SINGAPORE CEMENT MANUFACTURING COMPANY (PRIVATE) LIMITED v COMPTROLLER OF INCOME TAX

"For the above-mentioned reasons, I am of the view that the Board was not wrong to find that the Silo is a building and not a plant." — Per Choo Han Teck J, Para 20

Case Information

• Citation: [2023] SGHC 57 (Para 0)
• Court: General Division of the High Court of the Republic of Singapore (Para 0)
• Case Number: Tax Appeal No 10 of 2022 (Para 0)
• Date of Judgment: 1 March 2023; judgment reserved on 10 March 2023 (Para 0)
• Coram: Choo Han Teck J (Para 0)
• Counsel for the Appellant: Vikna Rajah and Koh Chon Kiat, Rajah & Tann Singapore LLP (Para 21)
• Counsel for the Respondent: Bjorn Lee Long Jin and Timothy Tan Ding Yuan, Inland Revenue Authority of Singapore (Law Division) (Para 21)
• Area of Law: Revenue Law — Income taxation — Capital allowance (Para 0)
• Judgment Length: Not answerable from the extraction (not stated in the provided material)

Summary

This was an appeal by Singapore Cement Manufacturing Pte Ltd against the Income Tax Board of Review’s conclusion that its cement silo was a building, not a plant, for the purposes of accelerated capital allowance under s 19A of the Income Tax Act. The High Court framed the central question as whether the Board was correct in characterising the Silo as a building rather than a plant, and approached the issue as one of fact and degree informed by the Singapore authorities on the plant/building distinction. (Para 1) (Para 8) (Para 10)

The appellant had constructed the Silo in 2013 to support increased demand for Portland fly-ash cement, and the Silo was described as a large cylindrical structure with a storage section and a dispensing section. The Comptroller allowed capital allowances for the equipment inside the Silo, but disallowed them for the structural and housing components, including the walls, inverted cone, top house, pigeon house, blower room, and control room. The court accepted that the equipment could be treated separately, but held that the disputed structural assets were properly characterised as building assets. (Para 1) (Para 3) (Para 6) (Para 15)

The judge rejected the appellant’s reliance on foreign authorities such as Schofield, Barclay Curle, and Waitaki International, explaining that those cases were of limited assistance because Singapore law treats plant and building as mutually exclusive categories. The court also rejected the argument that the Silo had to be treated as an indivisible whole, holding that s 19A did not prevent the Comptroller from classifying parts of the Silo separately for tax purposes. The appeal was dismissed, and costs were left to be dealt with later if the parties could not agree. (Para 11) (Para 12) (Para 14) (Para 15) (Para 20) (Para 21)

Why did the court say the Silo was a building and not a plant?

The court began from the proposition that the dispute was not about whether the Silo was useful, specialised, or integral to the appellant’s business. Rather, the legal question was whether, applying Singapore’s plant-versus-building framework, the Silo fell on the building side of the line. The judge emphasised that the Board had heard the parties, visited the Silo, and then found for the Comptroller; on appeal, the appellant had to show that the Board’s factual conclusion was unreasonable. (Para 8) (Para 10)

"The central issue in this appeal was whether the Board was correct in finding that the Silo was a building as opposed to a plant." — Per Choo Han Teck J, Para 8

The court’s reasoning turned on the function of the disputed assets once the equipment already allowed for capital allowance was excluded. The judge stated that, excluding the equipment, the function of the disputed assets was storage and housing. That characterisation mattered because the court considered storage and housing to be building-like functions, even if the structure was purpose-built and industrial in scale. The fact that the Silo was purpose-designed for cement handling did not, by itself, convert the structural components into plant. (Para 13)

"Excluding the Equipment for which the appellant had been granted capital allowance, the function of the Disputed Assets is storage and housing." — Per Choo Han Teck J, Para 13

The judge also noted that the Board’s findings were made after a site visit, which reinforced the deference owed to the Board’s factual assessment. The High Court did not re-try the matter as if it were making a fresh first-instance determination; instead, it asked whether the Board’s conclusion could be said to be unreasonable. On that basis, the court held that the Board was not wrong to find that the Silo was a building and not a plant. (Para 8) (Para 10) (Para 20)

"The findings of the Board, after a site visit to the Silo, cannot be said to be unreasonable. I therefore dismiss the appeal." — Per Choo Han Teck J, Para 20

What were the facts that led to the tax dispute over the cement silo?

