Citation: 2010 TCC 155
Date: 20100317
Docket: 2007-2609(GST)G
BETWEEN:
ROBERGE TRANSPORT INC.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
D'Arcy J.
[1]
The Appellant, Roberge Transport Inc.
(“Roberge”), has appealed from a reassessment by the Minister in respect
of Roberge’s GST reporting periods ending between June 1, 2002 and April 30,
2005.
[2]
The issue before the Court is whether $437,627
of reimbursements received by Roberge from third party operators of certain
trucks (referred to during the hearing as “lease operators”) were received as
consideration for a taxable supply.
Facts
[3]
Roberge is an interprovincial and international
(Canada/United States) livestock hauler. During the period at issue, it had at
its disposal a fleet of approximately 100 trucks and trailers which were
used to provide its services. The majority of the trucks were leased from
the lease operators. It also used trucks that it owned and, occasionally, it
used trucks owned by third party drivers. Roberge owned all of the trailers
used in its business.
[4]
The two witnesses who testified for the Appellant,
Mr. David Kiefer and Mr. Cecil Grassick, described the relationship
between Roberge and the lease operators. Their testimony was corroborated by
various documents filed by the parties, including the following:
·
Copies of leases entered into by Roberge and
certain lease operators.
·
Unit statements for a lease operator.
·
A payroll deduction letter issued by Roberge.
·
An information package provided to new lease
operators.
·
A Saskatchewan inter‑jurisdictional truck registration form.
·
Sample truck decals.
[5]
The relationship is summarized in the following
paragraphs.
[6]
The lease operators either owned or leased their
trucks. Each lease operator entered into a lease with Roberge pursuant to which
Roberge agreed to lease a truck (the “leased vehicle”) from the lease
operator. The monthly mileage of the leased vehicle determined the amount of
the monthly lease payment.
[7]
Once the lease was entered into, Roberge
registered the leased vehicle with the Saskatchewan government and obtained the required vehicle insurance. As part of
the registration process, Roberge took all necessary steps to ensure that the
leased vehicle could operate in numerous jurisdictions. This included
registering under the relevant inter‑jurisdictional programs for sales
tax and fuel tax and obtaining the necessary inter‑jurisdictional
registration forms (referred to as “Cap Cards”) and truck decals. Roberge
then provided the truck decals and copies of the Cap Cards to the lease operators.
[8]
In consideration for the various services it
provided to the lease operators, including registering the leased vehicle,
obtaining the required insurance, complying with the government programs
relating to sales taxes and fuel taxes, and purchasing the fuel used by the
lease operators, Roberge was paid a 1.5% administration fee. Further, the
lease operators agreed to bear the cost of all expenses pertaining to the
operation of the leased vehicle. This was accomplished, in part, by a lease operator
reimbursing Roberge for any expense that Roberge incurred in respect of the
leased vehicle. In particular, the lease operators reimbursed Roberge for
amounts paid by Roberge in respect of the following items:
·
Insurance
·
Registration fees
·
Fuel
·
Various incidental expenses
·
Fuel tax under an inter‑jurisdictional
vehicle program (the “inter‑jurisdictional fuel tax”)
·
Sales tax under an inter‑jurisdictional
vehicle program (the “inter‑jurisdictional sales tax”).
[9]
Roberge collected GST from the lease operators
in respect of the 1.5% administration fee and the reimbursements relating
to insurance, fuel purchased in Canada and incidental expenses incurred in Canada. It did not collect GST on the
reimbursements it received in respect of registration fees, fuel purchased in
the United States, incidental
expenses incurred in the United States, the inter‑jurisdictional fuel tax and the inter‑jurisdictional
sales tax.
[10]
The Canada Revenue Agency subsequently
reassessed Roberge for failure to collect GST on certain amounts including the
reimbursements of the inter‑jurisdictional fuel tax and the inter‑jurisdictional
sales tax. Roberge has appealed from the reassessment in respect of the
reimbursements of the inter‑jurisdictional fuel tax and the inter‑jurisdictional
sales tax.
[11]
Mr. Gary Frohlick, a member of the Revenue
Division of the Saskatchewan Department of Finance, testified for the Respondent.
He discussed the application of Saskatchewan fuel tax and sales tax to inter‑jurisdictional operators of
large vehicles. His testimony was supported by numerous government publications
and the applicable provincial legislation.
[12]
Canada’s provinces and most of the states in the
United States have jointly
developed a system that levies fuel tax and sales tax on inter‑jurisdictional
operators of large vehicles. A review of the legislative scheme in Saskatchewan illustrates how the system
operates in the various provinces and states.
