Date: 20061117
Docket: A-513-05
Citation: 2006 FCA 372
CORAM: LINDEN J.A.
NADON
J.A.
MALONE
J.A.
BETWEEN:
SCOTT PAPER LIMITED
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
NADON J.A.
[1]
On April
11, 2002, the Canadian International Trade Tribunal (the “CITT”), in Appeal No.
AP-2000,-034, dismissed the appellant’s appeal from a decision of the Minister
of National Revenue (the “Minister”) dated May 30, 2000. The Minister denied
its claim for a refund (the “claim”) of federal sales tax (“FST”) paid on
bathroom tissue on the ground that the claim had not been made within two (2)
years of the payment, as prescribed by section 68 of the Excise Tax Act,
R.S.C. 1985, c.E-15 (the “Act”).
[2]
The appellant
appealed the CITT’s decision to the Federal Court and on October 3, 2005, in decision
2005 FC 1354, Heneghan J. dismissed the appeal. The appellant seeks an Order
setting aside the Federal Court’s decision and referring the matter back to the
Minister for reconsideration on the basis that it is entitled to a refund of an
amount equal to the amount of moneys paid in error under the Act during the
period of April 1, 1990 to December 31, 1990, on its sales of facial and
bathroom tissues, with applicable interest.
[3]
The issue
in this appeal is whether the claim filed by the appellant on May 15, 1992, meets
the requirement of section 68 of the Act. More particularly, was the claim made
within two years of the payment of the moneys in regard to which the appellant
says it is entitled to a refund?
[4]
As section
68 of the Act is at the heart of this appeal, it will be useful to reproduce it
immediately:
|
68. Where a
person, otherwise than pursuant to an assessment, has paid any
moneys in error, whether by reason of mistake of fact or law or
otherwise, and the moneys have been taken into account as taxes, penalties,
interest or other sums under this Act, an amount equal to the amount of
those moneys shall, subject to this Part, be paid to that
person if he applies therefor within two years after the payment of the
moneys.
[Emphasis added]
|
68.
Lorsqu’une personne, sauf à la suite d’une cotisation, a
versé des sommes d’argent par erreur de fait ou de droit ou
autrement, et qu’il a été tenu compte des sommes d’argent à titre de taxes,
de pénalités, d’intérêts ou d’autres sommes en vertu de la présente loi, un
montant égal à celui de ces sommes doit, sous réserve des autres
dispositions de la présente partie, être payé à cette personne, si elle
en fait la demande dans les deux ans suivant le paiement de ces sommes.
[Le souligné est le
mien]
|
[5]
I also reproduce section 71 and subsection
72(2), which are relevant to the proper construction of section 68:
|
71.
Except as provided in this or any other Act of Parliament, no person has a
right of action against Her Majesty for the recovery of any moneys paid to
Her Majesty that are taken into account by Her Majesty as taxes, penalties,
interest or other sums under this Act.
[…]
72.
(2) An application shall be made in the prescribed form and contain the
prescribed information.
[Emphasis added]
|
71.
Sauf cas prévus à la présente loi ou dans toute autre loi fédérale, nul n’a
le droit d’intenter une action contre Sa Majesté pour le recouvrement de
sommes payées à Sa Majesté, dont elle a tenu compte à titre de taxes, de
pénalités, d’intérêts ou d’autres sommes en vertu de la présente loi.
[…]
72.
(2) Une demande doit être faite en la forme prescrite et contenir les
renseignements prescrits.
[Le souligné est le
mien]
|
[6]
Although
the facts were carefully set out by Heneghan J., a brief restatement is
essential to a proper understanding of the issue raised by this appeal.
The Facts
[7]
On May 15,
1992, the appellant filed a claim on the “N-15” form (the “form”) prescribed by
the Minister, seeking a refund in the amount of $2,848,844 for FST paid in
error during the period of April 1, 1990 to December 31, 1990. Under the heading
“Reason for Refund”, which appears on the first page of the form, the appellant
wrote “overpayment of FST on exempt sales”. No mention of facial or bathroom
tissues was made in this N-15 filing.
