Van
Der
Hoop,
J.
(orally);—The
appellants
appeal
from
a
conviction
on
three
counts
of
failing
to
comply
with
a
demand
from
the
Ministry
of
National
Revenue.
That
demand
was
made
pursuant
to
paragraph
231.2(1)(a)
of
the
Income
Tax
Act,
and
that
section
is
referred
to
in
the
information
filed
against
the
appellants.
The
relevant
portion
of
that
sub-section
provides:
Notwithstanding
any
other
provision
of
this
Act,
the
Minister
may
..
.
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act,
by
notice
served
personally
or
by
registered
or
certified
mail,
require
that
any
person
provide
within
such
reasonable
time
as
is
stipulated
in
the
notice,
(a)
Any
information
or
additional
information,
including
a
return
of
income
or
a
supplementary
return.
The
penalty
is
set
out
in
subsection
238(2),
which
provides
that
in
addition
to
any
penalty
otherwise
provided,
a
person
is
liable
on
summary
conviction
to
a
fine
of
not
less
than
$200,
and
not
exceeding
$10,000,
or
both
the
fine
and
imprisonment
for
a
term
not
exceeding
six
months.
Counsel
for
the
appellant
submits
that
the
Minister
proceeded
under
the
wrong
section.
Reference
is
made
to
subsection
150(2),
which
states:
Whether
or
not
he
is
liable
to
pay
tax
under
this
Part
for
a
taxation
year
and
whether
or
not
a
return
has
been
filed
under
sub-section
(1)
or
(3),
every
person
shall,
on
demand
from
the
Minister,
served
personally
or
by
registered
letter,
file
within
such
reasonable
time
as
may
be
stipulated
therein,
with
the
Minister
in
prescribed
form
and
containing
prescribed
information
a
return
of
the
income
for
the
taxation
year
designated
therein.
The
penalty
for
failing
to
comply
with
that
section
is
set
out
in
subsection
238(1),
and
consists
of
a
fine
of
not
less
than
$25
for
each
day
of
default.
The
first
question
is
whether
there
is
any
significance
in
the
fact
that
we
have
two
sections
which
in
part
provide
for
the
same
thing.
A
number
of
cases
have
been
referred
to
by
counsel,
but
in
only
one
of
them
was
this
particular
difference
considered,
and
that
was
by
the
dissenting
judgment
in
Attorney
General
of
Canada
v.
Cossette
(1967),
3
C.C.C.,
commencing
at
page
100.
The
majority
decision
in
that
case
held
that
it
was
not
necessary
for
the
purposes
of
that
appeal,
to
enter
into
the
question
of
the
difference
between
the
two
sections.
In
the
dissenting
judgment
of
Rivard,
J.,
a
reference
is
made
to
the
case
of
R.
ex
rel.
Poulin
v.
Gaulin
((1963),
40
C.R.
232
at
pages
243-44):
I
have
considered
the
relevant
sections
of
the
Act
and
by
construing
the
statute
as
a
whole
and
after
having
considered
its
object,
I
am
of
the
opinion
that
a
taxpayer's
obligation
to
file
a
return
of
income
in
the
ordinary
course
of
the
perception
of
the
revenue
as
and
when
required
by
s.
44
of
the
Act
that
is
the
equivalent
of
the
present
subsection
150(2),
and
more
particularly
by
subs.
(2)
of
the
said
section,
whereof
the
failure
to
accomplish
is
made
an
offence
under
s.
131(1),
is
an
obligation
distinct
from
that
which
is
imposed
upon
any
person
under
the
provisions
of
s.
126
of
the
Act
and
more
particularly
under
subss.
(2)
and
(6)
of
the
said
section,
which
is
the
equivalent
of
the
present
section
231.2,
whereof
the
contravention
or
the
non-compliance
with
is
made
an
offence
under
s.
131(1)
of
the
Act,
the
latter
offence
being
distinct
from
the
former,
as
it
refers
to
a
refusal
on
the
part
of
anyone
to
comply
with
the
requirement
issued
by
the
Minister,
in
the
course
of
a
genuine
and
serious
investigation
or
inquiry
into
tax
liability
to
furnish
the
information
therein
named
which
may
include
a
return
or
a
supplementary
return.
A
consideration
of
the
predecessor
of
subsection
231.2(1)
was
made
in
James
Richardson
&
Sons
Limited
and
Minister
of
National
Revenue,
[1984]
C.T.C.
345;
9
D.L.R.
(4th)
1,
at
page
351
(D.L.R.
9),
where
Madam
Justice
Wilson
for
the
court
stated:
The
very
presence
of
those
provisions
in
the
Act
serves,
in
my
view,
to
support
the
approach
taken
in
the
Canadian
Bank
of
Commerce
case
that
subsection
231(3)
is
only
available
to
the
Minister
to
obtain
information
relevant
to
the
tax
liability
of
some
specific
person
or
persons
if
the
tax
liability
of
such
person
or
persons
is
the
subject
of
a
genuine
and
serious
inquiry.
In
other
words,
the
same
conclusion
that
was
reached
by
the
dissenting
judge
in
the
Cossette
case.
At
trial,
in
the
court
below,
the
Crown
admitted
as
a
fact
that
the
returns
of
the
company
for
the
relevant
years
have
indicated
that
there
is
no
tax
payable
due
and
owing
by
that
company
for
those
years,
and
that
the
demands
that
were
made
of
the
company
by
the
tax
department
were
made
not
as
a
result
of
any
ongoing
investigation
into
the
affairs
of
Mr.
Skalbania
or
the
corporate
defendant,
but
merely
because
no
return
in
question
had
been
filed
when
it
was
due
and
owing.
The
learned
trial
judge
referred
to
the
James
Richardson
&
Sons
Limited
case,
and
stated
that
this
case
could
be
distinguished.
He
stated
at
page
13
of
the
transcript:
It
is
not
a
fishing
expedition
by
the
Minister
for
information
for
a
check
on
the
general
compliance
of
an
entire
class,
nor
is
it
for
information
leading
to
the
identity
of
the
group
of
investors.
It
is
a
demand
made
under
Section
231.2(1)(a)
of
the
Income
Tax
Act
covering
a
specific
named
individual
and
corporation
for
a
filing
of
Income
Tax
Returns
for
the
years
specified
in
the
Information.
Under
the
administration
and
enforcement
section
of
the
Act
the
demand
is
a
valid
and
proper
one
and
it
initiates
an
investigation.
With
respect,
I
conclude
that
the
learned
trial
judge
was
not
dealing
with
the
specific
issue
which
was
raised
before
him,
which
has
been
raised
again
on
this
appeal,
of
the
difference
between
the
two
sections.
The
Richardson
case
is
ample
authority
for
the
conclusion
that
section
231.2
is
available
to
the
Minister
to
facilitate
an
ongoing
and
serious
inquiry.
Subsection
150(2)
is
available
to
the
Minister
generally
to
demand
a
return
whether
or
not
a
tax
return
has
been
filed.
Since
the
demand
here
was
made
under
an
inapplicable
section,
the
conviction
cannot
be
sustained.
The
appeal
is
allowed
and
the
conviction
is
set
aside.
Appeal
allowed.
Email this Content