Docket: 2012-1247(IT)APP
BETWEEN:
JUSTIN HANSEN,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Application for
Extension of Time heard on common evidence
with the application of Justin Hansen 2012-1248(GST)APP
on
July 13, 2012 at Vancouver, British Columbia
Before: The Honourable
Justice J.E. Hershfield
Appearances:
|
For the Applicant:
|
The
Applicant himself
|
|
Counsel for the Respondent:
|
Mika Banerd (Student-at-Law)
Holly Popenia
|
____________________________________________________________________
ORDER
Having heard the parties with respect to an application by the Applicant for an Order extending
the time within which a Notice of Objection from the reassessments made
under the Income Tax Act for the 2006, 2007 and 2008 taxation
years may be served;
And having read the materials filed;
IT IS ORDERED THAT:
The application is dismissed, without costs, for the reasons set out in the attached Reasons for
Order.
Signed at Ottawa, Canada this 3rd day of May 2013.
"J.E. Hershfield"
Docket: 2012-1248(GST)APP
BETWEEN:
JUSTIN HANSEN,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Application for Extension of Time heard on common
evidence
with the application of Justin Hansen 2012-1247(IT)APP
on
July 13, 2012 at Vancouver, British Columbia
Before: The Honourable Justice J.E.
Hershfield
Appearances:
|
For the
Applicant:
|
The Applicant himself
|
|
Counsel for the
Respondent:
|
Mika Banerd (Student-at-Law)
Holly Popenia
|
____________________________________________________________________
ORDER
Having heard the parties with respect to an application by the
Applicant for an Order extending the time within which a Notice of Objection
may be served in respect of the assessment made under the Excise Tax Act, for the GST reporting period from January
1, 2006 to December 31, 2008.
And having read the materials filed;
IT IS ORDERED THAT:
The application is dismissed, without costs, for the reasons set out in the attached Reasons for
Order.
Signed at Ottawa, Canada this 3rd day of May 2013.
"J.E. Hershfield"
Citation: 2013 TCC 142
Date: 20130503
Dockets: 2012-1247(IT)APP
2012-1248(GST)APP
BETWEEN:
JUSTIN HANSEN,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Hershfield J.
[1] The Applicant was
assessed under the Income Tax Act (the “Act”) as having
unreported income for his 2006, 2007 and 2008 taxation years. Such assessment
also generated assessments (“GST”) under the Excise Tax Act (the “ETA”)
on the theory that the income was from the supply of taxable supplies in
respect of which GST was to be collected and remitted.
[2] The Respondent submits
that the applications are, pursuant to the express terms of the Act and
the ETA, statute barred and must be dismissed on that basis.
[3] I will not recite
the applicable sections of the applicable statutory provisions. The relevant
provisions of the Act were carefully reviewed in Court at the hearing
and the Applicant followed along acknowledging his understanding that there
were absolute filing deadlines that had to be adhered to in order to permit me
any leeway to grant the applications.
[4] The Applicant did
not dispute the time-lines that were sworn to in the affidavits of the officers
of the Canada Revenue Agency (the “CRA”). Those affidavits were taken as exhibits.
As well, an aid to the court time-line chart, reflecting the relevant dates for
each of the Act and the ETA as sworn to in the affidavits, was
presented and reviewed with the Applicant during the hearing.
[5] I am satisfied that
the Applicant knowingly conceded that his applications in both cases were past
the statutory deadlines and that accordingly I had no jurisdiction to allow
them.
[6] Nonetheless, he
felt aggrieved; perhaps rightfully so.
[7] I believe that had
a timely objection been filed, the assessments would likely have been reduced,
perhaps substantially. Assessments that review deposits and assume they are
income are like net worth assessments. It is a process that wields a blunt
instrument at the taxpayer creating presumptive damage from which a full
recovery for all but the most meticulous record keepers is difficult at best.
[8] I also believe his
story needs to be told. It is one that regrettably we hear all too frequently.
[9] The Applicant said
he and his wife talked to the auditor in charge of their case. On their last
visit he told the auditor he had no confidence in her abilities and wanted to
talk to her supervisor. He thought he was to go in for another meeting with her
supervisor. He believed that they were supposed to call him before they did an
assessment. However, that did not happen. He just received the assessment without
any further chance to prove that the assessment was ridiculous. He was being
assessed for “a hundred grand”
and yet he did not make enough money to support his family without borrowing
money from his father.
[10] I should mention here,
as well, that the Applicant’s wife was at the hearing. She made un-sworn
remarks to corroborate her husband’s story. Although she was never sworn-in, I want
to make it clear that I have little doubt that his story is true. Further, Respondent’s
counsel never objected to any aspect of their “complaint” whether given as
sworn testimony or not. In an informal procedure case dealing with a
self-represented party, I applaud such tolerance.
