PUBLIC PROSECUTOR v TAN TECK LEONG, MELVIN (CHEN DELIANG, MELVIN)

Facts

Tan Teck Leong Melvin was the sole proprietor of T.L Freight, a freight forwarder shipping consolidated cargoes from China to Singapore. Between January 2016 and December 2019 he falsified consolidated packing lists by lowering the value of goods at random. His declaring agents relied on these lists and under-declared the value to Singapore Customs, so less GST was paid. He then invoiced the buyers GST on the actual higher value and pocketed the difference. He committed the offences for personal gain, being deep in debt.

He pleaded guilty to three amalgamated charges under s 128D of the Customs Act for fraudulently evading GST, covering 2016, 2017 and 2019, with evaded sums of $182,796.46, $219,884.40 and $201,546.21, totalling $604,227.07. Six similar charges were taken into consideration. The District Judge fined him $1m per charge, a total of $3m, with eight months' imprisonment in default per charge, totalling 24 months. The respondent could not pay and began serving the default term on 30 June 2022.

The Prosecution appealed in Magistrate's Appeal No 9134 of 2022, arguing that the sentence was manifestly inadequate and asking for sentencing guidance, as the State Courts had been inconsistent. The court, comprising Sundaresh Menon CJ, Tay Yong Kwang JCA and Vincent Hoong J, appointed Ms Wong Pei Ting as Young Independent Counsel.

Issues

1. What sentencing framework applies to fraudulent evasion of GST on imported goods under s 128D of the Customs Act.
2. What framework applies to default imprisonment terms for fines under s 128L(2) of the Customs Act.
3. Whether the new frameworks should apply only prospectively, and whether the respondent's fines and default terms were manifestly inadequate.

Holding

The court allowed the Prosecution's appeal in part. The fine of $1m for each charge stood, but the default imprisonment term was increased to 12 months per charge, or 36 months in total in default of paying the aggregate fine of $3m.

Reasoning

Confining itself to GST evasion on non-harmful imported goods, the court rejected the Young Independent Counsel's sentencing-bands model, because it excluded the amount evaded as a factor although s 128L(2) sets fines as multiples of that amount, and because it risked crushing fines in large cases. It built on the Prosecution's regressive-multiplier model with smaller bands, applied cumulatively like income tax: a multiplier of 12 on the first $250, falling in stages to 2 for amounts above $1m, for first-time offenders pleading guilty early. Multipliers from 13 to 20 were left for aggravated cases, and fractions were permitted. The framework applies per charge, since totalling across amalgamated charges would sidestep the 12-month limit in s 124(5)(d) of the Criminal Procedure Code. The court then adjusts for aggravating factors, such as syndicates, sophistication, personal monetary gain and TIC charges, and mitigating factors such as restitution and cooperation, before a last look under the totality principle. The court took the provisional view that the doubled maximum for amalgamated charges would rarely be needed.

For default terms, whose purpose is to prevent evasion of the fine, the court set indicative ranges per charge by fine size, from up to 6 months for fines up to $500,000 to the statutory maximum of 72 months for $10m and above, subject to totality since default terms run consecutively. The same framework applies to harmful goods.

Prospective overruling was refused, as there was no entrenched norm and the frameworks merely gave coherence to practice. The indicative fines were $950,500, $1,098,500 and $1,026,500, so the fines of $1m each, given the aggravating and mitigating factors the District Judge identified, were not manifestly inadequate. The court noted that the respondent's $50,000 partial restitution was weighed against a stated income averaged over only two years, one affected by the pandemic. The indicative default term was 12 months per charge, and the 24-month total was manifestly inadequate.

From the judgment