Citation: 2012 TCC 343
Date: 20120928
Docket: 2012-1909(GST)APP
BETWEEN:
SÉBASTIEN GIRARD (PRO GESTION 3000),
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR ORDER
Bédard J.
[1]
In this application the
applicant claims that he personally filed at the offices of the Canada Revenue
Agency (the Agency) within the time limit of 90 days prescribed by the Excise
Tax Act (the ETA) a notice of objection to the notice of assessment he had
received, but that the Agency lost the documents and therefore it was
impossible for him to act.
The issue
[2]
The Court must
essentially determine whether it believes the applicant's version that he
served the notice of objection within the time limit prescribed by the ETA, but
that the Agency lost the notice of objection.
The facts
[3]
On June 8, 2011, The
Minister of Revenue of Québec (the Minister) assessed the applicant regarding
Part IX of the ETA (for the period from January 1, 2008, to December 31,
2008) and sent him a notice of assessment on the same day (Exhibit R‑1).
[4]
On October 13, 2011, the
applicant filed an application for an extension of time in which to file a
notice of objection to the assessment dated June 8, 2011 (Exhibit R‑3).
In that application, counsel for the applicant stated the following:
[Translation]
Following
receipt of the notice of assessment issued by Revenu Québec and Revenu Québec
on behalf of the Canada Revenue Agency, our client filed in person at the
offices of Revenu Québec notices of objection to these notices of assessment
within the 90-day time limit prescribed by the Act.
Last
week, when our client followed up on his notices of objection, he was informed
that no trace of said notices had been found in the files of Revenu Québec. Consequently,
our client is considered as not having objected to the notices of assessment
that had been sent to him, and, at the time of this letter, it is too late to
do so despite the fact that he had taken the necessary measures in August 2011.
Accordingly,
we ask you to extend the time for objection in order to allow our client to
re-file his notices of objection to the assessments mentioned in the subject
line.
Our
client has serious grounds for defence to argue against his notices of
assessment. It is therefore in the interest of justice to allow him to file his
notices of objection even though the time limit for doing so has expired.
[5]
In a letter dated
February 2, 2012 (Exhibit R‑4), addressed to the applicant, the Minister
acknowledged receipt of the application for an extension of time and asked that
a copy of the notice of objection that the applicant claimed to have filed
within the 90-day time limit set out in the ETA and proof of mailing or filing
that notice be provided to him.
[6]
The applicant was
unable to provide the proof requested by the Minister in his letter dated
February 2, 2012. On April, 12, 2012, the Minister informed the applicant of
his decision to dismiss the application for an extension of time (Exhibit R‑4).
[7]
On May 14, 2012, that
is, within the prescribed time limit, the applicant filed with the Court an
application for an extension of time at issue in the case at bar. The relevant
paragraphs of this application read as follows:
[Translation]
3.
Following receipt of the notice of assessment
and within the objection time limit, namely, during the month of August 2011,
the applicant personally visited the offices of the Agence du revenu du Québec on
de Marly Street in Québec, in order to obtain information about the steps to
take in order to dispute that notice of assessment;
4.
A representative informed the applicant that he
needed to fill out a notice of objection and then drop it in a box provided for
that purpose at reception;
5.
The applicant filled out the notice of objection
in question on site on the same day and dropped it in the box that was shown to
him;
6.
At the beginning of October 2011, the applicant
contacted the Agency in order to follow up on his file;
7.
He learned at that time that no trace of his
notice of objection could be found in the Agency's file;
8.
The applicant then promptly mandated his counsel
to file the application for an extension of time, filed in support of this
letter as Exhibit R‑2;
9.
In a letter dated February 2, 2012, which was
filed in support of this application as Exhibit R-3, the Agency asked the
applicant to provide it with a copy of his notice of objection and with proof
of mailing and/or of receipt.
10.
The applicant informed the Agency through his
counsel that he was unable to provide any more documents given that he had
filled out the objection form on site and that he had dropped it immediately
into the box provided for that purpose and did not keep a copy, as it is stated
in the letter filed in support of this application as Exhibit R-4.
11.
The Agency still decided to dismiss the
applicant's application for an extension of time despite the fact that there
was no valid reason for it to doubt the truth of his allegations to the effect that
he had indeed filed a notice of objection within the prescribed time limit. The
Agency's decision is filed in support of this application as Exhibit R-5;
12.
In addition, as specified in the letter in
Exhibit R-4, it is highly unlikely that the applicant would have let the
objection period run out without doing anything since he was well aware of the
consequences of not doing anything given his bad experience with another file
related to this one;
13.
The applicant has good ground for defence to argue
and it would be a serious injustice if he were prevented from doing so
especially due to an administrative error.
