THE High Court on Tuesday ruled in favour of the Land Transport Authority (LTA) in its appeal against an earlier verdict on a case involving car taxes owed by Hyundai agent Komoco.

After hearing arguments put forth by senior lawyers Sundaresh Menon, for LTA, and Harry Elias, for Komoco, over four hours on Monday, Chief Justice Chan Sek Keong and Justices Andrew Phang and V K Rajah concluded that the LTA had given "genuine consideration" to Komoco's case. And that it had the right to pursue Komoco for those owed taxes.

Whether the authority had given the company, owned by tycoon Ong Beng Seng, a "fair hearing" was the crux of the appeal that came before the judges this week. In May, judge Judith Prakash ruled that LTA should hear Komoco out, and not simply rely on a Singapore Customs finding that the company had declared incorrectly the value of over 17,000 vehicles.

Following Justice Prakash unprecedented ruling, the LTA filed an appeal in June. Tuesday's Court of Appeal verdict means Komoco will now have to pay the $7 million or so it owes the LTA in Additional Registration Fees (ARF) of 17,449 Hyundais sold between 1996 and 2001.

The Straits Times understands the LTA will write to owners of the vehicles to inform them of adjustments to their scrap values. But since many of these vehicles have already been taken off the road, this could be an academic exercise for some.

The case brings to light a practice dating back to the 1960s, when LTA applied taxes on cars based on Singapore Customs' valuation of the vehicles. In the past, the LTA had recovered tens of millions of dollars in ARF this way. In 1998, it collected $28 million from Toyota distributor Borneo Motors and two parallel importers after Customs revised OMVs of 5,000 cars.

But the largest amount, said to be over $40 million, was owed by former Rover importer Intra-Motors. The subsidiary of government-linked Intraco could not pay up and eventually went out of business.

Komoco is believed to be the first motor trader to challenge the LTA's practice.

Meanwhile, Singapore Customs is currently auditing several parallel importers for wrong declarations of car values. Last month, Ng Chee Siang, 24, and Chua Wee Meng, 37, were charged in court for trying to recover documents seized by Customs for such an investigation. The two are linked to what is believed to be the biggest parallel importer in Singapore, which sells brands from Toyota to Porsche.