[8]
By letter
dated July 10, 1992, Rhea L. Lust, the appellant’s Marketing Control Manager
and the person who prepared the appellant’s form dated May 15, 1992, wrote to
Revenue Canada, explaining, in the following
terms, the nature of the claim filed by the appellant:
The refund claim for
$2,848,844 produced by Scott Paper Limited in relation with overpayments of
Federal Sales Tax (F.S.T.) on sales of facial tissues seeks to
protect our eventual right to refund.
We understand that
competitors and other companies in similar circumstances have so proceeded.
The Tariff Board has
determined in the C.I.P. (Facelle Division) that facial tissues were not
considered as health goods, but rather as cosmetics for purposes of the Excise
Tax Act. In view of this, section 2(1)(d) and 50(5)(g) of the Act are
particularly relevant.
Section 2(1)(d) deems as
manufacturers persons who sell cosmetics, otherwise than exclusively in a
retail store directly to consumers, cosmetics not manufactured by them in Canada. On the
other hand, section 50(5)(g) exempts from sales tax, sales of cosmetics to
persons deemed as manufacturers under aforementioned section 2(1)(d).
In view of the
jurisprudence regarding facial tissues, it clearly appears
that Scott Paper may have paid the sales tax in error on sales to certain
customers; accordingly, a refund claim has been filed.
We understand
that this is a contentious issue which is being discussed at Excise
headquarters in Ottawa: our aim is solely to protect our right
to refund, should it be confirmed.
Accordingly, please
proceed with this claim, as you see fit in the circumstances.
[Emphasis
added]
[9]
It should
be pointed out that the appellant’s claim was filed on a protective basis. In
effect, as Ms. Lust’s letter of July 10, 1992 indicates, the appellant, in
filing its claim, relied on a 1986 decision of the Tariff Board in C.I.P. v.
D.M.N.R. (1986), 12 C.E.R. 112 (Tariff Board), wherein the Tariff Board
concluded that facial tissues were “cosmetics”. That decision was upheld by
this Court (see: D.M.N.R. v. C.I.P. (1988), 17 C.E.R. 3 (F.C.A.); F.C.J.
No. 582 (Q.L.)). Although “cosmetics” were not tax-exempt goods when
that decision was rendered, they were made tax-exempt goods under the Act in
1989 and, thus, the importance of the ruling in the C.I.P. matter.
[10]
When the
appellant filed its claim in May 1992, it was aware that Kimberly-Clark Canada Inc.
(“Kimberly-Clark”), one of its competitors, had filed a refund claim in respect
of tax paid in error on both facial and bathroom tissues. For the sake of
completeness, I should point out that the Minister denied Kimberly-Clark’s
claim by notice of determination dated September 23, 1993 and, as a result, Kimberly-Clark
filed a notice of objection dated December 17, 1993. By notice of decision
dated September 19, 1994, the Minister rejected Kimberly-Clark’s notice of
objection and confirmed the notice of determination.
[11]
The
evidence clearly shows that when it filed its claim on May 15, 1992, the
appellant was not claiming a refund in regard to tax paid in error on bathroom
tissue. Ms. Rosemary Anderson, who at all times material to these proceedings
was an accountant employed by Price Waterhouse and was the person who dealt
with Revenue Canada on behalf of the appellant in regard to its claim (at least
as of March 1995), testified that the amount claimed by the appellant did not
include tax paid in error on bathroom tissue. When asked why the appellant had
not made a claim in regard to bathroom tissue, she indicated that John Reid, the
President of the appellant, “… was very sceptical about the bathroom tissue
side of the claim. And they filed it in a hurry.” At pages 58, 59 and 60 of the
transcript of her evidence before the CITT on September 11, 2001, Ms. Anderson
gave the following answers to questions posed by Crown counsel in
cross-examination:
MS. TURLEY: Now, you
said a number of times during you examination in-chief that the refund claim
was filed on the basis of the CIP decision?
