A-933-96
CORAM: PRATTE, J.A.
STONE, J.A.
MCDONALD, J.A.
BETWEEN:
DESIGN BUILD LTD.
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
HEARD at Halifax, Nova Scotia, on Wednesday, October 15, 1997
JUDGMENT rendered at Halifax on Wednesday, October 15, 1997
REASONS FOR JUDGMENT BY: STONE, J.A.
A-933-96
CORAM: PRATTE, J.A.
STONE, J.A.
MCDONALD, J.A.
.
BETWEEN:
DESIGN BUILD LTD.
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Halifax, Nova Scotia on
Wednesday, October 15, 1997)
STONE, J.A.
We have not been persuaded that we should interfere with the judgment of the Tax Court of Canada of October 11, 1996.
It is clear to us that the record before the Tax Court of Canada was less than satisfactory from an evidentiary standpoint. Indeed, the learned Tax Court judge characterized it in these words, at pages 4-6:
| The Appellant's chief witness was unable to specifically respond to the assessment, other than to say all his records were there, and that he calculated the GST on the end sum total basis and then filed for the appropriate input tax credit. In this hearing, the Appellant's witness, as I said, could not specifically identify, in relation to the assessment, the problem or the amounts in dispute. And, yet, the amount that was in dispute was still disputed today. On cross-examination the Respondent's counsel put certain of the Appellant's records used, by the Appellant, to his chief witness, and asked for the Appellant's comments and answers to specific questions. This cross-examination revealed, in several documents, no GST number was shown. Some bills were personal bills of the Appellant's witness. Some of the invoices did not identify the purchaser. Some invoices or bills or receipts did not show GST or who was paid and what was owing and yet those invoices were used in the end tax calculation. The Appellant's chief witness was also unable to show the court that individuals who were purportedly paid bills were paid or reimbursed by the Appellant. Moreover certain expenses might have been personal or otherwise and did not -- or other bills did not have a GST component. And yet those bills found themselves in the end calculation. |
The Applicant contends that the Tax Court of Canada erred by failing to apply the provisions of subsection 169(5)1 and section 1752 of the Excise Tax Act, and that he failed to consider that the Minister's discretion under subsection 169(5) had been exercised in "GST Memorandum 400-1-2: Input Tax Credits " Documentary Requirements", of November 8, 1990.
Assuming without deciding that this memorandum constituted an exercise of the Minister's discretion under subsection 169(5) of the Act, we are not persuaded on the record before the Tax Court of Canada that there was evidence of the true amount or amounts of GST paid and reimbursed.
The section 28 application will therefore be dismissed.
"A.J. Stone"
J.A.
FEDERAL COURT OF APPEAL
Names of Counsel and Solicitors of Record
COURT NUMBER: A-933-96
STYLE OF CAUSE: Design Build Ltd.
v.
Her Majesty The Queen
PLACE OF HEARING: Halifax, Nova Scotia
DATE OF HEARING: October 15, 1997.
REASONS FOR JUDGMENT OF THE COURT: (Pratte, Stone, McDonald JJ.A)
RENDERED FROM THE BENCH BY: Stone, J.A.
APPEARANCES:
Mr. Frederick Clarke for Applicant
Ms. Anne-Marie Levesque for Respondent
SOLICITORS OF RECORD
Frederick Clarke
Halifax, Nova Scotia for Applicant
George Thompson
Deputy Attorney General of Canada
Ottawa, Ontario for Respondent
__________________
1 169(5) " Where the Minister is satisfied that there are or will be sufficient records available to establish the particulars of any supply or importation or of any supply or importation of a specified class and the tax in respect of the supply or importation paid or payable under this Part, the Minister may (a) exempt a specified registrant, a specified class of registrants or registrants generally from any of the requirements of subsection (4) in respect of that supply or importation or a supply or importation of that class; and (b) specify terms and conditions of the exemption.
2 175 " For the purposes of this Part, where an employee of an employer, a member of a partnership or a volunteer who gives services to a charity acquires or imports property or a service for consumption or use in relation to activities of the employer, partnership or charity (each of whom is referred to in this section as the "person") and in respect of which the employee, member or volunteer receives, at any time, a reimbursement from the person, the person shall be deemed (a) to have received a taxable supply of the property or service; (b) to have so acquired the property or service for use in commercial activities of the person to the same extent as the property or service was acquired or imported by the employee, member or volunteer for consumption or use in relation to commercial activities of the person; and (c) to have paid, at that time, tax in respect of the supply equal to the amount, if any, included in the amount reimbursed that is on account of tax paid or payable by the employee, member or volunteer in respect of the acquisition or importation of the property or service by the employee, member or volunteer.