Lee Tat Development (Pte) Ltd v Chief Assessor

• Jurisdiction: Singapore
• Judgment Date: 01 August 1995
• Date: 01 August 1995
• Docket Number: Originating Motions Nos 55 and 56 of 1994
• Court: High Court (Singapore)

Lee Tat Development (Pte) Ltd

Plaintiff

and

Chief Assessor

Defendant

[1995] SGHC 187

Chao Hick Tin J

Originating Motions Nos 55 and 56 of 1994

High Court

Revenue Law–Property tax–Annual value–Assessment of–Whether Chief Assessor having discretion to evaluate based on 5% value of property or constrained by restriction that such basis only applicable if impossible or impractical to adopt hypothetical rental basis–Section 2 (b) Property Tax Act (Cap 254, 1985 Rev Ed)–Revenue Law–Property tax–Notice–Property owner alleging valuation objection and appeal proceedings void because it did not receive notice–Purpose of notice–Whether failure to give notice renders subsequent proceedings void–Section 20 (2) Property Tax Act (Cap 254, 1985 Rev Ed)

The Chief Assessor had evaluated the annual value of a property belonging to the appellant, after a series of objections and amendments, at $1,740,000 with effect from 1 January 1990, and $1,838,000 with effect from 1 January 1991 on the basis that both were regarded as land. These figures were based on the annual interest at 5% of the estimated value of the property, as provided under s 2 (b) of the Property Tax Act (Cap 254, 1985 Rev Ed) (“the Act”). The appellant submitted that the Chief Assessor was wrong to assess annual value on the 5% basis, and that s 2 prescribed that in the first instance, the annual value should be assessed on the expected reasonable rental and that the Chief Assessor could only assess the annual value of the property at 5% of its estimated value where it was not possible or practical to rent the property. As a preliminary point, the appellant argued that as it did not receive service of the Chief Assessor's first notice to revalue the property, all subsequent proceedings were void and of no effect. The appellant had come to know of the amendments when it received a subsequent notice of demand for payment of property tax based on the amended annual value. The Valuation Review Board upheld the Chief Assessor's dismissal of the appellant's objections. The appellant appealed.

Held, dismissing the appeal:

(1) It was not necessary to require explicit proof of every fact and certain facts may be inferred from primary facts that were not in dispute. On the evidence available, the Board's inference that the notice of assessment addressed to the appellants had been posted was a reasonable one and should be upheld. In any event, the purpose of the Chief Assessor being required to give notice of the proposed amendment to the property owner under s 20 (2) the Act was to enable the property owner to object and be heard. As the appellant was aware of the proposed amendments and had been granted an extension of time to file its objections, the Act had been complied with: at [14] and [15].

(2) While ordinarily the method of determining annual value should be based on the expected rental as set out in the primary definition in s 2 of the Act, on a true construction of s 2 (b), the Chief Assessor had the sole discretion to decide the method of valuation taken. It was not possible to read into s 2 the restriction that validation based on 5% of the estimated value of the land could only be resorted to if it was impossible or impractical to adopt the hypothetical rental basis. In any case, this construction was consistent with the purpose and object of the provision intended by Parliament: at [19], [22], [23] and [25].

[Observation: There were grounds for the Chief Assessor to take 5% of the estimated value of the property as a basis for arriving at the annual value. The property was capable of being rented out but it was clear that there was no intention of renting out the property: at [26].]

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

Tan Kia Poh v Hong Leong Finance Ltd [1993] 3 SLR (R) 429; [1994] 1 SLR 270 (distd)

Interpretation Act (Cap 1,1985Rev Ed)ss 2 (4), 9 (A),9 (3)

Property Tax Act (Cap 254,1985Rev Ed)ss 2 (b),20 (2) (consd);ss 20 (1),20 (3),57 (1)

C S Wu and Jimmy Yap (Donaldson & Burkinshaw) for the appellant

Leung Yew Kwong and Tham Siok Peng (Inland Revenue Authority of Singapore) for the respondent.

Judgment reserved.

Chao Hick Tin J

1 These are two appeals against the decisions of the Valuation Review Board which upheld the Chief Assessor's dismissal of the appellants' objections to two valuation notices issued by the Chief Assessor under s 20 of the Property Tax Act (Cap 254) (“the Act”).

2 The matter in respect of which the appeals arose concerns two adjacent properties, Lot 111-32, measuring 27,866 sq ft, and Lot 111-33, measuring 101,435 sq ft, both of which are located in TS21 and are zoned residential. A house bearing address No 7 Grange Road (“house No 7”) stands on Lot 111-32 and two houses Nos 23-1 (“house No 23-1”) and 25 (“house No 25”) Grange Road stand on Lot 111-33. The appellants bought the two properties in 1973. All the three houses were then rent-controlled. In 1976 the tenant of house No 25 vacated the premises and in 1981 the tenant of house No 23-1 did likewise. Therefore, by 1981, both houses which stood on Lot 111-33 ceased to be rent-controlled. Since then they have been occupied rent-free by the appellants' gardener and watchman and their families. In the case of Lot 111-32, the house No 7 has to-date remained occupied and rent-controlled.

3 As at 1 January 1990 the annual value of house No 7 was assessed at $1,267, house No 23-1 at $1,900 and house No 25 at $8,250. These assessments were based on the rents payable by the tenants (in...