MS. ANDERSON: Right.
MS. TURLEY: And the CIP
decision only relates to facial tissue, you are aware of that?
MS. ANDERSON: Yes. The
CIP decision, they knew that Kimberly-Clark had felt that the CIP decision
would also apply to bathroom tissue at the time of filing this claim. But the
CIP decision was in connection with facial tissue, yes.
MS. TURLEY: So you are
telling me the time of filing the claim in May 1992 that they knew about the
Kimberly-Clark refund claim?
MS. ANDERSON: Yes, they
did.
MS. TURLEY: So why
then, in addition to the 2.8 million which relates only to facial tissue, did
they not include sales of bathroom tissue?
MS. ANDERSON: I
understand it was because they were – John Reid was very sceptical about the
bathroom tissue side of the claim. And they filed it in a hurry.
MS. TURLEY: so was John
Reid then consulted? You said he was “sceptical”. Was he consulted then when
this refund claim was filed in May of 1992?
MS ANDERSON: He would
have seen a copy of it probably, or he would have, as president, or CFO, he
would have known about it. He had the meetings with Jacques Roberge and Rhea
Lust, according to what Rhea explained to me and what John explained to me. He
knew Jacques very well.
MS. TURLEY: Now, would
you agree with me that all the correspondence from the date of the filing of
the refund claim in May 1992 until the end of November 1999, all of your communications,
all of Scot’s and all of your communications on behalf of Scott, relates only
to sales of facial tissue?
MS. ANDERSON: Yes.
[Emphasis
added]
[12]
By notice
of determination dated September 21, 1993, the Minister disallowed the
appellant’s claim on the ground that its sales of facial tissues had been
“correctly made on a tax-paid basis” and that, accordingly, the tax paid by the
appellant had not been paid in error.
[13]
As a
result, the appellant filed a notice of objection dated December 9, 1993, on
the basis that facial tissues were “cosmetics” pursuant to subsection 2(1) of
the Act and, thus, tax-exempt pursuant to paragraph 50(5)(g). In
advancing that position, the appellant relied on the CIP, supra
decision. In an attachment to its notice of objection, entitled “Addition to
Notice of Objection: Scott Paper Limited”, the appellant made the following
submissions:
·
Scott
Paper Limited (“Scott”) manufactures facial tissues and other paper products. On
May 20, 1992, Scott filed a refund request for federal sales tax remitted on
sales made during the period of April 1, 1990 to December 31, 1990 of
facial tissues, to persons who were included in the description of
“manufacturer or producer” as described in subsection 2(1) under the Excise Tax
Act and who were licensed under that Act.
·
This
refund request was made pursuant to a decision of the Federal Court, C.I.P.
Inc. vs. Minister of National Revenue (A-673-86) in which the court determined that
facial tissues were included in the definition “cosmetic” as that term
is defined in subsection 2(1) of the Excise Tax Act.
·
Subsection
50(5)(g) of the Excise Tax Act states that “notwithstanding anything in
subsection (1), the consumption or sales tax shall not be payable on goods sold
to or imported by a person described in paragraph (d) of the definition of
“manufacturer or producer” in subsection 2(1) who is licensed under the Act if
the goods are cosmetics”. Accordingly, Scott was not required to pay federal
sales tax on these sales.
[Emphasis
added]
[14]
By letter
dated March 14, 1995, the appellant confirmed its agreement to hold its claim
in abeyance, pending the Federal Court’s decision with regard to Kimberly-Clark’s
refund claim. On March 12, 1998, the Federal Court concluded that both facial
and bathroom tissues were “cosmetics” for the purposes of the Act and, thus,
tax-exempt (see Kimberly-Clark Canada Inc. v. H.M.Q., [1998] 145 FTR 265
(T.D.)).
[15]
Following
the Kimberly-Clark, supra decision, Revenue Canada proceeded to audit the appellant’s claim.