Inter‑jurisdictional Fuel Tax
[13]
Section 4 of the Saskatchewan Fuel Tax Act
applies to inter‑jurisdictional carriers (such as trucks over a certain
size) and railways. The section applied to all of the trucks in Roberge’s
fleet. Section 4 requires fuel tax to be paid on fuel consumed in Saskatchewan, regardless of where the fuel
is purchased. This is accomplished by levying the fuel tax on fuel purchased in
Saskatchewan and other
jurisdictions under a program called the International Fuel Tax Agreement
(“IFTA”). Section 4 of the Saskatchewan Fuel Tax Act levies the inter‑jurisdictional fuel tax
on the person who has registered the vehicle that has consumed the relevant fuel
with the government.
[14]
Mr. Frohlick referred to the IFTA as an
association of member jurisdictions that includes nearly all of the Canadian
provinces and U.S. states. Its
purpose is to ensure that member jurisdictions receive the appropriate fuel tax
for fuel consumed in their jurisdictions, regardless of where the fuel is
purchased.
[15]
Mr. Frohlick illustrated the operation of the
inter‑jurisdictional fuel tax regime by using the example of a carrier
who operates a vehicle in Alberta and Saskatchewan when the Saskatchewan fuel tax is fifteen cents per litre and the Alberta fuel tax is nine cents per litre.
[16]
If the carrier purchases the fuel in
Saskatchewan and consumes the fuel in a truck driven exclusively in Alberta, it would pay fuel tax of nine
cents per litre:
·
Saskatchewan fuel tax of
fifteen cents per litre would be paid at the time the carrier purchases
the fuel in Saskatchewan.
·
Under the IFTA, the Saskatchewan government
would transfer nine cents per litre of the tax included in the purchased price
of the fuel to the Alberta government and would refund the remaining six cents
per litre to the carrier.
[17]
The nine cents per litre of tax received by the
Alberta government is levied under the relevant Alberta fuel tax legislation.
[18]
Alternatively, if the carrier purchases the fuel
in Alberta and consumes it in a
truck that is driven exclusively in Saskatchewan, it would pay fuel tax of fifteen cents per litre:
·
Alberta fuel tax of nine cents per litre would
be paid by the carrier at the time the carrier purchases the fuel in Alberta.
·
Under the IFTA, the Alberta government would transfer the nine cents per litre of tax included
in the purchased price of the fuel to the Saskatchewan government. Saskatchewan would then collect, under the IFTA, six cents per litre from the
carrier (i.e. the inter‑jurisdictional fuel tax).
[19]
The fifteen cents per litre of tax received by
the Saskatchewan government is levied under the Saskatchewan Fuel Tax Act.
[20]
All of the provinces and states that are members
of the IFTA use this system. Inter‑jurisdictional carriers are required
to register under the IFTA program in their home state or province. The carrier
receives an IFTA license and decal for each truck it registers. The license
must be kept in the truck and the decal is placed on the outside of the truck.
[21]
Roberge ensured that all vehicles in its fleet,
including the leased vehicles, complied with the IFTA program. It registered
all of the leased vehicles under the IFTA program, obtained the required
licenses and decals (which it provided to the lease operators), filed the
quarterly IFTA fuel tax return and remitted any inter‑jurisdictional fuel
tax payable in respect of its fleet.
[22]
Roberge used a single consumption factor
(average kilometres driven by the Roberge fleet per litre of fuel consumed)
when calculating the inter‑jurisdictional fuel tax liability for its
fleet. It applied this factor to the total kilometres driven by the fleet in
each province or state and the fuel tax rate for each province or state.
[23]
In addition to paying the inter‑jurisdictional
fuel tax, Roberge provided its drivers with credit cards. The drivers used the
credit cards to purchase fuel for the leased vehicles.
[24]
As noted previously, the lease operators
reimbursed Roberge for the amounts paid by Roberge for the purchased fuel and
the inter‑jurisdictional fuel tax.
Inter‑jurisdictional Sales
Tax
[25]
The inter‑jurisdictional sales tax is
similar to the inter‑jurisdictional fuel tax; its purpose is to ensure
that member jurisdictions receive sales tax revenue on the basis of the use of
a vehicle in their jurisdiction.
[26]
Sales tax on inter‑jurisdictional vehicles
is levied under sections 5.1 to 5.8 of the Saskatchewan Provincial Sales Tax Act.
