BETWEEN:
and
[OFFICIAL ENGLISH TRANSLATION]
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Appeal heard on June 22, 2005, at Québec, Quebec.
Before: The Honourable Justice François Angers
Appearances:
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JUDGMENT
The appeal from the assessment made under the Excise Tax Act, notice of which bears number 226654 and is dated September 10, 2004, for the period of September 1, 1999, to June 30, 2002, is dismissed in accordance with the attached Reasons for Judgment.
Signed at Edmundston, New Brunswick, this 16th day of August 2005.
Translation certified true
on this 14th day of February, 2006.
Garth McLeod, Translator
BETWEEN:
9050-8367 QUÉBEC INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
[1] This is an appeal from an assessment made on November 12, 2003, under the Excise Tax Act ("the Act"). Following an objection, a Notice of Reassessment was sent out on September 10, 2004. These assessments cover the period of September 1, 1999, to June 30, 2002 ("the period").
[2] 9050-8637 Québec Inc. ("9050") is a registrant for the purposes of the Goods and Services Tax (GST). During the period in issue, 9050 operated a convenience store with a service station under the business name Dépanneur Ouellet. It sold products such as groceries and gasoline at the store.
[3] In April 2003, Clément Bernier did an audit covering the period in issue on the Respondent's behalf. Certain discrepancies involving GST overpayments for September and October 1999 were noted, as were certain discrepancies involving excessive Input Tax Credit (ITC) claimed for the months of September, October and December 1999. For the period ending September 30, 1999, the auditor noticed that two identical ITC amounts of $4,040.73 had been claimed, and that one amount had been claimed twice.
[4] Further to the Notice of Objection submitted by 9050, the auditor noticed after a reconciliation of the tax accounts in the general ledger provided by the Appellant, that there were no discrepancies other than the discrepancy involving the $4,040.73 ITC for the period ending September 30, 1999, which the Appellant had claimed twice.
[5] 9050 is not contesting the fact that it twice claimed an ITC of $4,040.73 for the period ending September 30, 1999. The only ground for its appeal is that the assessment made on November 12, 2003, was not made within the period prescribed by the Act and thus could not be made against him.
[6] After he completed his audit, Mr. Bernier gave 9050's accountant a draft assessment with, explanations, dated July 23, 2003, inviting the Appellant to provide comments or new facts within 21 days of its receipt. After contacting the accountant to ask if he had any new facts to bring to his attention, and since the accountant told him that he did not have time to work on the matter, the auditor sent him a draft waiver to extend the limitation period. The waiver was not signed, and the Appellant's accountant told Mr. Bernier to close his file. The assessment in issue was therefore made on November 12, 2003.
[7] 9050's GST returns were filed monthly until the end of 1999. The deadline for filing the return for September 1999 was November 1, 1999. This is confirmed by the Appellant's return for the period of September 1 to September 30, 1999, which was adduced in evidence. But the form contains no indication of the date on which 9050's representative signed it. It does, however, show that the department received it on November 15, 1999.
[8] According to objections officer Alain Therrien, one can see from the Appellant's returns filed from January 31, 1998, to December 31, 2002, that the Appellant had to remit GST in all but four cases, including one in which a significant amount is indicated, that case being the period ending September 30, 1999. An earlier form indicates a $48.47 refund, and the September form indicates $2,086.34. Mr. Therrien later explained how it happened that the ITC was claimed twice. In his opinion, the Appellant should have questioned this error because it was obvious.
[9] Thus, the issue is whether the assessment made on November 12, 2003, is barred by a limitation period. The Appellant in the case at bar was required to file a return with the department for each of his filing periods within one month after the end of the filing period. Thus, it had to file its September 1999 return on November 1, 1999, which is the date indicated on the return form that the department in question provided the Appellant. However, based on the Appellant's return form, the department only received the return on November 15, 1999 (tab 8). That form should have been dated upon being signed by the person who had prepared it, but no date was entered. Subparagraph 298(1)(a)(i) of the Act describes the period in which an assessment under section 296 may be made. It reads:
Subject to subsections (3) to (6.1), an assessment of a person shall not be made under section 296
(a) in the case of
(i) an assessment of net tax of the person for a reporting period of the person
more than four years after the later of the day on or before which the person was required under section 238 to file a return for the period and the day the return was filed;
[10] In other words, this paragraph makes it possible to ascertain the date on which the four-year assessment limitation period begins. This date is the filing deadline or the date of actual filing, whichever is later. In the case at bar, the later of the dates is the date on which the return was filed with the department in question, namely November 15, 1999. If the return had been filed on or before the deadline, the later of the two dates would have been November 1, 1999. Thus, in the case at bar, the assessment had to be made within four years after November 15, 1999. Consequently, on November 12, 2003, the deadline for assessing the Appellant had not expired.
[11] This is the interpretation that the Federal Court of Appeal adopted in Gaétan Paquet v. Her Majesty the Queen, 2004 FCA 391, where Noël J.A. stated that subsection 298(1) could not be clearer, and I quote:
2 Under that provision, the limitation period begins on the day on which the person was required to file a return or the day on which the return was filed whichever is the later. The interpretation proposed by the Appellant would result in the limitation period running from the day on which he was required to file his return, regardless of the fact that he had yet to file it.
3 This interpretation requires that the clear and unequivocal wording of the provision be disregarded, something that the Court refused to do in Déziel v. Canada, [2004] F.C.J. No. 528, a decision which, incidentally, is binding on us.
4 It is worth adding that subsection 298(1) is part of a self-assessment regime whereby persons acquiring supplies for their own consumption must file a return. The Appellant, in complaining that the limitation period has yet to run in his case, is only alleging his own turpitude. Moreover, the interpretation which he proposes would encourage people not to file, a result which was obviously not intended.
[12] Counsel for the Appellant questioned whether the date of receipt indicated on the return form is genuine, contending that the department could have played with the date in order to give itself more time. No evidence was adduced that could cast doubt on the date, which in this instance is the filing date. In order for the department to have been able to play with the dates, it would have had to envisage a problem in making an assessment four years in advance. Thus, there is no basis for this argument.
[13] For the reasons set out above, I do not need to consider whether the Appellant made a misrepresentation attributable to his neglect, carelessness or wilful deceit. If it did, an assessment may be made at any time (see subsection 298(4) of the Act). Suffice it to say that in the case at bar, not only did the Appellant admit to the error that it made when it claimed an ITC of $4,040.73 twice for the period ending September 30, 1999, but the objections officer also testified, and the evidence showed, that this was a rather obvious error that should have caused the Appellant to question itself.
[14] For these reasons, the appeal is dismissed.
Signed at Edmundston, New Brunswick, this 16th day of August 2005.
"François Angers"
Angers J.
Translation certified true
on this 14th day of February, 2006.
Garth McLeod, Translator
DOCKET FILE NO.: 2004-4298(GST)I
STYLE OF CAUSE: 9050-8367 QUÉBEC INC. AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Québec, Quebec
DATE OF HEARING: June 22, 2005
REASONS FOR JUDGMENT BY: The Honourable Justice François Angers
DATE OF JUDGMENT: August 16, 2005
APPEARANCES:
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Counsel for the Appellant: |
Daniel Petit |
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Counsel for the Respondent: |
Gisèle Gauthier |
COUNSEL OF RECORD:
For the Appellant:
Firm: Petit Beaudoin Gaucher Robert Rousseau
& Vaillancourt, Charlesbourg, Quebec
For the Respondent: John H. Sims, Q.C.
Deputy Attorney General of Canada
Ottawa, Ontario