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[1978] Part 3 Case 13 [HC,S'pore] |
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www.ipsofactoJ.com/archive/index.htm
[1978] Part 3 Case 13 [HC,S'pore] |
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HIGH COURT OF SINGAPORE |
Howe
- vs -
The Chief Assessor of Property Tax
Corum AP RAJAH J |
27 MARCH 1978 |
Judgment
AP Rajah J
This is an appeal from an order of the Valuation Review Board, made on 10 December 1975, in Valuation Review Board Appeal No 80 of 1974 raising the annual value of a piece of vacant land known as TS 27 Lot No 61 at Peck Hay Road, Singapore, from $1,340 to $26,000. A short history of this property may be of interest.
On 27 October 1951, one Lim Chong Pang and Lim Chong Min, administrators of the estate of Wee Peck Hay, the widow of Lim Nee Soon, sold the property to one Oh Moh See for the sum of $26,775. Its annual value was then fixed at $1,340 which, to the nearest figure, is 5% of the sale price.
On 20 November 1960, Oh Moh See sold the property to one Howe Min Cheng and another who purchased it as tenants-in-common in equal shares for $20,000. No steps were taken either by the Chief Assessor or by the owners to reassess the annual value, even though the sale price of the property had been reduced by about 25 percent. If the annual value had been fixed on the then sale price it would have been $1,000.
On 4 April 1973, there was a transfer by Howe Min Cheng of the one undivided equal half-share standing in his name to the appellant. The deed of transfer was duly stamped at $10 as a deed on which no consideration had passed, the Commissioner of Stamps having made all necessary inquiries and having satisfied himself that no beneficial interest passed thereunder and that only a bare legal estate passed from the transferor to the transferee, the appellant.
A notice of transfer by the transferor of the said one was undivided equal half-share dated 29 June 1973, was sent to the Chief Assessor in the normal way. The Chief Assessor thereupon served a notice dated 1 October 1973, on the co-owners under s 18(2) of the Property Tax Act (Cap 144, 1970 Ed) (the Act) to amend the Valuation List by increasing the annual value of the said property from $1,340 to $26,000 with effect from 4 April 1973. The appellant objected to such amendment and gave notice of such objection to the Chief Assessor. The Chief Assessor turned down the objection and the appellant thereupon appealed on 29 March 1974, under s 18(4) of the Act to the Valuation Review Board.
A report purporting to be from the Chief Assessor under s 28(1) of the Act dated 1 November 1974, was sent to the Valuation Review Board. Under this section the Chief Assessor ‘shall .... submit to the Board a report setting out the facts of the case, together with his recommendations, if any, for revision of the annual value.’ All that the report is statutorily required to set out is:
the facts of the case, and
his recommendations, if any.
However, it will be noticed that the Chief Assessor in his report, which was marked ‘Confidential’, set out his basis of assessment, comparisons and his submission and that this is something more than what he was statutorily obliged to do.
Under the Act the Chief Assessor is not called upon to give a copy of the report to the taxpayer. It would seem, therefore, more particularly as it is marked ‘Confidential’, that it is a document intended for the sole use and convenience of the Board.
The appeal came on for hearing before the Valuation Review Board on 10 December 1975. The appellant’s valuer gave sworn evidence on which he was cross-examined. The Chief Assessor himself gave no evidence nor did he call anyone to give evidence on his behalf.
The Valuation Review Board in its Oral Grounds of Decision, dated 10 December 1975 did not accept the evidence of the appellant’s valuer and went on to say:
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That being so we are then left with the only other valuation that has been made, and that is by the Chief Assessor’s representative, Mr. Chong Koi Chim, and that is set out in the Report to the Board. |
Having rejected the evidence of the appellant’s valuer, the Board then relied upon the valuation of a Mr. Chong Koi Chim (who had signed the report for the Chief Assessor without giving his designation or status) and dismissed the appeal. Acting on the recommendation of the Chief Valuer, set out in the report, the Board confirmed as from 4 April 1973, the annual value for the property for the year 1973 as at $26,000. In my view the basis of assessment, comparisons and the submission were not evidence before the Board and should not have been treated as such. Therefore, once the Board had rejected the evidence of the appellant’s valuer there was no other valuation before it, for the simple reason that the Chief Assessor had not called any evidence on it.
Further, the Board having conducted the case in the way it did, that is to say by taking sworn evidence of the valuer of the taxpayer on which he was cross-examined by the Chief Assessor, the Chief Assessor or his representative should also have given sworn evidence on the valuation of the subject property, on which he could then have been cross-examined by the appellant. If the Chief Assessor or his representative chose not to give evidence on oath, the Board should then have drawn the proper inferences.