Specifically, on June 24, 1998, in response to a request from Revenue Canada, the appellant provided it with
a schedule in support of the amount sought in its claim. It is important to
point out that all working papers, information and documentation submitted by the
appellant referred only to sales of facial tissues. Specifically, the appellant
enclosed the following documents:
1.
A copy of
the original refund claim with a supporting schedule, indicating the claim
related to sales of facial tissues to licensed wholesalers during the period of
April 1, 1990 to December 31, 1990;
2.
Calculations
showing the effective federal sales tax rate for Scott Paper Limited for a
sample month (July 1990) during the claim period including a copy of the
federal sales tax return and related cheques;
3.
Listing of
the consumer facial tissues sales for the claim period.
[16]
During the
course of the audit, Revenue Canada informed the appellant that
it would not approve the full amount of the claim solely on the basis of the
amount of FST paid in error on its sales of facial tissues. Therefore, in
November 1999, the appellant, for the first time, informed Revenue Canada that it was of the view that
its sales of bathroom tissue formed part of its claim. More particularly, in a
letter dated December 9, 1999, Rosemary Anderson of Price Waterhouse, relying
on the Kimberly-Clark decision, wrote to Revenue Canada indicating that the
appellant’s claim also covered tax paid in error on bathroom tissue and,
accordingly, enclosed documentation regarding its sales of bathroom tissue.
[17]
Ultimately,
Revenue Canada decided that the appellant could not add bathroom tissue to its claim
on the ground that the May 15, 1992 claim did not include tax paid in error on
account of sales of bathroom tissue and that, as a result, a refund claim in
regard thereto had not been made within the two-year period set out in section
68 of the Act.
[18]
Accordingly,
by notice of decision dated May 30, 2000, the appellant’s request for a refund
of FST paid in error with respect to its sales of bathroom tissue was denied.
However, the appellant’s claim in relation to facial tissues was allowed in the
amount of $1,684,444. I should add that on March 24, 2004, the appellant
received an additional refund from Revenue Canada in the sum of $445,813. Thus, the
appellant has obtained reimbursement of tax paid in error on its sales of
facial tissues in the sum of $2,130,257.
[19]
In dismissing
the appellant’s appeals, both the CITT and the Federal Court concluded that the
appellant’s claim for a refund of tax paid in error with respect to its sales
of bathroom tissue had not been made within the timeframe set out at section 68.
In so concluding, both the CITT and Heneghan J. were of the view that in filing
a claim under that section, it was essential to indicate the nature of the
goods in respect of which an error was alleged.
[20]
I now turn
to the judgment under appeal.
The Federal Court’s Decision
[21]
The
appellant appealed the CITT’s decision to the Federal Court pursuant to section
81.4 of the Act and the appeal was heard as a trial de novo. However,
the parties did not adduce any evidence, save for a series of e-mails exchanged
between employees of Revenue Canada, but relied on the
documentary evidence and transcripts of the evidence adduced before the CITT.
On October 3, 2005, Heneghan J. dismissed the appellant’s appeal.
[22]
The Judge
began her analysis of the issue before her by determining the correct approach
to interpreting section 68 of the Act. She concluded that the proper approach was
that enunciated by the Supreme Court of Canada in Rizzo and Rizzo Shoes Ltd.
(Re.), [1998] 1 S.C.R. 27, which endorsed the modern statutory approach set
out by Elmer A. Driedger in Construction of Statutes 2nd ed.,
(Toronto: Butterworth, 1983) at p. 87:
Today, there is only one
principle or approach, namely, the words are to be read in their entire context
and in their grammatical and ordinary sense harmoniously with the scheme of the
Act, the object of the Act and the intention of Parliament.
