First DCS Pte Ltd v Chief Assessor: Property Tax Assessment & Machinery Exclusion

First DCS Pte Ltd appealed against the Valuation Review Board's decision regarding the property tax assessment of its district cooling plant. The High Court, presided over by Justice Andrew Ang, addressed whether the machinery and pipelines should be included in the property tax assessment under the Property Tax Act. The court allowed the appeal in part, finding that the machinery qualified for exclusion under s 2(2) of the Act, and the pipelines were not assessable, but dismissed the appeal against the use of the contractor's test method.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal allowed in part.

1.3 Case Type

Tax

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal on property tax assessment. The court addressed whether machinery and pipelines should be included in the property tax assessment.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chief AssessorRespondentGovernment AgencyAppeal dismissed in partPartial
Liu Hern Kuan of Inland Revenue Authority of Singapore
Ong Ken Loon of Inland Revenue Authority of Singapore
First DCS Pte LtdAppellantCorporationAppeal allowed in partPartial

3. Judges

Judge NameTitleDelivered Judgment
Andrew AngJudgeYes

4. Counsels

Counsel NameOrganization
Liu Hern KuanInland Revenue Authority of Singapore
Ong Ken LoonInland Revenue Authority of Singapore
Tan Kay KhengWongPartnership
Leung Yew KwongWongPartnership
Teo Lay KhoonWongPartnership

4. Facts

  1. First DCS Pte Ltd is the lessee of Lot A18727, where the subject property is located.
  2. The subject property houses a district cooling plant serving Changi Business Park.
  3. First DCS produces chilled water for air-conditioning needs of other buildings.
  4. The machinery chills water to 4°C and distributes it through a 4km pipeline.
  5. The Chief Assessor included the machinery and pipelines in the property tax assessment.
  6. The Appellant objected to the inclusion of the machinery and pipelines.
  7. The VRB dismissed the Appellant’s appeal.

5. Formal Citations

  1. First DCS Pte Ltd v Chief Assessor and Another, OS 820/2006, [2007] SGHC 82

6. Timeline

DateEvent
Lease commenced between First DCS Pte Ltd and Jurong Town Corporation for 30 years.
Temporary Occupation Permit obtained for the building.
Chief Assessor informed First DCS Pte Ltd of proposed annual value of the subject property.
First DCS Pte Ltd filed a Notice of Objection.
First DCS Pte Ltd filed an appeal to the VRB.
VRB dismissed First DCS Pte Ltd’s appeal.
Grounds of Decision issued by VRB.
Judgment reserved.

7. Legal Issues

  1. Whether machinery located in subject property falling within one or more exclusions provided by s 2(2) Property Tax Act
    • Outcome: The court held that the machinery qualified for exclusion under s 2(2) of the Property Tax Act.
    • Category: Substantive
    • Sub-Issues:
      • Whether water is an article
      • Whether water has been made
      • Whether water has been altered
      • Whether water has been adapted for sale
  2. Whether pipelines extending beyond boundaries of subject property ought to be included in property tax assessment
    • Outcome: The court held that the pipelines outside the boundaries of the Appellant’s property remain not assessable for property tax purposes.
    • Category: Substantive
  3. Whether contractor's test method correct method of assessment
    • Outcome: The court held that the Chief Assessor’s adoption of the contractor’s test method was appropriate.
    • Category: Procedural

8. Remedies Sought

  1. Review of property tax assessment
  2. Exclusion of machinery and pipelines from assessment

9. Cause of Actions

  • Appeal against property tax assessment

10. Practice Areas

  • Tax Assessment
  • Property Valuation

11. Industries

  • Energy
  • Utilities

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
People’s Park Chinatown Development Pte Ltd (in liquidation) v Schindler Lifts (S) Pte LtdHigh CourtYes[1993] 1 SLR 591SingaporeCited as an example of machinery affixed to land for non-manufacturing purposes.
Bancroft v Manchester Assessment Committee and Union Cold Storage CoNot specifiedYes[1931] All ER 242United KingdomCited to define the term 'adapting' in the context of property tax assessment.
Letang v CooperQueen's BenchYes[1965] 1 QB 232United KingdomCited regarding the interpretation of statutes using the maxim noscitur a sociis.
Sedgwick v Camberwell Assessment Committee and Watney, Combe, Reid & CoNot specifiedYes[1931] All ER 242United KingdomCited to support the argument that liquids can be 'finished' for the purposes of property tax assessment.
James Buchanan & Co Ltd v Assessor for GlasgowCourt of SessionYes(1932) SC 358ScotlandCited to support the argument that liquids can be 'finished' for the purposes of property tax assessment.
Chief Assessor & Comptroller of Property Tax v Van Ommeren Terminal (S) Pte LtdHigh CourtYes[1993] 3 SLR 489SingaporeCited to distinguish the case based on the location of pipelines and storage tanks within the boundaries of the subject property.
Pan United Marine Ltd v Chief AssessorHigh CourtYes[2007] SGHC 21SingaporeCited to distinguish the case based on the nature of the dry docks and their attachment to the seabed.
Collector of Land Revenue v Alagappa ChettiarPrivy CouncilYes[1971] 1 MLJ 43MalaysiaCited regarding the intervention of an appellate court in findings of fact made by a lower court.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Property Tax Act (Cap 254, 2005 Rev Ed)Singapore
District Cooling Act (Cap 84A, 2002 Rev Ed)Singapore
Interpretation Act (Cap 1, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • District cooling plant
  • Chilled water
  • Property tax assessment
  • Machinery exclusion
  • Pipelines
  • Contractor's test method
  • Annual value
  • Property Tax Act
  • Valuation Review Board
  • Article
  • Altering
  • Adapting for sale

15.2 Keywords

  • Property tax
  • Machinery
  • Assessment
  • District cooling
  • Singapore
  • Valuation
  • Pipelines

17. Areas of Law

Area NameRelevance Score
Property Tax80
Revenue Law75
Property Law70
Statutory Interpretation65

16. Subjects

  • Property Tax
  • Tax Law
  • Statutory Interpretation