Applicant's testimony
[8]
Essentially, the
applicant's testimony discloses the following:
(i)
Given his experience
with a related file, he knew that he had to object within the 90 days prescribed
by the ETA. Therefore, he personally went to the Agency's offices on de Marly
Street in Québec with his car, which he parked on de Marly Street in a space
where parking was authorized (for free) for a period of 60 minutes. On site, an
Agency clerk handed him a form prescribed for objections and told him that,
once the form is filled out, it should be dropped in a box provided for this
purpose at reception. The applicant explained that he had filled out the form
and dropped it in the box on August 29, 2011. The applicant filed in evidence a
copy of his planner for August 29, 2011 (where it is written [Translation] "Objection Revenu
Québec pers.") in support of his testimony that he had gone to the Agency's
offices in Québec to object to the notice of assessment (see Exhibit R-2). I
note that the applicant filed no other relevant evidence proving that he was in
Québec on August 29, 2011, even though he had had other activities in Québec on
that date. The applicant testified that he would have filed other relevant
evidence of his presence in Québec on August 29, 2011, if he had known that
that relevant evidence would have helped support his testimony. I note right
away that the letters from the applicant's counsel (Exhibits R-3 and R-5) and
the applications for an extension of time state that the notice of objection
had been filed in August 2011 without, however, specifying the day on which the
notice was filed. Regarding this, the applicant explained that the date of
August 29 had not been mentioned because only recently had he noticed in his
planner a note stating that he had objected to the notice of assessment on
August 29, 2011.
(ii)
Regarding the reasons
for objection, the applicant explained that the Minister had wrongly included
in his income from operating a business (snow removal from roofs) amounts from
a company of which he was a shareholder since the amounts were advances that
the company had given him.
Testimony of Julie Bisson
[9]
The testimony of Ms.
Bisson, Administrative Technician with the Agency, essentially discloses the
following:
(i)
After a thorough review
of the Minister's file, she noted that no notice of objection had been received
by the Minister. She also noticed that the Minister's files did not indicate
that the applicant had contacted the Agency in October 2011 to follow up on his
file as alleged at paragraph 6 of the application for an extension of time and
in the letter dated October 13, 2011 (Exhibit R-3);
(ii)
All notices of
objection filed at the Agency's offices on de Marly Street in Québec in the box
provided for that purpose were necessarily forwarded by the people responsible
for mail to the objections director, in accordance with departmental directive
D1A-32 (Exhibit I-6). Ms. Bission testified that occasionally the Agency did
temporarily misplace objection notices. She explained that these temporarily
misplaced notices of objections were all eventually forwarded to the director
of objections after a few months.
[10]
Furthermore, the
evidence showed that the applicant had not yet filed his tax returns for the
2010 and 2011 taxation years.
[11]
The Minister is of the
view that the application for an extension of time must be dismissed
essentially for two reasons:
(i)
The burden of proof was
on the applicant, who did not prove that he had filed the notice of objection
on August 29, 2011, as the applicant's evidence was based essentially on his
testimony, which the Minister considers not to be credible given the following
circumstances:
(1)
The applicant did not
keep relevant evidence showing that he had filled out and filed a notice of
objection despite the experience he had had with a related file;
(2)
The applicant is a tax
offender;
(3)
The letters from the
applicant's counsel and the applications for an extension of time state that
the notice of objection was filed in August 2011 but do not specify the day of
August on which that notice was filed. Counsel for the respondent maintains
that the applicant's explanation regarding this seems at the very least
questionable;
(4)
The applicant admitted
that he was able to provide other relevant evidence of the fact that he had
travelled to Québec on August 29, 2011. The applicant did not do so. Counsel
for the respondent argues that I must draw a negative inference from this
failure.
(ii)
The applicant did not
demonstrate that there are reasonable grounds for the appeal.
Analysis and conclusion
[12]
In this case, there are
two issues: the first is whether it was impossible for the applicant to act,
and the second is whether the applicant has demonstrated that there were
reasonable grounds for his appeal. In regard to the first point, namely, the
actual impossibility to act, the Court notes that this is a question of
credibility. In other words, is the applicant's version that he had filed his
notice of objection within the time limit prescribed by the ETA credible? The
Court noted no contradictions in the applicant's testimony. His testimony is
plausible. The applicant seems to be a credible person. The fact that he has
not yet filed his tax returns for the 2010 and 2011 taxation years is not in
itself a reason to reject his testimony. In fact, not filing his tax returns does
not automatically make the applicant a liar. The fact that he had failed to
file all of the relevant evidence (that he was able to file) in support of his
testimony to the effect that he was in Québec on August 29, 2011, does not
allow me to automatically draw a negative inference from that failure and thus reject
his testimony. The applicant still provided relevant evidence in support of his
testimony (in this case, Exhibit R-2). In the circumstances, that relevant
evidence seems sufficient to me to support his testimony. I believe the
applicant's testimony that he would have provided other relevant evidence if he
had known that it was indispensable to establishing his credibility. Finally,
the fact that the Minister did not find the notice of objection filed by the
applicant is not a good reason to reject the applicant's testimony. Automatically
rejecting the applicant's testimony on the ground that the Minister did not
find the notice of objection would ultimately obligate taxpayers to send their
notices of objection by registered mail. I note that the ETA does not obligate
taxpayers to proceed in this way. The fact that the Minister cannot find a notice
of objection merely obliges me to consider the applicant's testimony more
carefully but does not authorize me to reject it.
[13]
With regard to the
second point, the applicant's explanations regarding his grounds for objection appeared
to be based on reasonable grounds.
[14]
For these reasons, the
applicant's application is allowed.
Signed at Ottawa, Canada, this 28th day of September
2012.
"Paul Bédard"
Translation certified true
on this 9th day of November 2012
Margarita Gorbounova, Translator
Email this Content