In particular, under section 5.3 of the Saskatchewan Provincial Sales Tax Act, the tax is levied on every person
who licenses an inter‑jurisdictional vehicle for use in Saskatchewan and one or more member
jurisdictions.
[27]
The tax is not paid at the time the vehicle is
purchased, but rather is paid annually on the basis of a depreciated value of
the vehicle, as determined under the Saskatchewan Provincial Sales Tax Act. Once it collects the sales tax
from the operator of the inter‑jurisdictional vehicle, Saskatchewan distributes the tax to the
various jurisdictions based upon the mileage data provided by the operator of
the vehicle.
[28]
Mr. Frohlick testified that this system is used
by every province and state in North America. For example, an operator located
in Saskatchewan whose trucks
haul freight to Texas would register in Saskatchewan and receive a registration card (and decal) showing Texas as an authorized jurisdiction. The
Saskatchewan operator would report the mileage its trucks travelled in Texas to the Saskatchewan government, who
would then transfer a portion of the sales tax it has collected from the
operator to the Texas taxing
authority.
[29]
Roberge would annually register all of its
vehicles with the Saskatchewan
government. A Saskatchewan
government entity, SGI, administered the registration of all vehicles in Saskatchewan. In addition to vehicle
registration, SGI also supplied automobile insurance and administered the inter‑jurisdictional
sales tax.
[30]
As part of the registration process, Roberge
would provide SGI with the mileage its fleet travelled in each reciprocal
jurisdiction in the prior year. SGI would then use this information to
determine the insurance premiums, registration fees and inter‑jurisdictional
sales tax payable by Roberge.
[31]
SGI would not issue the registration for a
vehicle (including any new plates) until Roberge paid all amounts owing in
respect of the insurance premiums, registration fees and inter‑jurisdictional
sales tax.
Law
[32]
The GST is levied under four separate and
distinct divisions of Part IX of the Excise Tax Act (the “GST Act”):
Division II, Division III, Division IV, and Division IV.1. This appeal is only
concerned with the tax levied under Division II.
[33]
Division II tax is imposed on every recipient of
a taxable supply that is made in Canada.
During the relevant periods, the tax was levied on the value of the
consideration for the supply at three rates: the 7% GST rate for supplies that were
made in a province that had not harmonized its sales tax with the GST, the 15% HST
rate for supplies that were made in a province that had harmonized its sales
tax with the GST,
and the 0% rate for taxable supplies that are included in Schedule VI of the GST
Act.
[34]
In order to determine the amount, if any, of
Division II tax exigible, the following questions must be answered:
·
Did the supplier make a taxable supply?
·
What was the amount of the consideration for the
supply?
·
Was the taxable supply made in Canada?
·
Was the taxable supply made in a participating
province?
[35]
A taxable supply is defined as a supply made in
the course of a commercial activity.
[36]
A supply is defined as the provision of property
or services in any manner including sale, transfer, barter, exchange, license,
rental, lease, gift or disposition.
The words property and services are also defined in the GST legislation. Property is
defined to mean any property, whether real or personal, movable or immovable,
tangible or intangible, corporeal or incorporeal, and a right or interest of
any kind whatever but not including money. A service is defined even more
broadly to mean anything other than property, money and certain services
supplied to an employer by an employee, an officer and certain other persons. The definition
of service is extremely broad. If something is not property, money or an
“employee service”, then it will be deemed to be a service.
[37]
As a result of the broad definitions of supply,
property and services, the provision of anything in the course of a
commercial transaction will potentially be subject to tax.
[38]
A supply will constitute a taxable supply if it
is made in the course of a commercial activity. Commercial activity of
a person is also broadly defined to include a business of a person or adventure or
concern of a person in the nature of trade subject to two exceptions. In the
first instance, a business or adventure or concern in the nature of trade
will not constitute a commercial activity to the extent it involves the making
of exempt supplies. The second exclusion, which is not relevant for
purposes of this appeal, relates to certain activities carried on by
individuals directly or indirectly without an expectation of profit.
[39]
Tax is imposed under subsections 165(1) and (2) “on
the value of the consideration for the supply”. If no consideration is payable
(actual or deemed), then no tax is payable under section 165. Further, an
amount payable must be payable for a supply before it will acquire the
character of consideration. Accordingly, amounts payable as taxes, fines or
gifts (from governments or other persons) are not consideration, as they are
not paid in respect of a supply.
[40]
In most instances, the broad definition of
services, when combined with the definition of property, results in
reimbursements or charge-backs being subject to GST.
