Docket: 2011-851(GST)I
BETWEEN:
MARTIN PERRON,
Appellant,
and
HER MAJESTY THE QUEEN
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
____________________________________________________________________
Appeal
heard August 24, 2012, at Québec, Quebec
Before: The Honourable
Justice Paul Bédard
Appearances:
|
For the appellant:
|
The appellant himself
|
|
Counsel for the respondent:
|
Sylvain Lacombe
|
____________________________________________________________________
JUDGMENT
The appeal from the assessment made regarding
the Goods and Services Tax pursuant to Part IX of the Excise Tax Act for
the period of October 1, 2009, to December 31, 2009, is dismissed in accordance
with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 28th day of September 2012.
"Paul Bédard"
Translation
certified true
on this 10th day
of January2012.
Elizabeth Tan,
Translator
Citation: 2012 TCC 341
Date: 20120928
Docket: 2011-851(GST)I
BETWEEN:
MARTIN PERRON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Bédard J.
[1]
This is an appeal from
an assessment made pursuant to the Excise Tax Act (ETA) regarding the
Goods and Services Tax (GST).
[2]
On May 10, 2010, the
respondent, through the Minister of Revenue of Quebec (the Minister), assessed
the appellant with respect to Part IX of the ETA for the period of October 1,
2009, to December 31, 2009, and sent him a notice of assessment, dated that
same day.
[3]
As shown in the appellant's
notice of assessment, the amounts assessed are as follows:
|
Adjustments in
the calculation of the reported net tax
|
$2,685.75
|
|
Net interest
|
$18.28
|
|
Total [amount
owing]
|
$2,704.03
|
[4]
Specifically, the
adjustments of $2,685.75 in the calculation of the net tax reported by the
appellant, mentioned in the preceding paragraph, consist of the disallowance of
an input tax credit (ITC) in respect of a vehicle purchased by the appellant.
[5]
In making the
assessment, the Minister relied, inter alia, on the following findings
and assumptions set out in the Reply to the Notice of Appeal (the Reply):
[translation]
(a)
The appellant operates a welding business under
the name “Soudure Mobile Express”; (admitted)
(b)
During the period in question, the appellant was
a registrant for the purposes of applying the Goods and Services Tax
(hereinafter the GST) and an agent of the Minister for the purposes of
collecting and remitting the GST; (admitted)
(c)
On October 1, 2009, the appellant acquired a
2010 Ford F-250 4X4 vehicle, serial number 1FTSW2BR3AEA15143 (hereinafer the
vehicle); (admitted)
(d)
The appellant did not acquire the vehicle for
commercial purposes only; (denied)
(e)
The appellant does not personally own another
vehicle; (denied)
(f)
No mileage logbook was provided to the Minister;
(admitted)
Issue
[6]
Was the respondent
justified in disallowing the ITC in the amount of $2,6785.75 claimed by
the appellant in respect of the purchase of the vehicle?
Appellant's testimony
[7]
The appellant's
testimony essentially states that
(i)
in 2008, 2009 and 2010,
he worked for a welding company. The evidence showed that the appellant's
employment income was $54,294, $63,790 and $42,632 in 2010, 2009 and 2008,
respectively (see Exhibit I‑1, tab 3). The appellant explained that
his hours of work were from 7:00 a.m. to 3:00 p.m., 48 weeks per year. He
stated that in 2010 he went to work either in a Mazda 5 vehicle that he co-owned
with his spouse or on a motorcycle (Harley Davidson) that he had purchased in
April 2005 (see Exhibit A‑3);
(ii)
during 2008, 2009 and 2010,
he also operated a welding business. The appellant explained that he did not
have a welding workshop. He went to his clients to do the welding with the
vehicle and the trailer he pulled behind it to transport all the equipment
needed to do his work. The appellant also explained that his clients were in the
Quebec City and Beauce regions. The appellant testified that he operated his business
on weekends and some evenings. He also testified that in 2010, he worked 1,650 hours
as an employee and devoted 1,362 hours of his time to the business;
(iii)
the appellant's business
generated sales of $45,232, $32,794 and $66,629 in 2008, 2009 and 2010,
respectively (see Exhibit I‑1, tab 2);
(iv)
his spouse (an employment
advisor with the Carrefour jeunesse-emploi de la Capitale Nationale) has been
on maternity leave since November 15, 2009. The appellant explained that before
her maternity leave, they carpooled to work.
Appellant's theory
[8]
The appellant claimed
that he saw no point in keeping records to establish the commercial use of the
vehicle since it was used for commercial purposes 100% of the time. The
appellant claimed that he worked more than 3,000 hours per year, including approximately
1,300 hours on weekends and some evenings. Therefore, there was not much time
for him to use the vehicle (which, I note, could transport 6 passengers) for
personal or recreational purposes.
Analysis and conclusion
[9]
To be eligible for the
claimed ITC, the appellant had to demonstrate in this case that the vehicle was
used for commercial purposes more than 90% of the time.
[10]
The appellant's evidence
in this regard essentially rests on his testimony since for all practical
purposes, he did not provide any relevant information in support of his
testimony, not even a mileage logbook. I would also note that the appellant did
not provide an agenda detailing his business travel schedule. He did not
provide invoices for maintenance or gas either. At best, the appellant filed invoices
(Exhibit A‑5) that show he devoted about 355 hours to his business in
2010; I note that the appellant testified that he devoted about 1,300 hours to his
business in 2010.
Analysis and conclusion
[11]
It is possible to claim
that a vehicle was used solely for commercial purposes; however, the claim must
be plausible and likely. The burden of proof is greater when a vehicle can also
be used for personal reasons. I note that the vehicle was designed mainly to
transport six passengers. When a person decides to purchase a vehicle with
characteristics that might raise questions, that person must be careful,
vigilant and disciplined when using the vehicle, and be prepared with
convincing proof that the vehicle was used for commercial purposes more than
90% of the time. This is even more relevant in this case, as the appellant's
spouse was confined to the house since she did not have a vehicle to get around.
I note that the appellant testified that he used the Mazda 5 (at least in
winter) to get to work and that the vehicle was used solely for commercial
purposes. Having a record to rely on would have been very useful to clarify any
doubts. The alleged use could also have been confirmed with an agenda or even
invoices sent to a client. This relevant evidence could establish destinations
and the number of kilometres driven for commercial purposes in relation to the
total kilometres driven in a given year.
[12]
In this case, the
appellant failed to produce this relevant evidence, which he could have
produced and by which the facts might have been elucidated. He did not do so. I
infer from this that the evidence would not have been favourable. I do not
understand why the appellant only filed part of the invoices sent to clients in
2010; these invoices show that in 2010, he worked at most 355 hours of the
1,362 he claimed to have devoted to his business. He could have supported his
testimony about the hours devoted to his business in 2010 had he produced all
the invoices, and this would have also established the distance driven to see
his clients in 2010. This would have been possible with a simple reading of the
vehicle's odometer at the end of 2010, if all the kilometres driven had been
for commercial purposes. This relevant evidence he could have produced was even
more important because the explanations about needing a four-door vehicle with
two bench seats—to put equipment on them, sheltered from the cold—were not very
convincing.
[13]
Overall, the
appellant's testimony was not sufficient or adequate for the Court to find that
the appellant met his burden of proof.
[14]
For these reasons, the
appeal is dismissed.
Signed at Ottawa,
Canada, this 28th day of September 2012.
"Paul Bédard"
Translation
certified true
on this 10th day
of January 2012.
Elizabeth Tan,
Translator
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