BETWEEN:
SYSTEMATIX TECHNOLOGY CONSULTANTS INC.
and
Heard at Edmonton, Alberta, on June 11, 2007.
Judgment delivered from the Bench at Edmonton, Alberta, on June 11, 2007.
REASONS FOR JUDGMENT OF THE COURT BY: SEXTON J.A.
DÈCARY J.A.
PELLETIER J.A.
Docket: A-181-06
Citation: 2007 FCA 226
CORAM: DÉCARY J.A.
SEXTON J.A.
PELLETIER J.A.
BETWEEN:
SYSTEMATIX TECHNOLOGY CONSULTANTS INC.
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Edmonton, Alberta, on June 11, 2007)
[1] The Appellant paid GST to a number of suppliers. Unfortunately, for various reasons, those suppliers did not have valid GST registration numbers. Consequently the Respondent disallowed the Appellant’s claim for input tax credits. The Appellant appealed to the Tax Court which dismissed the appeal.
[2] The Excise Tax Act, R.S.C. 1985 c. E-15 provides as follows:
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169(4) A registrant may not claim an input tax credit for a reporting period unless, before filing the return in which the credit is claimed, (a) the registrant has obtained sufficient evidence in such form containing such information as will enable the amount of the input tax credit to be determined, including any such information as may be prescribed;
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169(4) L’inscrit peut demander un crédit de taxe sur les intrants pour une période de déclaration si, avant de produire la déclaration à cette fin : a) il obtient les renseignements suffisants pour établir le montant du crédit, y compris les renseignements visés par règlement;
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[3] Section 3 of the Input Tax Credit Information Regulations provides:
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3. For the purposes of paragraph 169(4)(a) of the Act, the following information is prescribed information: (b) where the total amount paid or payable shown on the supporting documentation in respect of the supply or, if the supporting documentation is in respect of more than one supply, the supplies, is $30 or more and less than $150, (i) the name of the supplier or the intermediary in respect of the supply, or the name under which the supplier or the intermediary does business, and the registration number assigned under subsection 241(1) of the Act to the supplier or the intermediary, as the case may be, (ii) the information set out in subparagraphs (a)(ii) to (iv), (c) where the total amount paid or payable shown on the supporting documentation in respect of the supply or, if the supporting documentation is in respect of more than one supply, the supplies, is $150 or more, (i) the information set out in paragraphs (a) and (b), |
3. Les renseignements visés à l'alinéa 169(4)a) de la Loi, sont les suivants : b) lorsque le montant total payé ou payable, selon la pièce justificative, à l'égard d'une ou de plusieurs fournitures est de 30 $ ou plus et de moins de 150 $ : (i) le nom ou le nom commercial du fournisseur ou de l'intermédiaire et le numéro d'inscription attribué, conformément au paragraphe 241(1) de la Loi, au fournisseur ou à l'intermédiaire, selon le cas, (ii) les renseignements visés aux sous-alinéas a)(ii) à (iv), c) lorsque le montant total payé ou payable, selon la pièce justificative, à l'égard d'une ou de plusieurs fournitures est de 150 $ ou plus : (i) les renseignements visés aux alinéas a) et b),
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[4] We are of the view that the legislation is mandatory in that it requires persons who have paid GST to suppliers to have valid GST registration numbers from those suppliers when claiming input tax credits.
[5] We agree with the comments of Bowie J. in the case of Key Property Management Corp. v. R. [2004] G.S.T.C. 32 (T.C.C.) where he stated:
“The whole purpose of paragraph 169(4)(a) and the Regulations is to protect the consolidated revenue fund against both fraudulent and innocent incursions. They cannot succeed in that purpose unless they are considered to be mandatory requirements and strictly enforced. The result of viewing them as merely directory would not simply be inconvenient, it would be a serious breach of the integrity of the statutory scheme [emphasis added].
[6] We also agree with the comments of Campbell J. in Davis v. R. [2004] G.S.T.C. 134 (TCC):
“Because of the very specific way in which these provisions are worded, I do not believe they can be sidestepped. They are clearly mandatory and the Appellant has simply not met the technical requirements which the Act and the Regulations place upon him as a member of a self-assessing system [emphasis added].
[7] Despite the able submissions of Mr. Beck, acting for the Appellant, we can find no error on the part of the Tax Court Judge and the appeal will therefore be dismissed with costs.
“J. Edgar Sexton”
__________________________
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-181-06
STYLE OF CAUSE: Systematix Technology
Consultants Inc. v.
Her Majesty the Queen
PLACE OF HEARING: Edmonton, Alberta
DATE OF HEARING: June 11, 2007
REASONS FOR JUDGMENT OF THE COURT BY: DÉCARY, SEXTON, PELLETIER, JJ.A.
DELIVERED FROM THE BENCH BY: SEXTON J.A.
APPEARANCES:
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(780) 969-3500 |
FOR THE APPELLANT
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(780) 495 3491 |
FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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2105-10088 102 Avenue Edmonton, AB T5J 2Z1 |
FOR THE APPELLANT
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211-10199 101 Street Edmonton, AB T5J 3Y4 |
FOR THE RESPONDENT
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