Date: 20020506
Docket: 2001-333-ST-
BETWEEN:
SATYA PAL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
(Delivered orally at Toronto, Ontario on March 15, 2002 and subsequently edited as to form)
Bonner, T.C.J.
[1] The Appellant appeals from an assessment under part 9 of the Excise Tax Act. The appeal relates to the period from January 1st, 1994, to December 31st, 1996. The issue is whether the Minister of National Revenue properly assessed the Appellant for net tax for that period. Penalties and interest are also under appeal but they turn on the main issue.
[2] The Appellant contends that during the period he was a small supplier who was not a registrant and that by virtue of section 166 of the Act he was not required to collect and remit GST on taxable supplies.
[3] Section 166 of the Act provides where a person makes a taxable supply other than a supply of real property by way of sale, and the consideration or a part thereof for the supply becomes due, or is paid before it becomes due at a time when the person is a small supplier who is not a registrant, that consideration or part thereof, as the case may be, shall not be included in calculating the tax payable in respect of the supply.
[4] To succeed the Appellant must meet two conditions; first he must not have been a registrant. No doubt he did register under the Act at sometime before the beginning of the period covered by the assessment. That was admitted. However, the Appellant produced a letter dated October 23rd, 2001 sent to him by Rob Wright, Commissioner of Customs and Revenue. That letter reads in part: "We have approved your request to cancel your Goods and Services Tax, Harmonized Sales Tax GST/HST registration. Accordingly, effective December 31st, 1992 you will no longer be registered for the GST/HST".
[5] It is evident that the first condition is met.
[6] The second condition is that the Appellant qualified at the relevant time as a small supplier under subsection 148.1 of the Act. That provision is somewhat long and it wouldn't help to read it here and now. Anybody who wants can get it from the statute.
[7] The Appellant adduced no cogent evidence in this appeal which establishes that the $30,000.00 limit as set out in subsection 148.1 was not exceeded. The onus was on the Appellant to establish that he qualified for section 166 treatment and he failed to discharge it. The Appellant's vague general statements regarding the consideration which he earned just won't do. The Appellant did not produce any sort of comprehensive financial records of his business activities. It seems clear that he did not keep any.
[8] The evidence of Mr. Harper, the Revenue Canada auditor, indicates that he based the GST assessment on the net worth assessment made by Mr. Wright, the income tax auditor. Although a net worth calculation is, for the reasons which I gave in Mr. Pal's income tax appeal, a blunt instrument, the calculation made here tends to show that Mr. Pal was in receipt of undisclosed income. He had only one source, the taxi cab rental operation.
[9] The Appellant therefore failed to establish on a balance of probabilities that the taxable supplies made by him fell below the $30,000.00 limit. The appeal will therefore be dismissed.
Signed at Toronto, Ontario, this 6th day of May 2002.
"M.J. Bonner"
T.C.J.
COURT FILE NO.: 2001-333(GST)I
STYLE OF CAUSE: Satya Pal and H.M.Q.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: March 15, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge M.J. Bonner
DATE OF JUDGMENT: March 22, 2002
DATE OF REASONS
FOR JUDGMENT: May 6, 2002
APPEARANCES:
Agent for the Appellant: Manmohan Duggal
Counsel for the Respondent: Scott Simser
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada