Date: 20000804
Docket: 1999-1188-GST-I
BETWEEN:
MARIO DIONNE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
Tardif, J.T.C.C.
[1] This is an appeal from a notice of assessment dated January 26, 1998, concerning the goods and services tax ("GST").
[2] The issue is whether the appellant's GST rebate application was filed within the prescribed time.
[3] Marjolaine Parent, the appellant's spouse, acted as his agent at the hearing. The Court noted that Ms. Parent had been charged by her spouse with the handling of his case and, indeed, Ms. Parent was very well informed about the appellant's case.
[4] She explained that she had learned from the manager of a credit union that owners of private homes were entitled to a GST rebate. After receiving that information, she hastened to obtain the form required to make a claim. They were in great need of the money because of their limited ability to pay.
[5] Since their income was modest, they had taken out a $35,000 mortgage to build their new home themselves. After obtaining that loan, they had had to make mortgage payments and also pay for the rental accommodations in which they were living. To make ends meet, they sublet those accommodations and moved into their new home even though it was not completed.
[6] Upon obtaining the appropriate rebate claim form, Ms. Parent, who did not understand the implications of certain questions, took steps to get some information and explanations. The person she consulted, a Mr. Preston, told her that it would be better to wait until their family home construction project was fully completed to make the claim, since they would be entitled to a higher rebate. He added that only one rebate could be given for each home built.
[7] At that time, no mention at all was made of the strict time limit for filing such a claim. Nor did the then available form that was used refer to any time limit.
[8] Over the following months, the appellant and his spouse were able to continue the work thanks to a second loan of $5,000 obtained from the appellant's father. After exhausting their available funds, and given that their family responsibilities had increased with the arrival of another child, the appellant decided to apply for the GST rebate to obtain fresh money so that they could carry on with the project.
[9] The rebate application was denied on the ground that it had been filed after the expiration of the two-year time limit for doing so.
[10] The evidence showed that, at the time of his claim, the appellant had spent about $40,000 on the construction of their home. The evidence also showed that another $10,000 to $15,000 was needed to complete the family's project. Based on an essentially mathematical approach, the family home construction project was therefore about 75 percent completed.
Position of the parties
[11] The respondent assumed the following facts:
[TRANSLATION]
(a) the facts admitted above;
(b) in 1993, the appellant built a principal residence at 246 Notre-Dame Est in the municipality of Cap-Chat;
(c) that residence is said to be worth $57,400;
(d) in May 1993, the appellant began living in the house;
(e) from May 1993 to December 1994, the appellant finished a room in the basement and a laundry room and had eavestroughs installed;
(f) in December 1994, construction was substantially completed;
(g) the day the residential complex was first occupied as a place of residence and the day construction was substantially completed were prior to April 23, 1996;
(h) on or about October 21, 1997, the appellant, as a do-it-yourself homebuilder, filed a GST rebate application for the amount of $996.84;
(i) the rebate application was denied by the respondent on the ground that it had not been filed with the prescribed time.
[12] The appellant argued that his appeal should be allowed for the following reasons:
· one of the respondent's employees gave him incorrect or incomplete information;
· the rebate claim form did not refer to the strict two-year time limit;
· the fact that the form has been corrected and now states that a claim must be submitted within two years demonstrates fault or at least negligence by the Department of National Revenue ("the Department");
· finally, the appellant had no knowledge of the two-year time limit.
Analysis
[13] Ignorance of the Excise Tax Act ("the Act") cannot be relied on to support the appellant's case. As for the incorrect or incomplete information obtained from the respondent's employee and the existence of incomplete forms, once again, that does not exempt the appellant from the duty to comply with a time limit established by the Act.
[14] However, the evidence did show that the starting point determined by the respondent for computing the strict two-year time limit was not as obvious or decisive as suggested. In fact, the evidence showed that the work was not completed or entirely finished even when the claim was filed.
[15] On this point, the appellant's spouse clearly stated that the rebate application meant that she and her spouse were aware that they would lose the tax rebate on the other amounts they would pay in the future to complete the work. However, they preferred to apply at that time so that they could continue some of the work.
[16] To qualify for or be entitled to a rebate, the first requirement laid down by Parliament is meeting a two-year time limit, which must be computed from the earlier of the following days:
(a) when the residential complex was occupied as a place of residence at any time after construction began;
(b) when construction of the residential complex was substantially completed.
[17] According to the evidence, the residential complex for which the rebate was claimed was not fully completed when the appellant and his spouse first began occupying it in May 1993; what is more, the home was still not completed when the claim was filed on October 21, 1997.
[18] However, the Act is very clear about when the two-year time limit starts to run. It is the earlier of the following two possibilities:
(1) when the residential complex was occupied as a place of residence at any time after construction began;
(2) when construction of the residential complex was substantially completed.
[19] In the case at bar, therefore, the two-year time limit must unfortunately be computed as of the date the residential complex was first occupied, that is, May 1, 1993, and as a consequence the rebate application was inadmissible. Since the time limit was a strict one, the failure to comply with it is unfortunately fatal even though the facts and circumstances related to the claim are very unusual and inspire a great deal of sympathy.
[20] The appeal must therefore be dismissed on the ground that the claim was filed late.
Signed at Ottawa, this 4th day of August 2000.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 12th day of October 2001.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-1188(GST)I
BETWEEN:
MARIO DIONNE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on July 4, 2000, at Rimouski, Quebec, by
the Honourable Judge Alain Tardif
Appearances
Agent for the Appellant: Marjolaine Parent
Counsel for the Respondent: Louis Cliche
JUDGMENT
The appeal from the assessment made under the Excise Tax Act, notice of which is dated January 26, 1998, and bears number 973040001229G8, is dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 4th day of August 2000.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 12th day of October 2001.
Erich Klein, Revisor