[11] In any event, the
Applicant’s complaint is not only that he was deprived of a fair hearing before
the assessment, but more specifically, he complains that the assessment was prematurely
assessed in impossibly high amounts. It took what he called “pay-day loans” to
buy groceries and added the loan amounts to his income. Presumably he was
suggesting that his pay went to repay his loans so the loans should not be
added to his income. The auditor, who the Applicant felt to be incompetent,
apparently did not feel that there were adequate records to prevent the bank deposits,
said to be pay-day loans, from being assessed as income. That process, as
asserted by the Applicant, resulted in the auditor coming up with ridiculous
gross income amounts.
[12] On the other hand, he
acknowledged that even if he did owe something it was not anywhere near the
amount assessed and it did not take into account the expense deductions he
would have been allowed as a subcontractor.
[13] I will now consider
the time frame after the issuance of the assessments.
[14] The Applicant raised
two points relating to this time frame. First,
he said he called the CRA and said he wanted to file a complaint against the
auditor. It seems nothing happened as a result of that call.
[15] Some time later he
said he got a statement of account that reduced the amount owing due to the
assessments in dispute. He felt satisfied then that he would have a chance to
straighten this out without a need to object.
[16] However, the date of
that statement reveals that it followed his late filed objections. What the
Applicant did not realize was that the filing of the objections automatically
generated the reduction in the balance owing on the preliminary assumption that
it was a valid objection. On review, the Minister determined that they were
statute barred and therefore the assessments were not capable of being in
dispute so the statements were revised again to show the balances owed as a
result of the assessments.
[17] Clearly, the
Applicant and his family are in financial straits as a result of these
assessments. Collection activity has already caused holdbacks of portions of
the family’s child tax benefits.
[18] Believing the
assessments were almost certainly high, I did what I have come to do recently
in sympathetic cases where access to justice seems to have been denied by application
of strict statutory deadlines; namely, I asked Respondent’s counsel to ask the
Minister to exercise the discretionary powers she has, particularly under the Act
– powers that I am not given. Not surprisingly, but regrettably, this request was
rejected. I will not re-iterate my concerns that as a matter of legal
construction of the Act such rejection may not accord with Parliament’s
purpose for giving her such powers. I have made that concern known in another
case. In Poulin v. The
Queen I suggested that the sequence of events contemplated
by the Act had to be that the Minister’s discretionary powers needed to
be exercised before a final determination was made by this Court. This sequence
avoids the possibility of a Court order effectively frustrating the Minister’s
discretionary powers going forward. If this Court says it is too late to apply
for an extension, can the Minister defy the Court order? On the other hand, I
have no problem in suggesting that the Minister can still relieve interest and
penalties as they are expressly provided for in subsection 220(3.1) of the Act
and subsections 281.1(1) and (2) of the ETA. That is, the application of
those provisions would not seem to me to contradict a Court order denying leave
to proceed with an objection per se.
[19] Regardless, while I
am sympathetic, this is not a case that gives me any basis for allowing the
applications. This Court has no jurisdiction to weigh matters that preceded the
assessments. While I am confident that the vast majority of CRA auditors are
competent, experience suggests some will get overly sceptical from time to
time. However, we must trust that they will always take a realistic approach to
these types of “blunt instrument” assessments. While I lack jurisdiction to
deal with such matters, I have to say that I would condemn an auditor who
ignored a taxpayer’s request for a meeting. The same would apply to a process that
does not follow-up on a complaint. Admittedly, the Respondent in this case was
not in a position at the hearing to respond to such issues raised by the
Applicant. Regardless, neither of these condemnations would assist the
Applicant before this Court.
[20] The best place for
the Applicant to look for assistance might be with the collections people at
the CRA. Tax debts can be settled. Perhaps the circumstances here warrant a
settlement. Alternatively, he may still seek a fairness review, at least in
respect of interest and penalties although my understanding is that the basis
for granting such relief is so pigeon-holed and regulated that simple, general,
concepts of “fairness” have regrettably lost a place in the system. The
reality, however, is that the machine that drives the country’s economy must be
efficient and effective without being encumbered by endless windows of
opportunity for review or appeal. Taxpayers, then, must be presumed to know how
to deal with disputed assessments within the time allowed by Parliament whether
same is thought to be ungenerous or not. Ignorance of such strict deadlines has
never been a safe-harbour in our system.
[21] In any event, I can
only consider matters that happened after the assessments. The undisputed
evidence is that the Applicant did not serve a notice of objection to any of
the subject assessments within the time frames allowed under either the Act
or the ETA.
[22] Accordingly, the
applications, under both the Act and the ETA, for all years, are
dismissed without costs.
Signed at Ottawa, Canada this 3rd day of May 2013.
"J.E. Hershfield"
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