[41]
Reimbursements and charge-backs normally arise
when a person agrees to incur an expense on the understanding that a third
party will reimburse the person for the amounts it has expended when incurring
the expense. The payment of the reimbursement is not a gratuitous payment; it
is paid in exchange for something. That something is the person’s agreement to
incur the expense. In short, by agreeing to incur the expense, the person
has provided something to the third party. The person has made a supply. The
reimbursement constitutes the consideration for the supply.
[42]
The reimbursement or charge-back may also be
part of the consideration for the supply of various services and property. For
example, consider the provision of legal services by a lawyer. The lawyer
normally agrees to provide such services on the understanding that his/her
client will pay an hourly rate and will also agree to reimburse the lawyer for
any out-of-pocket expenses the lawyer has incurred (i.e., the cost of
certain inputs incurred to provide the service). The consideration for the
supply of the legal services is the total of the fee based on the hourly rate
and the amount paid to reimburse the lawyer for his inputs.
[43]
It is important to distinguish reimbursements
and charge-backs from monies paid by a principal to its agent, in respect of
amounts expended by the agent on behalf of the principal. As counsel for the Respondent
noted in her argument, when an agent is acting for a principal when acquiring
property or a service from a third party supplier, the agent is not providing
property or a service to its principal, but is merely acting as a conduit.
[44]
Tax under Division II is only exigible on the
consideration for a taxable supply, if the supply was made in Canada. Section 142 provides rules for
determining whether a supply of a specific property or service is made inside
or outside of Canada. For example,
paragraph 142(1)(g) provides that a supply of a service will be deemed
to be made in Canada if it is performed in whole or part in Canada, and
paragraph 142(1)(a) provides that the sale of tangible personal property
will be deemed to be made in Canada if the property is delivered or made
available in Canada.
Application of the law to the
facts
[45]
Before applying the law to the facts, I will
address a procedural issue raised by the Respondent.
[46]
Counsel for the Respondent argued that the issue
of whether Roberge acted as the agent for the lease operators has not been properly
raised before the Court. She argued that since the Appellant was a
specified person as defined in subsection 301(1), the Appellant was
required to raise the issue of agency in its Notice of Objection in order to
bring the issue before the Court in accordance with subsections 301(1.2) and
306.1(1).
[47]
Counsel for the Appellant argued that this issue
had previously been addressed by the Court and, as a result, that I was functus
officio. He was referring to the granting by Sheridan J. of a motion
brought by the Appellant to allow it to file an amended Notice of Appeal. The
sole reason for filing the Amended Notice of Appeal was to incorporate the
agency argument.
[48]
I agree with counsel for the Appellant. The
granting of the motion by Sheridan J. constituted a final decision of this
Court with respect to the ability of the Appellant to raise the agency issue.
Did Roberge make a taxable
supply?
[49]
Roberge’s activities with respect to the hauling
of livestock constituted a business under the GST Act. Further, it does
not appear that any of the activities at issue in this appeal constituted
exempt supplies. As a result, if the activities at issue, which all occurred in
the course of Roberge’s business, constituted a supply, the supply was made in
the course of a commercial activity and thus was a taxable supply.
[50]
Roberge agreed to provide a range of services
and property to the lease operators, including fuel, the right to use the Cap
Cards and truck decals, the service of obtaining the required vehicle
insurance, the service of registering the leased vehicles and the service of
complying with the government programs relating to the inter‑jurisdictional
fuel tax and the inter‑jurisdictional sales tax. The provision
of this range of property and services constituted the supply of property and
services by Roberge to the lease operators.
[51]
Counsel for the Appellant argued that Roberge
did not provide anything to the lease operators in respect of the inter‑jurisdictional
fuel tax and the inter‑jurisdictional sales tax. He argued that the
reimbursements were in respect of amounts paid by Roberge as agent for the
lease operators.
[52]
The evidence before the Court does not support
such a finding.
[53]
The following definition of agency, by Gerald
Fridman, has been quoted and applied in a number of Canadian cases:
Agency is the relationship that exists between two
persons when one, called the agent, is considered in law to represent the
other, called the principal, in such a way as to be able to affect the
principal's legal position by the making of contracts or the disposition of
property.
[54]
In view of this definition, the issues in this
appeal are, as noted by counsel for the Respondent, whether the lease operators
were liable under the relevant taxing schemes to pay the inter‑jurisdictional
fuel tax and inter‑jurisdictional sales tax and whether, having that
liability, they entered into an agency agreement with the Appellant to pay the
taxes on their behalf.
