Tropical Properties & Trading Pte Ltd v Suganung Tasani

• Jurisdiction: Singapore
• Judgment Date: 28 December 1995
• Date: 28 December 1995
• Docket Number: Originating Summons No 1033 of 1994
• Court: High Court (Singapore)

Tropical Properties & Trading Pte Ltd

Plaintiff

and

Suganung Tasani

Defendant

[1995] SGHC 293

T S Sinnathuray J

Originating Summons No 1033 of 1994

High Court

Revenue Law–Goods and Services Tax–Tax not included in purchase price of property–Claim for GST after completion of transaction–Whether purchaser liable–Sections 8 (1), 8 (2), 8 (3), 11 (2) (b), 40, Second and Fourth Schedules Goods and Services Tax Act (Cap 117A, 1994 Rev Ed)

The plaintiff granted to the defendant an option to purchase a certain commercial property. After the defendant exercised the option on 17 March 1994, but before completion of the transaction on 9 June 1994, the Goods and Services Tax Act (Cap 117A, 1994 Rev Ed) (“the Act”) came into force. The option did not provide for payment of goods and services tax (“GST”), and the parties overlooked the GST payable and did not take it into account. After completion, the plaintiff discovered the oversight and wrote a letter dated 1 July 1994 to the defendant demanding payment of additional sums for GST. When the defendant refused to pay the GST, the plaintiff applied to the court to determine the defendant's GST liability. The salient issue before the court was whether the transaction was subject to GST and if so whether the defendant was liable to the plaintiff for the sum claimed as GST payable. The plaintiff contended that s 40 of the Act entitled it to add the amount of GST payable onto the purchase price as of right, unless there was an agreement to the contrary.

Held, dismissing the plaintiff's claim:

(1) The sale of a commercial property was clearly a taxable supply within the meaning of the Act as defined in the Second Schedule, and was not an exempt supply as it did not fall within the ambit of the Fourth Schedule. Accordingly, GST was due at the date of completion, pursuant to s 11 (2) (b) of the Act: at [6].

(2) Section 40 of the Act did not automatically transfer the burden of GST from the supplier to the supplied. The supplier had to make an election whether to add the GST to the price of the goods or services supplied: at [9].

(3) It could not have been the intention of Parliament that s 40 of the Act should allow the supplier an indefinite period of time to decide whether to add GST to the purchase price, all the more so, to request the purchaser to pay GST on a transaction after it had been completed. As the plaintiff had failed to inform the defendant that it would be adding GST to the purchase price before the transaction was concluded, it was not entitled to claim payment of GST from the defendant: at [15].

American Commerce Co (Ltd) v Frederick Boehm (Ltd) (1919) 35 TLR 224 (distd)

Conway Brothers & Savage v Mulhern & Co (Ltd) (1901) 17 TLR 730 (distd)

Corn Products Co Ltd v J S Fry & Sons [1917] WN 224 (distd)

Haig v Napier (1813) 1 Dow PC 255; 3 ER 691 (distd)

Love v Norman Wright (Builders) Ltd [1944] KB 484; [1944] 1 All ER 618 (folld)

Goods and Services Tax Act (Cap 117A, 1994Rev Ed)ss 8 (1), 8 (2), 8 (3), 11 (2) (b), 40, Second Schedule,Fourth Schedule (consd)

Finance Act 1901 (c 7) (UK)s 10 (1)

Steven Lim Kim Chua and M Leong (Chan Tan & Pnrs) for the plaintiff

Arthur Quay Kok Boon (J Y P Chia & Co) for the defendant.

T S Sinnathuray J

1 This is an application for a declaration that the defendant pay the plaintiffs the goods and services tax (“GST”) payable on a property transaction in which the plaintiffs were the vendors and the defendant the purchaser.

The facts

2 On 3 March 1994, the plaintiffs granted an option (“the option”) to purchase a property known as 10 Anson Road #13-16 International Plaza, Singapore (“the...