It is axiomatic in our system of jurisprudence that the taxpayer should be given the same opportunity of cross-examining the Chief Assessor or his representative as he has of cross-examining the valuer of the taxpayer. In my view, the procedure adopted by the Valuation Review Board in this appeal was wrong. The principles of natural justice should have been observed and full adherence given to them. The Valuation Review Board is a tribunal exercising judicial functions and it is neither fair nor just that the taxpayer be subjected to cross-examination on oath while on the other hand the Board accepts the Chief Assessor’s basis of assessment and submission set out in the report, on which he has not been tested by cross-examination, and his statements on valuation from across the Bar Table.
Against the decision of the Valuation Review Board the appellant now appeals to the High Court, by way of originating motion. On 6 January 1978, the appellant served on the Chief Assessor a subpoena to produce in the High Court the valuation lists from 1960 to 1975, the free inspection of which was being denied to him.
On 10 January 1978, the Chief Assessor applied to the High Court to have the subpoena set aside or varied on the ground that the issue of such a writ is:
oppressive and vexatious, and
an abuse of the process of the court.
I have read with interest the affidavits filed in the application and the exhibits therein referred to. I think it a great pity that this kind of controversy could develop between the Assessor’s Department and a taxpayer, the tax on whose property is being put up by the Chief Assessor and on which he has documentation which the taxpayer wishes to inspect for the purposes of his appeal.
In para 3 of the affidavit of Mr. James Chia filed on 10 January 1978, he states (inter alia):
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On 30 December 1977, I replied to Mr. P Selvadurai stating that his request for inspection of the properties in the Valuation Lists for the years 1960 to 1975 could be met on payment of the required fees, as governed by the Property Tax (Fees) Regulations, 1961, as amended .... |
From the statement of Mr. James Chia, it would appear that the question of inspection turned on whether the appellant was willing to pay a fee of $20 per inspection per property.
The upshot of the matter was that the appellant had to seek the help of the High Court to get the evidence which he thought necessary to prosecute his appeal. If the Assessor had perhaps been a little less dogmatic and had read his Property Tax (Fees) Regulations, 1975 perhaps a little more dispassionately, I think he might, as indeed I think he should, have acceded to the request of the appellant for inspection without the payment of any fee whatsoever.
It therefore becomes necessary to examine these regulations on which the Chief Assessor was relying to deny the taxpayer free inspection of the valuation lists. The Property Tax (Fees) Regulations 1975 reads as follows:
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THE PROPERTY TAX ACT (CH 144) THE PROPERTY TAX (FEES) REGULATIONS 1975 In exercise of the powers conferred by s 63 of the Property Tax Act the Minister for Finance hereby makes the following Notification:
THE SCHEDULE
Made this 23rd day of December 1975. |
Reading reg 2 with (a) in the schedule, it appears to me that what attracts a fee of $20 is the providing of a written or verbal information on one or more of the listed items by the Assessor’s department to a member of the public. The schedule says nothing about fees for ‘inspections’. What the appellant in the instant case was asking of the Chief Assessor was not for ‘written or verbal information’. He was merely asking for an inspection of some of the valuation lists. To state the obvious, an inspection by a taxpayer is quite different to written or verbal information supplied by the Chief Assessor on request. The Chief Assessor, in my view, should have acceded to the appellant’s request not only because there was nothing in the said regulations which permitted him to demand a fee of $20 for inspection but also because the whole tenor of the said Act is such that when there are such disputes between the taxpayer and his department as to annual values the former should be given inspection of the documents concerned.
This, of course, raises the larger and more important question of whether the minister himself had the powers to frame regulations as to fees under s 63 of the Act. He declares that he has framed the said regulations in exercise of the powers conferred on him by s 63 of the Property Tax Act. It therefore becomes necessary to examine s 63 of the Act which reads:
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(1) |
The Minister may make regulations—
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(2) |
The Minister may in lieu of making any regulation prescribing the forms which by this Act are required to be or may be prescribed, authorise the Comptroller to prescribe such forms as the Comptroller thinks fit. |
For this purpose it is s 63(1)(a), (b), (c), (d) and (e) that one need concern oneself with.