[55]
As the person who registered the leased vehicle
with the Saskatchewan government under the IFTA program, Roberge was the person
who was liable, under section 4 of the Saskatchewan Fuel Tax Act, for the inter‑jurisdictional fuel tax.
[56]
Similarly, the inter‑jurisdictional sales
tax provided for in sections 5.1 to 5.8 of the Saskatchewan Provincial Sales
Tax Act was levied on the person who licensed the inter‑jurisdictional
vehicle for use in Saskatchewan and one or more member jurisdictions. Since
Roberge, as either owner or lessee of the trucks, was the person who
licensed the trucks, it was the person who was liable to pay the inter‑jurisdictional
sales tax.
[57]
The method employed by Roberge to calculate the
amount of tax payable appears to be predicated on the assumption that it was
the person liable for the tax. The inter‑jurisdictional fuel tax was
calculated on the basis of the average consumption of fuel by the fleet; it was
not based upon fuel consumed by individual lease operators. Similarly, the
inter‑jurisdictional sales tax was calculated based upon the mileage the
entire Roberge fleet traveled in each jurisdiction.
[58]
Further, there was no evidence before the Court
that the lease operators intended to appoint Roberge as their agent to pay the
taxes. While Mr. Kiefer and Mr. Grassick testified that they expected
Roberge to pay the relevant taxes, they did not provide any evidence indicating
that they intended to have Roberge pay the taxes as their agent. This is not
surprising since the liability to pay the taxes rested with Roberge, not the
lease operators.
What was the consideration for
the supply by Roberge to the lease operators?
[59]
It is clear from the testimony of the
Appellant’s witnesses, Mr. Kiefer and Mr. Grassick, that, in exchange
for Roberge’s agreeing to provide the property and services, the lease
operators agreed to pay the 1.5% administration fee and reimburse Roberge for
any expenses it would have incurred personally in the course of providing
the services and property.
[60]
Their testimony was supported by various
documents filed by both of the parties. These documents included lease
agreements between Roberge and certain lease operators, unit statements
prepared for certain lease operators, the payroll deduction letter issued by
Roberge to the lease operators and the information package provided by Roberge
to new lease operators. These documents, together with the testimony of Mr.
Kiefer and Mr. Grassick, clearly show that the 1.5% administration fee
together with the reimbursements, constituted the consideration for the various
supplies made by Roberge to the lease operators. Such consideration was
subject to GST to the extent the consideration related to supplies that were
made in Canada.
[61]
Counsel for the Appellant argued that the
amounts paid as reimbursements of the inter‑jurisdictional fuel tax and
the inter‑jurisdictional sales tax were paid on account of taxes and thus
were not consideration. I disagree. The amounts represented taxes when
paid by Roberge to the Province of Saskatchewan; however, as counsel for the
Respondent correctly noted, the character of the payment changed when the
amounts were paid by the lease operators to Roberge. The amounts were not paid
by the lease operators to Roberge as taxes (Roberge is not a governmental body that
can levy taxes) but rather were paid as part of the consideration for the
taxable supplies made by Roberge to the lease operators.
[62]
Counsel for the Appellant also argued that it
was not reasonable to conclude that the amounts paid as a reimbursement of the
inter‑jurisdictional fuel tax and sales tax constituted consideration for
the services provided by Roberge. He argued that the reimbursement of
approximately $213,000 in respect of the fuel tax related to approximately 48
hours of work. It was counsel’s position that it was not realistic to
conclude that Roberge was charging approximately $4,437.50 per hour for
the services it rendered.
[63]
This argument failed to take into account the
substantial expenses incurred by Roberge in the course of making the supplies
to the lease operators. It would have been unreasonable for Roberge to charge a
consideration (the 1.5% administration fee) that did not take into account
the substantial expenses it had incurred in the course of providing its
services.
[64]
One would expect Roberge to charge a
consideration that allowed it to recover its costs plus earn a small profit. This
is exactly what it did by charging a consideration equal to the 1.5% administration
fee plus the amount of its out‑of‑pocket expenses (i.e. the
reimbursements).
Was the taxable supply of the
property and services made in Canada?
[65]
Roberge correctly collected GST on a portion of
the consideration, the 1.5% administration fee and the reimbursements in
respect of the insurance, fuel purchased in Canada, and incidental expenses
incurred in Canada. It did not,
however, collect GST on the remaining reimbursements.
