Date: 20020613
Docket: 2001-3886-GST-I
BETWEEN:
MEL VENKAT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
Bowman, A.C.J.
[1] This appeal is from an assessment of $867.15. Although the issue boils down ultimately to whether I accept the appellant's evidence that he submitted a claim for input tax credits ("ITCs") within the statutory time limit, a brief outline of the background is in order.
[2] The appellant claimed a refund of net tax of $867.15 in his 1993 personal income tax return rather than in a GST return. This should have been claimed in a GST return for the period October 1, 1993 to December 31, 1993. The appellant carried on business as a sole proprietor at that time as a distributor of video cassettes and tapes.
[3] On July 22, 1996 the appellant was reassessed under the Income Tax Act and the $867.15 Employee and Partner GST Rebate originally claimed and allowed was disallowed.
[4] On August 7, 1996 the appellant wrote to Revenue Canada presumably objecting to the assessment although his letter is not as clear as it might be. On December 19, 1996 Revenue Canada responded as follows.
Dear Sir:
Re: 1993 and 1995 Taxation Years
We have reviewed your request received August 8, 1996 and we have determined the following.
We did not adjust the Employee and Partner Goods and Services Tax Rebate because our records indicate that the GST Account, number 128381290, was a sole-proprietorship. Therefore, you do not qualify for the rebate on your T1 returns.
We trust this clarifies the matter.
[5] On September 9, 1998 Revenue Canada sent him a further letter presumably in response to a further request. It read:
Dear Sir:
Re: Your 1993 individual income tax return
We have reviewed your request to adjust your return. However, we are unable to make an adjustment for the following reasons:
Self-employed individuals who are registered for the GST are not eligible for the Employee and Partner GST Rebate. However, as a self-employed individual, you may be able to claim an input tax credit for the GST you paid on supplies acquired for your commercial activities.
You must file a GST return at regular intervals, showing the amount of GST you were charged. You recover the GST by claiming an input tax credit on the appropriate line of the GST return.
For more information regarding eligibility for the input tax credit, contact the appropriate information line at 669-2990 or 1-800-959-7775.
We trust this information will clarify the matter.
[6] On March 11, 1999 he wrote to Revenue Canada. The letter contains the following statements.
I just spoke to an officer in Revenue Canada and was advised the following:
· To fax the attached copy of my GST return of 1993 which was mailed in Aug. '96.
...
4- In 1996, I told the problem and was given to understand that my GST rebate per attached copy of GST return would be applied to my personal tax. ie account to account transfers.
[7] It appears that attached to that letter was a GST return bearing the date 12/08/96 signed by the appellant and claiming a refund of $867.15. Written across the top of the return are the words "Amended Revised - See letter attached".
[8] The assumptions on which the denial of the rebate was based are the following.
5. In so assessing the Appellant, the Minister made the following assumptions of fact:
a) the Appellant registered under Part IX of the Act effective March 14, 1991 and was assigned GST registration number 128381290;
b) the Appellant was in the business of audio/video distribution;
c) at all material times, the Appellant was required to collect GST on its taxable supplies/sales and to remit GST on a quarterly basis;
d) the Appellant reported NIL sales and NIL net tax owing for he period from March 14, 1991 to September 30, 1993;
e) on August 1, 1995, the GST return was initially filed by the Appellant for the period October 1, 1993 to December 31, 1993 reporting NIL sales and NIL net tax owing;
f) the Appellant reported NIL sales and NIL net tax owing for the period from January 1, 1994 to September 30, 1994;
g) by GST return submitted by the Appellant in a letter dated March 11, 1999, the Appellant purported to amend his return for the period October 1, 1993 to December 31, 1993, to report sales of $581, GST collected of $41 and input tax credits ("ITCs") of $908.15, arriving at a net tax refund claim of $867.15 (the "Credit");
h) the $908.15 ITCs was paid or became payable by the Appellant in his October 1, 1993 to December 31, 1993 reporting period;
i) the Appellant did not submit a claim for the Credit prior to March 11, 1999;
j) at all material times, the Appellant was aware of his obligations and liabilities under the Act;
k) the Appellant filed all GST returns for the periods from March 1991 to December 1993 by the end of 1995; and
l) the Appellant failed to claim the ITCs in respect of the period October 1, 1993 to December 31, 1993 within the statutory time limit.
[9] Under paragraph 225(4)(b) of the Excise Tax Act the ITCs claimed for a reporting period must be claimed within four years of the end of the reporting period. The last time for claiming the ITCs in the return for the period ending on December 31, 1993 would have been some time in December 1997. The appellant says he filed the return with his letter of August 7, 1996. The Crown's witness, Mr. Sidhu, testified that there is no record of the return being filed before March 11, 1999.
[10] I reserved judgment partly because the evidence was contradictory but principally because I believe judges should be careful about making findings of credibility in oral judgments delivered from the bench. In 1084767 Ontario Inc. operating as Celluland v. M.N.R., file numbers 2001-3945(EI) and 2001-3946(CPP), May 2, 2002, I said
[8] The evidence of the two witnesses is diametrically opposed. I reserved judgment because I do not think findings of credibility should be made lightly or, generally speaking, given in oral judgments from the bench. The power and obligation that a trial judge has to assess credibility is one of the heaviest responsibilities that a judge has. It is a responsibility that should be exercised with care and reflection because an adverse finding of credibility implies that someone is lying under oath. It is a power that should not be misused as an excuse for expeditiously getting rid of a case. The responsibility that rests on a trial judge to exercise extreme care in making findings of credibility is particularly onerous when one considers that a finding of credibility is virtually unappealable.
[11] I accept that there is no record in Revenue Canada of the return being filed before March 11, 1999. This is not, of course, conclusive. In a vast bureaucratic organization like Revenue Canada it is inevitable that documents will get lost or be misfiled or misplaced.
[12] Mr. Venkat testified that he faxed, mailed and hand delivered the return on August 8, 1996. The chances of all three copies being lost by Revenue Canada are remote. I think the more probable conclusion — to use the language appropriate to a civil standard of proof — is that the return was not filed until March 11, 1999. The appellant's assertion that the return was filed at the same time as his letter of August 7, 1996 (whether with it or separately) is somewhat inconsistent with the fact that nowhere in the letter does the appellant mention the return, nor is any mention made of it in the reply of December 9, 1996 from Revenue Canada. Also, it is passing strange that the return itself is dated August 12, 1996, four days after the date upon which the appellant says he filed it.
[13] In my opinion the appellant has not established that the return was filed before March 11, 1999.
[14] The appeal is dismissed.
Signed at Ottawa, Canada, this 13th day of June 2002.
"D.G.H. Bowman"
A.C.J.
COURT FILE NO.: 2001-3886(GST)I
STYLE OF CAUSE: Between Mel Venkat and
Her Majesty The Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: May 7, 2002
REASONS FOR JUDGMENT BY: The Honourable D.G.H. Bowman
Associate Chief Judge
DATE OF JUDGMENT: June 13, 2002
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Nadine Taylor
COUNSEL OF RECORD:
For the Appellant:
Name: --
Firm: --
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-3886(GST)I
BETWEEN:
MEL VENKAT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on May 7, 2002 at Vancouver, British Columbia, by
The Honourable D.G.H. Bowman
Associate Chief Judge
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nadine Taylor
JUDGMENT
It is ordered that the appeal from the assessment made under the Excise Tax Act, notice of which is dated February 15, 2000, be dismissed.
Signed at Ottawa, Canada, this 13th day of June 2002.
|
"D.G.H. Bowman" |
A.C.J.