The appellant had originally imported Japanese ONADA Brand Ordinary Portland Cement, and in 2011 it began importing a different product, Portland fly-ash cement under the Japanese TAIHEYO brand. The Silo was constructed in 2013 in preparation for the increased demand for PFAC. The factual background mattered because it showed that the Silo was built for a commercial purpose connected with the appellant’s cement business, but the legal issue remained whether that purpose made the structure a plant or merely a building used in the business. (Para 1)

"Prior to 2011, the appellant had only been importing Japanese ONADA Brand Ordinary Portland Cement (“OPC”). In 2011, the appellant began importing a new type of cement under the Japanese TAIHEYO brand, known as Portland fly-ash cement (“PFAC”). In 2013, the appellant constructed the Silo in preparation for the increased demand of PFAC." — Per Choo Han Teck J, Para 1

The Silo itself was described as a purpose-built cylindrical structure with a height of 65 metres and a diameter of 23 metres. It had two functional sections: the storage section, which comprised approximately the top two-thirds of the Silo’s volume and stored cement after unloading from ships, and the dispensing section, which comprised approximately the bottom one-third and contained equipment for dispensing cement into trucks. This description was central to the court’s analysis because it showed that the Silo combined structural and operational elements, but the court ultimately separated the equipment from the disputed structural assets. (Para 3)

"The Silo is purpose-built for optimum storage and distribution. It is a cylindrical structure with a height of 65 metres and a diameter of 23 metres. It consists of two sections — a section representing approximately the top two-thirds of the volume of the Silo, where cement is stored after it is unloaded from the ship (“the storage section”), and a section representing approximately the bottom one-third of the volume of the Silo which contains equipment for dispensing the cement into trucks (“the dispensing section”)." — Per Choo Han Teck J, Para 3

The court also recorded the appellant’s advance ruling application under s 108 of the Income Tax Act, which sought confirmation that the Silo qualified as a plant for accelerated capital allowance under s 19A. The Comptroller’s response was partial: capital allowances were allowed for the equipment, but not for the structural components. The disputed items were the Silo Walls, the Inverted Cone, the Top House, the Pigeon House, the Blower Room, and the Control Room. That division between allowed equipment and disallowed structural assets became the practical focus of the appeal. (Para 5) (Para 6)

"The Comptroller disallowed capital allowances on the former group, which comprised: (a) The Silo Walls; (which form the structure of the Silo) (b) The Inverted Cone; (c) The Top House (which houses the Bucket Elevator); (d) The Pigeon House; (which houses the Bag Filter System); (e) The Blower Room; (which houses the Blower); and (f) The Control Room (which houses the Computer System)." — Per Choo Han Teck J, Para 6

How did the court frame the legal test for plant versus building?

The court treated ZF as the leading Singapore authority and quoted the proposition that whether an asset is a plant is a question of fact. The judge also recorded the parties’ agreement that where an asset has characteristics of both plant and building, the question is which category is more appropriate in the circumstances. That framing is important because it shows that the court did not apply a rigid checklist; instead, it used a contextual classification exercise grounded in the facts. (Para 10) (Para 11)

"As the Court of Appeal explained in ZF (at [72]), the question of whether an asset is a plant is a question of fact:" — Per Choo Han Teck J, Para 10

"It is further agreed between the parties that in situations where an asset has characteristics that may justify a classification as both “plant” and “building”, the question is, which category is more appropriate in the circumstances." — Per Choo Han Teck J, Para 11

The judge also stated the appellate standard that mattered if the challenge was only to the Board’s factual assessment. If the Board was correct in law and the appeal was merely about the facts, the appellant had to show that the Board’s conclusion was unreasonable. This is a significant part of the reasoning because it limited the scope of appellate intervention and required the appellant to do more than offer an alternative view of the evidence. (Para 10)