When the attention of Mr. James Chia, counsel for the Chief Assessor, had been drawn to this matter and when he addressed the court on it, he gave it as his considered view that he was relying not on s 63 of the Property Tax Act to justify these regulations but on s 47(1) of the Interpretation Act (Cap 3, 1970 Ed), which reads:
Whenever any act requires to be done or a service performed by a public body, statutory authority or a public officer under or in connection with any written law, and no special provision is made thereby or thereunder for making a charge in respect of such act or service, the Minister may, by order published in the Gazette, provide for the imposition of such fees or charges as he may consider proper.
I have every sympathy for Mr. James Chia for he is in a very difficult situation here. The minister in this matter exercised his powers under s 63 of the Act; if he had wished to exercise his powers under the Interpretation Act he should have said so in his declaration, which he did not. He has exercised his powers only under s 63 of the Act and s 63, as can be seen from a plain reading of it, gives him no power to levy fees. He has, therefore in my judgment, acted ultra vires the Act, and the Property Tax (Fees) Regulations, 1975 are null and void and of no effect. I am supported in my view by s 4(1) of the Act which reads:
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The Comptroller shall be responsible generally for the carrying out of the provisions of this Act and for the collection of properly tax and shall pay all amounts collected in respect thereof into the consolidated fund. |
This section empowers the Comptroller to collect property tax and obliges him to pay all such sums into the consolidated fund. It will be noted that s 4(1) does not call upon the Comptroller to collect any fees to be levied by the minister under the Act or any other Act. If it is contended that the Comptroller has power under the said Act to collect these fees, what does he do with such fees? The Act places no obligation on him to pay them into the consolidated fund. In my view, if the Legislature had intended that fees were to be collected under the Act I cannot imagine that it would not have provided specifically under s 4(1) or some other section of the Act for its destination.
I now come to the application of the Chief Assessor which sought the setting aside or variation of the subpoena on the ground that its issue was oppressive and vexatious and an abuse of the process of the court. It was nothing of the sort. It was a process properly issued and in vindication and furtherance of the rights of the appellant. Its issue has been justified, for on 13 January 1978 a consent order was made whereby the parties agreed that they would come to certain arrangements with regard to the sighting of these valuation lists which the appellant thought, rightly or wrongly, important to his appeal.
I now come to the substance of the appeal. It will be useful at this stage to set out the relevant provisions of s 18 of the Act:
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(1) |
Where it appears that any Valuation List is or has become inaccurate in any material particular, the Chief Assessor may, on the application of any person interested, or otherwise, and in the manner hereinafter provided, amend the Valuation List accordingly. |
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(2) |
When, in pursuance of sub-s (1) of this section, the Chief Assessor considers it desirable that an amendment should be made to any Valuation List he shall give notice thereof to the owner of the property concerned stating what amendment is considered desirable and the date from which it is proposed the amendment shall take effect. |
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(7) |
For the purposes of this section, the Valuation List shall be deemed to be inaccurate in a material particular where—
Provided that any alteration to a Valuation List required for the purpose of correcting any of the matters referred to in paras (a), (b) and (d) of sub-s (2) of s 9 of this Act or for the correction of any clerical or arithmetical error therein, shall not in itself constitute an amendment and may be made at any time. |
It was not in dispute that the ground on which the Chief Assessor had served his notice under s 18(2) was s 18(7)(a)(iii). Counsel for the appellant, Mr. Widdicombe, primarily contended that the notice served by the Chief Assessor under s 18(2) of the Act was invalid for the reason that he had no grounds under s 18(7) of the said Act which enabled him to serve the said notice, and more particularly, that s 18(7)(a)(iii) on its true construction, and on the facts of the case, was not a ground the Chief Assessor could have used for action under s 18(2). He submitted that if I upheld him on this point then that would dispose of the whole appeal. He went on to contend further that, if his first proposition was not sufficient to dispose of the appeal, the 1973 Annual Valuation List, in respect of which the s 18 action had been taken by the Chief Assessor, was in itself invalid for the reason that the preparation of the Annual Valuation List in question is contrary to the provisions of Article 8 of our Constitution, which reads:
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All persons are equal before the law and entitled to the equal protection of the law. |
Section 11 provides for the revision of the current valuation list once a year in the month of August and s 13 provides for amendments thereto and authentication thereof. Further, the Chief Assessor by virtue of s 18 of the Act is enabled to take action from time to time, as he thinks fit, during the life of a current valuation list to amend the annual value of properties in such list which on the grounds set out in s 18(7) warranted amendment.
