The taxpayer leased railway cars for the purpose of transporting potash from Saskatchewan to British Columbia for unloading and export, with most of the rail cars returning empty to Saskatchewan to be loaded again. S.21(1)(b) of the Social Service Tax Act (BC) imposed tax on "a person who uses in British Columbia in the course of the person's business, whether or not the person's business is carried on in British Columbia, tangible personal property that the person has leased, as lessee".
This provision was found not to apply to the appellant on the ground that it was the railways and not the appellant that had possession of the rail cars while they were in British Columbia, and that while the rail cars were leased to the appellant, they were not used by it in the Province of British Columbia.
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