"If the Board was correct in law and the appeal is merely on the facts — that the Board applied the factors referred to in ZF erroneously when it found that the Silo is not a plant, then for the appeal to succeed, counsel for the appellant has to show that the Board’s finding was an “unreasonable conclusion”." — Per Choo Han Teck J, Para 10

Against that framework, the court rejected the appellant’s attempt to expand the plant concept by relying on foreign cases that might treat industrial structures differently. The judge’s approach was that Singapore law, as explained in ZF, draws a mutually exclusive distinction between plant and building, so the classification exercise must be conducted within that domestic framework. That meant the court was not persuaded by authorities from jurisdictions that allow dual classification or that use different statutory settings. (Para 12) (Para 14) (Para 19)

Why did the appellant rely on Schofield, Barclay Curle, and Waitaki International, and why did the court reject those authorities?

The appellant argued that the Board misapplied ZF by failing to apply Schofield and Barclay Curle, which it said had been endorsed by the Court of Appeal in ZF. The appellant also relied on Waitaki International in support of the proposition that the Silo should be treated as an indivisible whole, rather than as separable parts. These submissions were aimed at showing that the Silo’s industrial function and integrated design should push it into the plant category. (Para 9) (Para 14)

"First, he says that the Board misapplied the leading decision of ZF v Comptroller of Income Tax [2011] 1 SLR 1044 (“ZF”) by not applying the cases of Schofield v R&H Hall (1974) 49 TC 538 (“Schofield”) and Inland Revenue Commissioners v Barclay, Curle & Co Ltd [1969] 1 WLR 675 (“Barclay Curle”), which he submits were endorsed by the Court of Appeal in ZF." — Per Choo Han Teck J, Para 9

The court rejected that line of argument. It said it did not agree that the Board misunderstood ZF by not applying Schofield and Barclay Curle. The reason was not that those cases were irrelevant in every sense, but that they were of limited value in Singapore because they do not help answer the specific question whether an asset is a plant or a building under Singapore law. The judge emphasised that those cases may illustrate what other jurisdictions regard as plant, but they do not displace the Singapore classification framework. (Para 11) (Para 12)

"I do not agree with Mr Rajah’s argument that the Board misunderstood ZF by not applying the cases of Schofield and Barclay Curle." — Per Choo Han Teck J, Para 11

"Thus, even if those cases are relevant insofar as they describe the character of a plant, they are of limited value because they offer no help in determining whether the Silo is a plant or building." — Per Choo Han Teck J, Para 12

The same reasoning applied to Waitaki International and the other foreign authorities. The judge noted that those cases were decided in jurisdictions that permit an asset to be both a building and a plant simultaneously. Singapore law, by contrast, treats the categories as mutually exclusive. For that reason, the foreign cases could not answer the domestic question posed by the appeal. The court therefore treated them as illustrative at most, not controlling or even especially helpful. (Para 14) (Para 19)

"However, as Mr Lee correctly points out, these cases were decided in jurisdictions that permit an asset to be both a building and a plant simultaneously." — Per Choo Han Teck J, Para 14

"although these cases provide examples of what other jurisdictions consider to be a plant, it is of no help to our courts when we are faced with the question of whether an asset is a plant or building under Singapore law." — Per Choo Han Teck J, Para 12

How did the court deal with the appellant’s argument that the Silo performed active operational functions?

The appellant submitted that the Silo performed six active operational functions in relation to cement: transportation, control, filtration, batching, preservation, and protection. This was an attempt to move the Silo away from the idea of a passive storage structure and toward the idea of an active business apparatus. The court acknowledged the submission, but its analysis distinguished between the functions of the disputed structural assets and the functions of the equipment already allowed for capital allowance. (Para 13)

"The appellant claims that the Silo performs the following six active operational functions in relation to the cement: transportation, control, filtration, batching, preservation and protection." — Per Choo Han Teck J, Para 13

The judge’s answer was that, once the equipment was excluded, the disputed assets themselves performed storage and housing functions. In other words, the active operational functions were not attributed to the structural components that were the subject of the disallowance. The court therefore did not accept that the mere presence of operational activity within the Silo transformed the whole structure into plant. The decisive point was the character of the disputed assets themselves, not the overall business utility of the Silo. (Para 13)

