Dominion Stores Ltd. v. MNR, 66 DTC 5111, [1966] CTC 97 (Ex Ct)

The taxpayer issued trading stamps to the value of 1.5% of the price paid for merchandise at its retail food stores. When a customer had accumulated sufficient stamps, he could exchange them for "free gifts" of articles of the taxpayer listed in a catalogue.

The Crown unsuccessfully argued that no amount was received by the taxpayer for the trading stamps for purposes of s. 85B(1)(a)(i) of the pre-1972 Act (now s. 12(1)(a)(i)) with the result that no reserve could be claimed under s. 85B(1)(c). Cattanach J. stated (p. 5116):

"When two articles are sold together for one price without a price being put upon each separately, it does not follow that one article was free and that the price is attributable exclusively to the other article."

In finding that the taxpayer in fact received an amount in respect of the issuance by it of "free" trading stamps on the purchase of groceries by its customers, Cattanach J. stated (p. 5116):

"When two articles are sold together for one price without a price being put upon each separately, it does not follow that one article is free and that the price is attributable exclusively to the other article."