Mr. Widdicombe’s complaint insofar as this particular notice is concerned is this, that the transfer to his client of the one undivided equal half-share was not a transfer for a consideration but was merely a transfer of the bare legal estate from a trustee vested with such estate (the transferor) to the appellant (the beneficiary) who since November 1960 had had the beneficial interest in such half-share. He urges upon me to construe s 18(7)(a)(iii) of the Act to mean that only in cases where there has been consideration passing does it enable the Chief Assessor to make use of it for action under s 18(2) of the Act. He says that in this transfer to the appellant no consideration passed and that the stamping of the transfer document at $10 proves this.
Further, he urges upon me that, even if consideration did pass for this undivided half-share (which he does not admit), as the other undivided half-share yet remains in the other co-owner — and on this there is no dispute — this fact in itself would operate to take the matter outside the ambit of s 18(7)(a)(iii) of the Act.
I agree with Mr. Widdicombe that the transfer of the undivided half-share to the appellant was a transaction in respect of which no consideration passed and that the said transfer only operated to transfer the bare legal estate to the appellant the beneficial interest having been with him since November 1960.
The Chief Assessor, through his counsel, Mr. Chia, has stated that it was the notice of transfer relating to the transfer of the undivided half-share to the appellant which brought about his action under s 18(2) of the Act.
I accept Mr. Widdicombe’s submissions on ss 18(2) and 18(7)(a)(iii) of the said Act. In my judgment, the Chief Assessor acted outside the scope of the said s 18(7)(a)(iii) and therefore notice no A117324 dated 1 October 1973, is invalid and of no effect and any proceedings stemming from it are null and void. This, in my view, is enough to dispose of this appeal in favour of the appellant.
But I am asked by counsel to say something, about the applicability in Singapore of the case of Ladies’ Hosiery and Underwear Ltd v West Middlesex Assessment Committee [1932] All ER Rep 427 (the Hosiery case), as it would appear that it has now become part of the thinking of the Chief Assessor’s department.
One must therefore examine the facts in the Hosiery case, remembering and keeping in mind always that in England it is the occupier who pays the rates (taxes) while in Singapore it is always the owner who pays property tax. In a very few exceptional cases, owners in England are called upon to pay rates, but here again the basis on which properties are valued and rated is an occupational one.
In the Hosiery case it was admitted by the ratepayers that the subject premises was correctly assessed at £325 according to statute. Their only witness agreed that the rent which might be expected to be obtained for their premises would be ‘at least £325’ upon the terms of a letting from year to year. There was no dispute in the Hosiery case as between the ratepayers and the assessment committee on the question of whether the premises had been correctly assessed for rating purposes. The complaint of the ratepayers was that seven other comparable premises had been assessed at sums below the rents which could have been obtained therefor but they did not object to nor seek to alter the valuation of these seven premises, as indeed they could have done under the Rating and Valuation Act 1925 (but which be it noted is not possible under the Property Tax Act), but proposed to use these valuations as evidence that the proposed valuation of their premises was ‘excessive and unfair’.
In these circumstances, the Court of Appeal decided ‘that the assessing authority should not sacrifice correctness to secure uniformity, but, if possible, obtain uniformity by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error (p 432C)’. It will be noted that the inaccuracies in the seven assessments could not be corrected and so secure a correct uniformity because the ratepayers had given no notice to the seven occupiers and did not ask that their assessments should be corrected, which would have secured uniformity. At p 432I Scrutton LJ says:
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In these circumstances, in my opinion, quarter sessions were not justified in disregarding the uncontroverted evidence that the assessment was a correct statement of the gross value according to the statutory definition, (see 68(1) of the Rating and Valuation Act) and altering it to an incorrect statement in order to secure uniformity in error. |
In the instant case, the annual value of $26,000 recommended by the Chief Assessor was hotly contested by the appellant, whose valuation was very much below that of the Chief Assessor’s. Further, in England there is procedure under the Rating and Valuation Act which a ratepayer can avail himself of, if he feels that other properties similar to his have been under-assessed, whereas in Singapore such procedure is not available to a property taxpayer, and it is not possible for him to serve notices on other taxpayers regarding their particular assessments.
On these two very material points the Hosiery case differs from the instant case and cannot therefore be applied to the facts of the instant case. By this I am not to be taken to mean that in no circumstances could the Hosiery case be applied in Singapore.
For these reasons I allowed the appeal with costs.
Cases
Ladies’ Hosiery and Underwear v West Middlesex Assessment Committee [1932] All ER Rep 427
Legislations
Property Tax Act (Cap 144, 1970 Ed): s. 4, s. 18, s. 63
Property Tax (Fees) Regulations 1975
Representation
DG Widdicombe QC and P Selvadurai (Rodyk & Davidson) for the appellant.
James Chia and G Singh (Inland Revenue) for the respondent.
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