"Excluding the Equipment for which the appellant had been granted capital allowance, the function of the Disputed Assets is storage and housing." — Per Choo Han Teck J, Para 13

The court also warned against a broad approach that would blur the distinction between plant and building. If protection and preservation were enough to make a structure a plant, then warehouses and storage facilities could too easily be reclassified. The judge expressly noted that such an approach would blur the distinction between plants and buildings, which is inconsistent with the Singapore framework. This was a key policy-sensitive part of the reasoning because it preserved the boundary between industrial equipment and structural premises. (Para 13)

"If the function of protection and preservation is allowed as a factor pointing in favour of an asset being characterised as a plant, the distinction between plants and buildings (such as warehouses and storage facilities) will be blurred." — Per Choo Han Teck J, Para 13

Why did the court say the Silo could be divided into separate assets for tax purposes?

The appellant argued that the Silo should be treated as an integrated whole and that the Comptroller should not have separated the structural components from the equipment. The court rejected that submission. It held that s 19A of the Income Tax Act does not prevent the Comptroller from classifying parts of the Silo as separate assets for tax differentiation. That conclusion was important because it allowed the court to accept the allowance for the equipment while still denying it for the structural parts. (Para 15)

"Section 19A of the ITA does not preclude the Comptroller from classifying parts of the Silo as separate assets for differentiation for tax purposes." — Per Choo Han Teck J, Para 15

The judge’s reasoning was reinforced by the factual record. The appellant had provided separate cost schedules for the construction of the disputed assets and the equipment from the time it requested the advance ruling. That showed that the appellant itself had treated the components separately for costing purposes. The court also noted that it was not disputed that the equipment was maintained by contractors different from those maintaining the disputed assets. Those facts supported the practical and legal separability of the two groups of assets. (Para 17)

"The appellant provided separate cost schedules for the construction of the Disputed Assets and the Equipment from the instant it requested for an advance ruling." — Per Choo Han Teck J, Para 17

"Finally, it was not disputed that the Equipment is maintained by contractors other than those maintaining the Disputed Assets." — Per Choo Han Teck J, Para 17

The court also observed that the appellant’s own treatment of the assets undermined the indivisibility argument. If the appellant had separately costed and separately maintained the equipment, it was difficult to insist that the entire Silo had to be treated as one inseverable asset for tax purposes. The judge’s approach was therefore both doctrinal and practical: the statute did not forbid separation, and the facts supported it. (Para 15) (Para 17)

What role did the Board’s site visit and factual findings play in the outcome?

The Board’s site visit was significant because it meant the tribunal had seen the Silo firsthand before deciding the appeal. The High Court expressly referred to the fact that the Board had heard the parties and conducted a site visit before finding for the Comptroller. That procedural history mattered because it strengthened the reasonableness of the Board’s factual conclusion and made appellate interference less likely. (Para 8)

"The Board, after hearing parties and conducting a site visit to the Silo, found for the Comptroller." — Per Choo Han Teck J, Para 8

The High Court did not identify any legal error in the Board’s approach to the classification exercise. Instead, it accepted that the Board had applied the relevant Singapore authorities and had reached a conclusion that could not be said to be unreasonable. The judge’s language is important: he did not merely say that he might have reached the same conclusion; he said the Board was not wrong and its findings could not be said to be unreasonable. That is a strong endorsement of the Board’s factual assessment. (Para 10) (Para 20)

"The findings of the Board, after a site visit to the Silo, cannot be said to be unreasonable." — Per Choo Han Teck J, Para 20

The practical effect of this deference was that the appellant’s case had to overcome both the substantive classification analysis and the institutional weight of the Board’s own inspection. It failed on both fronts. The court therefore dismissed the appeal without disturbing the Board’s treatment of the disputed assets. (Para 20)

How did the court treat the appellant’s reliance on the idea that the Silo was a single integrated structure?

