Comptroller of Income Tax v BJM [2013] SGHC 212

28 October 2013

Revenue Law — International Taxation — Double Taxation Agreement Civil Procedure — Stay of Proceedings


On 22 November 2012, the National Tax Agency of Japan (“J-NTA”) issued a letter of request (“the Request”) to the Inland Revenue Authority of Singapore (“IRAS”) pursuant to section 105J of the Income Tax Act (Cap 134, Rev Ed 2008) (“ITA”) and Art 26 of the Agreement between the Government of the Republic of Singapore And the Government of Japan for the Avoidance of Double taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (“Singapore-Japan DTA”) for disclosure of various bank statements from the defendant bank, BJM. This related to on-going tax examinations in Japan in relation to the applicant, a Japanese national, and seven other account-holders.  IRAS reviewed the Request and made an ex parte application to the High Court for the following orders on 19 April 2013:

(a) That BJM produce within 21 days from the date of the Order all bank statements for the period 1 January 2006 through 31 December 2011 (both dates inclusive) in relation to eight accounts held by the account holders listed, including the specified accounts which they named in the summons itself;

(b) That BJM produce copies of the documents named in the summons to IRAS not later than the end of the period of 21 days from the date of the Order;

(c) Subject to the preceding sub-paragraph, no person is to inspect or take a copy of any document relating to these proceedings without leave of the High Court under section 105J(9) of the ITA; and

(d) That the Order shall have effect and remain in force until such Order is varied or discharged.

In the accompanying affidavit, IRAS set out the grounds of its application, exhibited the Request, and stated its belief that the Request set out all the information prescribed in the Eighth Schedule of the ITA and that the conditions specified in section 105J(3) were fulfilled.

IRAS also served BJM with notice of the application on 15 April 2013.

The Counsel for the applicant and IRAS appeared before the High Court four times in May 2013. The Counsel for the applicant submitted, inter alia, that the request was invalid as it was made pursuant to a tax examination and not investigations into tax evasion. The Counsel for the applicant also argued that the relevant tax authority in Japan had withdrawn its investigations into the applicant and that the J-NTA had no right to make the request in the first place as under Japanese law, the applicant would have no obligation to disclose equivalent information in Japan.

On 31 May 2013, the High Court granted the application (“the 31st May order”) on the following grounds:

  • The responsibility for determining whether a request for information is valid is primarily IRAS’s. The role of the Singapore Court is to be satisfied that the affidavit filed by the plaintiff in support of the application has complied with the ITA, and in particular, the Eighth Schedule. It is not the Court’s function and neither is it within the Singapore Court’s jurisdiction or competence to adjudicate on the purely domestic issues in the Japanese jurisdiction. In this case, the IRAS had stated its opinion that the Request was justified and valid (i.e. it was not a fishing expedition). The Court was also satisfied that the Request complied with the Eighth Schedule. In addition, it is not the place of the Singapore High Court to enquire into the propriety of the J-NTA request under Japanese law. Instead, Japan is the proper forum for determining whether the J-NTA request was proper.
  • The submission by the Counsel for the applicant that the Request pertained to a tax examination and not an investigation of tax evasion was, with respect, not a relevant consideration in determining whether to grant the application. There is nothing in the Eighth Schedule that suggests that a disclosure of the information requested is only permitted when there is an investigation into tax evasion. Different countries will have different mechanisms for investigating tax evasion. Information will be required at different stages. The Eighth Schedule requires a statement that the request is in conformity with the law and administrative practices of the country of the competent authority. The content of that statement will vary depending on the law and administrative practices of the country in question. There was such a statement in this case. The J-NTA made clear that the Request was for the purpose of potential tax evasions as the accounts requested for were under the control of the applicant’s family or companies controlled by the applicant’s family and were suspected of being used to hide undeclared income. This fulfils the requirements in the Eighth Schedule as well as the requirement of foreseeable relevance in Comptroller of Income Tax v AZP [2012] SGHC 112. Therefore, the argument about the stage of investigation was not persuasive.
  • The Counsel for the applicant did not produce any proof that the J-NTA had withdrawn its investigation into the applicant despite the fact that he had almost a month to ascertain this information with J-NTA. If it were the case that the information was no longer required, it would fall to J-NTA to withdraw the Request but IRAS had no information from J-NTA about this.

On 20 September 2013, the applicant filed a complaint against J-NTA in Japan.  Following this, the Counsel for the applicant filed a Summons No. 5041 of 2013 (“SUM 5041”) on 25 September 2013 to stay or discharge the 31st May order pending a determination of the issues of Japanese law before the Tokyo District Court.


Whether there are grounds to:

(a)    grant the application by the Counsel for the applicant for stay or discharge of the 31st May order pending a determination of the issues of Japanese law before the Tokyo District Court; and

(b)    permit the other account holders to intervene this suit.


The 31st May order stands and the application in SUM 5041 to stay or discharge the 31st May order is dismissed.  Summon Nos. 3108 to 3113 of 2013, relating to the application by the other account holders to intervene this suit were also dismissed.

The above decision was made based on the following:

(a)     The application to stay or discharge the 31st May order was characterised as a conflicts of law issue requiring resolution by the Japanese courts. This is, however, not an accurate characterisation as there is no pending suit in Singapore and no legal issue of Singapore law to be determined. The only issue of law to be determined is Japanese law. Thus, there are no grounds for stay of the 31st May order under common law conflicts of law principles.

(b)     There is no statutory basis from granting a stay or discharge of the 31st May order. The reasons for granting the 31st May order have been set out. But the Counsel for the applicant has not raised any points in SUM 5041 which he had not already made and which the Court had not already considered when making the 31st May order. As such, there are no grounds to discharge the order to make any variation to that order.

(c)     In light of the above, there are also no grounds to permit the other account holders to intervene. The accounts in question belong either to the applicant’s wife or to companies controlled by the applicant and his family. Their interests have been adequately represented by the applicant and the Counsel. There are no separate matters specific to the other account-holders which would affect the facts in this case and the decision of the Court.

The above judgement was delivered on 17 October 2013.