Date: 20020506
Docket: 2001-333-ST-
BETWEEN:
SATYA PAL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
(Delivered orally at Toronto, Ontario on March
15, 2002 and subsequently edited as to form)
Bonner, T.C.J.
[1]
The Appellant appeals from an assessment under part 9 of the
Excise Tax Act. The appeal relates to the period from
January 1st, 1994, to December 31st, 1996. The issue is whether
the Minister of National Revenue properly assessed the Appellant
for net tax for that period. Penalties and interest are also
under appeal but they turn on the main issue.
[2]
The Appellant contends that during the period he was a small
supplier who was not a registrant and that by virtue of section
166 of the Act he was not required to collect and remit
GST on taxable supplies.
[3]
Section 166 of the Act provides where a person makes a
taxable supply other than a supply of real property by way of
sale, and the consideration or a part thereof for the supply
becomes due, or is paid before it becomes due at a time when the
person is a small supplier who is not a registrant, that
consideration or part thereof, as the case may be, shall not be
included in calculating the tax payable in respect of the
supply.
[4]
To succeed the Appellant must meet two conditions; first he must
not have been a registrant. No doubt he did register under the
Act at sometime before the beginning of the period covered
by the assessment. That was admitted. However, the Appellant
produced a letter dated October 23rd, 2001 sent to him by
Rob Wright, Commissioner of Customs and Revenue. That letter
reads in part: "We have approved your request to cancel your
Goods and Services Tax, Harmonized Sales Tax GST/HST
registration. Accordingly, effective December 31st, 1992 you
will no longer be registered for the GST/HST".
[5]
It is evident that the first condition is met.
[6]
The second condition is that the Appellant qualified at the
relevant time as a small supplier under subsection 148.1 of the
Act. That provision is somewhat long and it wouldn't
help to read it here and now. Anybody who wants can get it from
the statute.
[7]
The Appellant adduced no cogent evidence in this appeal which
establishes that the $30,000.00 limit as set out in subsection
148.1 was not exceeded. The onus was on the Appellant to
establish that he qualified for section 166 treatment and he
failed to discharge it. The Appellant's vague general
statements regarding the consideration which he earned just
won't do. The Appellant did not produce any sort of
comprehensive financial records of his business activities. It
seems clear that he did not keep any.
[8]
The evidence of Mr. Harper, the Revenue Canada auditor,
indicates that he based the GST assessment on the net worth
assessment made by Mr. Wright, the income tax auditor.
Although a net worth calculation is, for the reasons which I gave
in Mr. Pal's income tax appeal, a blunt instrument, the
calculation made here tends to show that Mr. Pal was in
receipt of undisclosed income. He had only one source, the taxi
cab rental operation.
[9]
The Appellant therefore failed to establish on a balance of
probabilities that the taxable supplies made by him fell below
the $30,000.00 limit. The appeal will therefore be dismissed.
Signed at Toronto, Ontario, this 6th day of May 2002.
"M.J. Bonner"
T.C.J.
COURT FILE
NO.:
2001-333(GST)I
STYLE OF
CAUSE:
Satya Pal and H.M.Q.
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
March 15, 2002
REASONS FOR JUDGMENT BY: The
Honourable Judge M.J. Bonner
DATE OF
JUDGMENT:
March 22, 2002
DATE OF REASONS
FOR
JUDGMENT:
May 6, 2002
APPEARANCES:
Agent for the
Appellant:
Manmohan Duggal
Counsel for the
Respondent:
Scott Simser
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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