[66]
I have assumed that the GST was not collected on
the reimbursements relating to the fuel purchased in the United States and the incidental expenses
incurred in the United States on the basis that the underlying supplies were
made outside of Canada.
[67]
It is clear, however, that the underlying
supplies in respect of the inter‑jurisdictional fuel tax and the inter‑jurisdictional
sales tax were made in Canada,
since the related services (the administration of the programs) were performed
in Canada. As a result, Roberge
should have collected GST on the reimbursements made by the lease operators in
respect of the inter‑jurisdictional fuel tax and the inter‑jurisdictional
sales tax.
Due Diligence Defence
[68]
Counsel for the Appellant argued that the
Appellant exercised the proper degree of diligence with respect to determining
whether it “could satisfy the GST”. He referred the Court to the conduct of Mr.
Kiefer. It was counsel’s position that it was reasonable to conclude that Mr.
Kiefer exercised the degree of diligence necessary for a controller who works
for a trucking company. In making this argument, he noted that all taxing
statutes are fairly complex, Mr. Kiefer was required to consider the relevant
legislation for the inter‑jurisdictional fuel tax and the inter‑jurisdictional
sales tax, he had obtained advice from third party accountants, and the Canada
Revenue Agency has no bulletin with respect to the inter‑jurisdictional
fuel tax and the inter‑jurisdictional sales tax.
[69]
It appears to me that, although not specifically
referred to in the Amended Notice of Appeal or in counsel’s closing argument,
the Appellant is attempting to raise the due diligence defence with respect to
the 6% penalty that it was assessed under former paragraph 289(1)(a)
of the GST Act. The basis for his due diligence argument appears to be a
reasonable mistake of law.
[70]
Counsel for the Appellant did not refer to any
jurisprudence to support his argument.
[71]
In Pillar Oilfield Projects Ltd. v. Canada,
Bowman J. (as he then was) held that paragraph 280(1)(a) of the Act
creates a strict liability offence and that the only available defence is one
of due diligence.
[72]
The principles governing the defence of due
diligence were set out by the Federal Court of Appeal in Corp. de l’École Polytechnique
v. Canada as follows:
The due diligence defence allows a
person to avoid the imposition of a penalty if he or she presents evidence that
he or she was not negligent. It involves considering whether the person
believed on reasonable grounds in a non-existent state of facts which, if it
had existed, would have made his or her act or omission innocent, or whether he
or she took all reasonable precautions to avoid the event leading to imposition
of the penalty. See The Queen v. Sault Ste-Marie, [1978] 2 S.C.R. 1299, The
Queen v. Chapin, [1979] 2 S.C.R. 121. In other words, due diligence excuses
either a reasonable error of fact, or the taking of reasonable precautions to
comply with the Act.
[73]
In their decision, the Federal Court of Appeal
conducted a short review of the principles applicable to mistake of law and
reached the following conclusion:
Apart from exceptions, mistakes in good
faith and reasonable mistakes of law as to the existence and interpretation of
legislation are not recognized as defences to criminal offences, nor to strict
liability offences or prosecutions governed by the rules applicable in strict
liability. However, two exceptions to the principle should be noted: officially
induced mistake of law and invincible mistake of law.
[74]
Officially induced mistake of law arises where an
accused has reasonably relied upon the mistaken legal opinion or advice of an
official who is responsible for the administration or enforcement of the
particular law. Invincible mistake of law refers to mistakes which are
impossible to avoid because it was impossible for the person charged to know
the law, either because it had not been promulgated or because it was not
published in a satisfactory way so that its existence and contents could be
known.
[75]
Counsel for the Appellant did not argue that
either an officially induced mistake of law or an invincible mistake of law
occurred. Further, the Appellant did not offer any evidence to support
such a finding.
[76]
The error made by the Appellant related to the
interpretation and application of the law to the facts. As previously
discussed, a mistake of law as to the existence and interpretation of
legislation is not recognized as a defence to strict liability offences.
[77]
In addition, in light of the fact that the Appellant
correctly collected tax in respect of certain of the reimbursements, it does
not appear to me that the Appellant acted reasonably when it failed to collect
tax in respect of the reimbursements of the inter‑jurisdictional fuel tax
and the inter‑jurisdictional sales tax.
Conclusion
[78]
For the foregoing reasons, the Appellant’s
appeal with respect to its GST reporting periods ending between June 1, 2002
and April 30, 2005 is dismissed with costs to the Respondent.
Signed at Ottawa, Canada, this 17th day of March 2010.
“S. D’Arcy”
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