Date: 19990506
Docket: T-1036-92
MONTRÉAL, QUEBEC, MAY 6, 1999
Before:RICHARD MORNEAU, PROTHONOTARY
Between:
LES MANUFACTURIERS DE BIJOUX LSM LTÉE,
Plaintiff,
AND
HER MAJESTY THE QUEEN,
Defendant.
JUDGMENT
The action in the case at bar is allowed. The defendant is ordered to repay the plaintiff the sum of $943.25 plus interest provided by the Act, with costs. This judgment is applicable mutatis mutandis to cases T-1518-92, T-1519-92, T-1520-92 and T-1521-92.
| Richard Morneau
Prothonotary |
Certified true translation
Bernard Olivier, LL. B.
Date: 19990506
Docket: T-1036-92
Between:
LES MANUFACTURIERS DE BIJOUX LSM LTÉE,
Plaintiff,
AND
HER MAJESTY THE QUEEN,
Defendant.
REASONS FOR JUDGMENT
RICHARD MORNEAU, PROTHONOTARY:
[1] By its action the plaintiff is seeking to recover a balance of $943.25 as a refund of federal sales tax on inventory following the introduction of the goods and services tax.
Background
[2] On or about February 8, 1991 the plaintiff made an application for refund of federal sales tax on inventory, claiming a refund of $30,489.62.
[3] After an audit the Minister of National Revenue ("the Minister") issued a notice of determination on August 20, 1991 by which he refunded the plaintiff the sum of $29,546.37.
[4] The Minister dismissed the part of the refund application covering Perrier brand gold watches, for lack of evidence as to payment of the federal sales tax on these watches.
[5] On or about August 23, 1991 the plaintiff filed a notice of objection to the Minister's notice of determination.
[6] On or about February 7, 1992 the Minister issued a decision dismissing the plaintiff's objection.
Analysis
[7] If the Court understands the position of the defendant in this matter correctly, the refund sought by the plaintiff was denied because in an on-the-spot audit the plaintiff could not produce evidence that it had purchased a number of gold watches from a related corporation.
[8] It appeared that the watches at issue were at all relevant times part of the plaintiff's inventory. In the limited context of this discussion, the evidence was that the plaintiff purchased these watches and did not manufacture them.
[9] The weight of the evidence also was that in the field of jewellery, items in gold - whatever they might be, watches, bracelets, chains and so on - are sold wholesale, " by weight", that is by
gram of gold. The evidence further showed that the invoices indicating these sales between a supplier and a jeweller do not show the jewellery sold item by item. Merchants simply list on these invoices the total weight in gold of all the jewellery which is the subject of a wholesale transaction.
[10] According to the evidence, there has never been any objection by the Minister or his officials to this method of invoicing by jewellers. Indeed, the same type of invoicing was allegedly used to persuade the Minister regarding other gold jewellery included in the inventory accepted by the Minister for purposes of the refund amounting to $29,546.37. I do not see why the Minister should draw the line and refuse to consider that the invoices submitted to his officials cannot be seen* as sufficient evidence of the purchase by the plaintiff of the watches in question, and so of proof of payment of the sales tax on inventory.
[11] I cannot accept the defendant's arguments that invoices such as Exhibit PA-3 represent only the purchase by the plaintiff of raw materials which went into the manufacture of gold watches, not the purchase of complete watches ready for sale. That is not how I understood the testimony of the plaintiff's president and that of Paul Cormier, who testified for the plaintiff as a jewellery wholesaler and supplier of the plaintiff.
[12] Accordingly, this action will be allowed. These reasons will apply to the actions brought jointly with the case at bar, namely cases T-1518-92, T-1519-92, T-1520-92 and T-1521-92. A copy of these reasons and of the judgment accompanying them will be included in each of the said records.
| Richard Morneau
Prothonotary |
MONTRÉAL, QUEBEC
May 6, 1999
Certified true translation
Bernard Olivier, LL. B.
FEDERAL COURT OF CANADA
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE No: T-1036-92
STYLE OF CAUSE:LES MANUFACTURIERS DE BIJOUX LSM LTÉE,
Plaintiff,
AND
HER MAJESTY THE QUEEN,
Defendant.
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: May 4, 1999
REASONS FOR JUDGMENT BY: RICHARD MORNEAU, PROTHONOTARY
DATE OF REASONS FOR JUDGMENT: May 6, 1999
APPEARANCES:
Gilles Boileau for the plaintiff
Francisco Couto for the defendant
SOLICITORS OF RECORD:
Gilles Boileau for the plaintiff
Saint-Jérôme, Quebec
Morris Rosenberg for the defendant
Deputy Attorney General of Canada