The appellant’s indivisibility argument was that the Silo should be viewed as a single industrial unit, with the structural and operational components functioning together as one asset. The court did not accept that proposition as a matter of tax classification. Instead, it held that the statute permits the Comptroller to classify parts of the Silo separately, and the factual record showed that the appellant itself had separated the costs and maintenance of the equipment from the disputed structural assets. (Para 15) (Para 17)

"Section 19A of the ITA does not preclude the Comptroller from classifying parts of the Silo as separate assets for differentiation for tax purposes." — Per Choo Han Teck J, Para 15

The judge also explained why the foreign cases cited by the appellant did not assist on this point. Those cases arose in legal systems that allow an asset to be both a building and a plant at the same time. Singapore law does not. Because of that difference, the foreign authorities could not be used to collapse the distinction between the Silo’s structural and equipment components. The court therefore preserved the separate treatment of the equipment and the disputed assets. (Para 14) (Para 19)

"The mutually exclusive classification of plant and building laid down in ZF has been the law since 2010, when the IBA was still in force (it is due to be phased out by 2023)." — Per Choo Han Teck J, Para 19

That statement is especially important because it shows the court’s view that the plant/building distinction was not a new or tentative idea, but a settled feature of Singapore tax law. The court used that settled framework to reject any attempt to import a more flexible foreign approach. The result was that the Silo’s equipment could be allowed, but the structural parts remained building-like and therefore outside the accelerated allowance claimed. (Para 19) (Para 20)

What exactly did the court decide on the appeal and what happened to costs?

The court’s final conclusion was straightforward: the appeal was dismissed. The judge stated that the Board was not wrong to find that the Silo was a building and not a plant, and that the Board’s findings after the site visit could not be said to be unreasonable. That disposed of the substantive tax issue against the appellant. (Para 20)

"I therefore dismiss the appeal." — Per Choo Han Teck J, Para 20

On costs, the judge did not make a final order in the judgment itself. Instead, he stated that he would hear the question of costs later if the parties were unable to agree. That means the judgment left costs open pending either agreement or a further hearing. The extraction does not provide any later costs outcome, so only that limited procedural step can be stated. (Para 21)

"I will hear the question of costs at a later date if parties are unable to agree costs." — Per Choo Han Teck J, Para 21

The judgment therefore ended with a complete dismissal on the merits but an incomplete resolution on costs. The substantive holding was that the Silo’s disputed structural components were building assets, not plant, and so did not qualify for the accelerated capital allowance sought under s 19A. (Para 20) (Para 21)

Why does this case matter for Singapore income tax disputes involving industrial structures?

This case matters because it applies the plant-versus-building distinction to a large, specialised industrial silo and confirms that purpose-built industrial structures are not automatically plant merely because they are essential to a business process. The court’s analysis shows that the decisive question is the character of the disputed asset itself, not simply whether it is commercially important or technologically sophisticated. That is a practical lesson for taxpayers seeking accelerated capital allowance on industrial facilities. (Para 13) (Para 20)

The case also reinforces the limited role of foreign authorities in Singapore tax classification disputes. The judge made clear that cases from jurisdictions allowing dual classification do not answer the Singapore question, because Singapore law treats plant and building as mutually exclusive. That is a significant doctrinal point for practitioners who may be tempted to rely on overseas silo, warehouse, or factory cases without first checking whether the legal framework is comparable. (Para 12) (Para 14) (Para 19)

Finally, the decision confirms that structural and operational components may be separated for tax purposes where the facts support that separation. The appellant’s own separate cost schedules and maintenance arrangements were important in showing that the equipment and the disputed assets were distinct. For future disputes, that means taxpayers should expect the Comptroller and the courts to look closely at how assets are costed, maintained, and functionally divided. (Para 15) (Para 17)

Cases Referred To

Legislation Referenced

• Income Tax Act (Cap 134, 2014 Rev Ed), s 19A — accelerated capital allowance for plant and machinery. (Para 1) (Para 5) [CDN] [SSO]
• Income Tax Act (Cap 134, 2014 Rev Ed), s 108 — advance tax ruling application. (Para 5) [CDN] [SSO]
• Income Tax Act, s 81(2) — mentioned in the title/opening matter in the extraction, but not substantively analysed in the provided text. (Para 0) [CDN] [SSO]

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN

This article analyses [2023] SGHC 57 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.