Present:
Estey, Lamer, Wilson, La Forest and L'Heureux‑Dubé JJ.
on
appeal from the court of appeal for british columbia
Income
tax ‑‑ Offences ‑‑ Taxpayer convicted for failing to
comply with Minister's demand for information within the time specified ‑‑
Minister making second demand for the same information ‑‑ Taxpayer
convicted again for failing to comply with the demand ‑‑ Taxpayer's
failure to comply with a new demand for information constituting a new offence ‑‑
Income Tax Act, R.S.C. 1952, c. 148, ss. 231(3), 238(2).
Held: The
appeal should be allowed.
Statutes
and Regulations Cited
Income Tax Act, R.S.C. 1952, c.
148 [am. 1970‑71‑72, c. 63], ss. 231(3), 238(2) [am. 1973‑74,
c. 51, s. 21; 1974‑75‑76, c. 71, s. 13].
APPEAL
from a judgment of the British Columbia Court of Appeal (1985), 25 C.C.C. (3d)
381, 86 D.T.C. 6415, [1986] 2 C.T.C. 35, setting aside a judgment of the County
Court. Appeal allowed.
Corey
Stolte and D. J. Avison, for the appellant.
Gil
D. McKinnon and A. M. Ross, for the respondent.
The
following is the judgment delivered by
1. The Court‑‑We
are all of the view that the Court of Appeal erred in its interpretation of s.
231(3) of the Income Tax Act, R.S.C. 1952, c. 148 as amended. To
construe the subsection as permitting only one demand for information to be
made, as did the Court of Appeal, would be to permit the taxpayer to purchase
immunity from prosecution for non‑payment of tax by the payment of a
fine.
2. Failure
to comply with a demand within the time specified in the demand constitutes an
offence for which s. 238(2) provides a penalty. Since the purpose of ss. 231(3)
and 238(2), when read together, is not to penalize criminal conduct but to
enforce compliance with the Act, the purpose would be wholly defeated if the
Minister's power under s. 231(3) was exhausted after one demand had been made
and the taxpayer fined for non‑compliance.
3. Further
demands by the Minister create fresh time periods within which the taxpayer is
required to comply and fresh offences for non‑compliance within those
time periods for which he may be prosecuted. Any other interpretation would
have the effect of frustrating what is essentially a self‑assessment
system of taxation.
4. Accordingly,
the appeal is allowed, the judgment of the Court of Appeal set aside and the
conviction of the respondent restored.
Appeal
allowed.
Solicitor
for the appellant: Frank Iacobucci, Ottawa.
Solicitor
for the respondent: Gil D. McKinnon, Vancouver.
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