBC Institutional Trust Services (Singapore) Ltd v Chief Assessor [2013] 2 SLR 173, CA (refd)

HSBC Institutional Trust Services (Singapore) Ltd v Chief Assessor [2020] 1 SLR 621, CA (refd)

HSBC Institutional Trust Services (Singapore) Ltd v Chief Assessor [2020] 3 SLR 510, HC (folld)

HSBC Trustee (Singapore) Ltd v Chief Assessor and Comptroller of Property Tax [2018] SGVRB 2 (refd)

Jeyaretnam Kenneth Andrew v AG [2014] 1 SLR 345 (refd)

Lambeth London Borough v English Property Corp Ltd and Shepherd (Valuation Officer) [1980] RA 279 (refd)

Lee Tat Development (Pte) Ltd v Chief Assessor [1995] 2 SLR(R) 785; [1995] 3 SLR 855 (folld)

London County Council, The v The Churchwardens and Overseers of the Poor of the Parish of Erith in the County of Kent, and the Assessment Committee of the Dartford Union [1893] AC 562 (refd)

MCST Plans Nos 1298 and 1304 v Chief Assessor [2006] 1 SLR(R) 465; [2006] 1 SLR 465 (refd)

Orion-One Development Pte Ltd v MCST Plan No 3556 [2019] 2 SLR 793 (refd)

Poh Hee Construction Pte Ltd v Chief Assessor (1992) 1 MSTC 5100 (refd)

Robinson Brothers (Brewers), Ltd v Assessment Committee for the No 7 or Houghton and Chester-le-Street Area of the County of Durham [1937] 2 KB 445 (refd)

Saga Foodstuffs Manufacturing (Pte) Ltd v Best Food Pte Ltd [1994] 3 SLR(R) 1013; [1995] 1 SLR 739 (folld)

Soon Peck Wah v Woon Che Chye [1997] 3 SLR(R) 430; [1998] 1 SLR 234 (refd)

Tan Seet Eng v AG [2016] 1 SLR 779 (refd)

Telereal Trillium v Hewitt (Valuation Officer) [2019] UKSC 23 (refd)

The Legends Fort Canning Park Pte Ltd v Chief Assessor [2015] SGVRB 1 (refd)

Valentino Globe BV v Pacific Rim Industries Inc [2009] 4 SLR(R) 577; [2009] 4 SLR 577 (refd)

Facts

The appellant operated a property comprising of a vegetable farm and various buildings (“the Property”). The land was on a lease from the Singapore Land Authority (“SLA”). On 1 December 2018, the Chief Assessor notified the appellant that the annual value (“AV”) for the Property was amended from $87,000 to $107,000, in accordance with s 20(1) of the Property Tax Act (Cap 254, 2005 Rev Ed) (“PTA”). The AV was assessed pursuant to s 2(3)(a) of the PTA, which provided that the Chief Assessor had the option of assessing 5% of the estimated value of a property as its AV. The Chief Assessor's representative had taken the annual rent payable by the appellant to the SLA as representative of the AV for the land. As there was no evidence of the rental value of the buildings, the Chief Assessor's representative adopted the figure of 5% of the total building costs which had been provided as $593,000 on 25 October 2010, or $29,650. The appellant appealed to the Valuation Review Board (“VRB”) against the Chief Assessor's amendment of the AV of the Property arguing, amongst other things, that the building costs should not be included in assessing AV. The VRB dismissed the appeal. The appellant then appealed against the decision of the VRB.

The appellant argued that the figure of $593,000 relied on by the Chief Assessor as building costs was unreliable. It had been provided to the Inland Revenue Authority of Singapore (“IRAS”) in an e-mail on 25 October 2010 from the architect for certain alteration and addition works at the Property in respect of the total costs of those works, which were completed on 31 March 2009. However, the architect subsequently informed IRAS that, as instructed by the appellant, IRAS should write directly to the appellant on such matters, and IRAS should treat its submission as void. It was submitted that the figure was therefore hearsay and should not be included in an assessment of AV. Alternatively, no weight should be given to the figure since there was no nexus between building costs in 2009 and the estimated value of a property in 2018. The appellant argued that on a proper interpretation of s 2(3)(a) of the PTA and case law, the buildings on the Property should be excluded from computation, as the evidence was clear the buildings could not be let and could not reasonably be let.

The respondent argued that although the appellate court had discretion to consider the entire evidence before it, that did not mean the appellate court was to determine the substantive merits afresh. Further, on findings of fact, the question to answer would be whether no reasonable body of members constituting the VRB could have arrived...