Date: 20110308
Docket: A-311-10
Citation: 2011 FCA 89
CORAM: BLAIS C.J.
SHARLOW J.A.
STRATAS J.A.
BETWEEN:
CANADA
REVENUE AGENCY
Appellant
and
TELE-MOBILE COMPANY
PARTNERSHIP,
TELUS COMMUNICATIONS COMPANY PARTNERSHIP,
TELUS COMMUNICATIONS INC., 1219723
ALBERTA LTD.
AND MTS ALLSTREAM INC.
Respondents
Heard at Toronto,
Ontario, on March 8, 2011.
Judgment delivered from the Bench at Toronto, Ontario, on March 8, 2011.
REASONS FOR JUDGMENT OF THE COURT BY: STRATAS
J.A.
Date: 20110308
Docket: A-311-10
Citation:
2011 FCA 89
CORAM: BLAIS
C.J.
SHARLOW
J.A.
STRATAS
J.A.
BETWEEN:
CANADA
REVENUE AGENCY
Appellant
and
TELE-MOBILE COMPANY PARTNERSHIP,
TELUS COMMUNICATIONS COMPANY PARTNERSHIP,
TELUS COMMUNICATIONS INC., 1219723
ALBERTA LTD.
AND MTS ALLSTREAM INC.
Respondents
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Toronto, Ontario,
on March 8, 2011)
STRATAS J.A.
[1]
This is an appeal from an order of Justice Zinn
of the Federal Court: 2010 FC 839.
[2]
The Federal Court judge dismissed a motion
brought by the Canada Revenue Agency (“CRA”). In its motion, CRA moved to
strike an application brought by the respondents (collectively “TELUS”) on the
ground that it is plain and obvious that the application has no possibility of
success.
[3]
In its application, TELUS seeks to prohibit the
CRA from issuing assessments against TELUS for goods and services tax (“GST”)
on the international roaming fees charged by TELUS to its customers from
October 2004. TELUS asserts that if it is assessed for GST, unfair and onerous
obligations and financial hardships would be visited upon it.
[4]
We note that if prohibition is granted because
of these alleged consequences, the Minister cannot issue an assessment – in
effect, as a matter of law, the Minister will be obligated to forgive a tax
liability that he believes is present, solely because of alleged hardships that
the taxpayer will suffer.
[5]
In our view, that cannot be. The Court cannot
stop the Minister from carrying out his statutory duty under the Excise Tax
Act, R.S.C. 1985, c. E-15, subsection 275(1) to assess GST payable by law
merely because doing so will impose unfair and onerous obligations and financial
hardships upon the taxpayer.
[6]
To the extent that CRA has exercised its
discretion in a manner that has improperly caused TELUS damage, TELUS may have
other recourses available to it. To the extent that the exercise of discretion
affects the amount of tax owing, TELUS may challenge the assessment in
accordance with Part IX of the Excise Tax Act, R.S.C. 1985, c. E-15.
Alternatively, it may apply for a remission order under section 23 of the Financial
Administration Act, R.S.C. 1985, c. F-11. Further, it may be able to bring
an action in tort to obtain compensation for any damages that were caused by
CRA.
[7]
In our view, for the foregoing reasons, it is
plain and obvious on the facts alleged in the notice of application that
TELUS’s application for prohibition cannot succeed.
[8]
Therefore, the appeal will be allowed, the order
of the Federal Court will be set aside and the application for prohibition will
be struck out, all with costs to the CRA both here and below.
"David Stratas"
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-311-10
(APPEAL FROM AN ORDER OF THE HONOURABLE
MR. JUSTICE ZINN, DATED AUGUST 25, 2010, IN FEDERAL COURT FILE NO. T-990-09)
STYLE OF CAUSE: CANADA
REVENUE AGENCY v.
TELE-MOBILE COMPANY PARTNERSHIP, TELUS
COMMUNICATIONS COMPANY PARTNERSHIP, TELUS
COMMUNICATIONS INC., 1219723 ALBERTA LTD. AND MTS ALLSTREAM INC.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: March 8, 2011
REASONS FOR JUDGMENT
OF THE COURT BY: (BLAIS C.J., SHARLOW & STRATAS JJ.A.)
DELIVERED FROM THE BENCH BY: STRATAS J.A.
APPEARANCES:
|
Wendy Burnham
Deborah Horowitz
|
FOR THE APPELLANT
|
|
William
Innes
Chia-Yi Chua
|
FOR THE RESPONDENTS
|
SOLICITORS OF RECORD:
|
Myles J. Kirvan
Deputy Attorney General of Canada
|
FOR THE APPELLANT
|
|
Fraser Milner
Casgrain LLP
|
FOR THE
RESPONDENTS
|
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