[23]
The Judge
then pointed out that the principle stated in Rizzo, supra, had been
adopted by the Supreme Court in all areas of the law, including tax law, and in
support of that proposition, she relied on that Court’s decisions in Ludco
Enterprises Ltd. v. Canada, [2001] 2 S.C.R. 1082 at paragraphs 36 and 37, Markevich
v. Canada, [2003] 1 S.C.R. 94 at paragraph 12, and Canada (Deputy
Minister of National Revenue) v. Mattel Canada Inc., [2001] 2 S.C.R. 100 at
paragraph 41.
[24]
At
paragraph 52 of her reasons, the Judge formulated the approach that should be
taken in interpreting legislation:
[52] In interpreting
legislation, the Court must address several issues. First, it must consider the
words and ask whether the language carries a plain and ordinary meaning, or is
there ambiguity or lack of clarity. Second, the context of the legislation must
be examined, having regard to the history of the provision in question, the
scheme of the statute, the object of the statute and the policy considerations
of Parliament in enacting the legislation.
[25]
In
applying that approach to the interpretation of section 68 of the Act, the
learned Judge considered whether the language therein had a plain and ordinary
meaning, or whether it was ambiguous. She concluded that the provision was not
clear on a plain meaning interpretation. At paragraph 54 of her reasons, she
explained why she was of that view:
[54] … The degree of
specificity required to establish the content of "paid any moneys in
error" is not clear upon a plain and ordinary reading of the statute. In
my opinion, it is clear that in order for the two-year limitation period to
operate, the moneys paid in error must be reasonably identifiable.
[26]
As a
result, the Judge went on to consider the other contextual aspects of the
modern approach to interpretation, including the policy considerations behind
the limitation period of section 68. She held that Parliament’s intent in
imposing the limitation period was to have a degree of certainty in the
resolution of refund claims. That certainty, in the Judge’s view, was not only
with respect to time, but also with respect to the nature and scope of the
refund claimed. On that basis, the Judge held that Parliament’s intention in
imposing a statutory limitation period would be defeated if the category of products
were left indeterminate. Therefore, a generally-worded refund claim was
insufficient to satisfy the requirements of section 68.
[27]
Further,
on the evidence before her, the Judge found that the appellant’s claim was
deliberately restricted to FST paid on its sales of facial tissues. As a
result, the appellant’s claim for moneys paid in error on its sales of bathroom
tissue was statute-barred pursuant to section 68.
Analysis
[28]
For the
reasons that follow, I conclude that this appeal should be dismissed. I reach
this conclusion for two reasons.
[29]
The first,
which in my view is sufficient to dispose of the appeal, is that it is clear
from the evidence that the appellant, in filing its claim in May 1992, was not
claiming, nor did it intend to claim, a refund in regard to tax paid in error
on account of its sales of bathroom tissue.
[30]
In support
of this view, the evidence of Ms. Anderson is compelling. She testified that
although the appellant knew that Kimberly-Clark had a made a refund claim in
regard to both bathroom tissue and facial tissues, the appellant had restricted
its claim to facial tissues because its President “… was very sceptical about
the bathroom tissue side of the claim”. Ms. Anderson’s testimony is consistent
with the totality of the evidence on this point. The correspondence between the
appellant and Revenue Canada, including the documentation submitted in support
of the claim, pertained only to tax paid on sales of facial tissues. More
particularly, Ms. Lust’s letter of July 10, 1992, in which the appellant
provided Revenue Canada with the particulars of its
claim, limits the claim to “overpayments of federal sales tax (FST) on sales of
facial tissues …”.
[31]
Also of
relevance is the notice of objection filed by the appellant following the Minister’s
notice of determination dated September 21, 1993 which disallowed its claim. In
its notice of objection, the appellant expressly states that “[o]n May 20,
1992, Scott filed a refund request for federal sales tax remitted on sales made
during the period of April 1, 1990 to December 31, 1990, of facial tissues, …”.
[32]
The
evidence is also clear that the amount claimed by the appellant was based
exclusively on calculations of tax paid in respect of its sales of facial
tissues during the relevant period.
[33]
The
evidence also shows that the appellant did not raise the possibility of adding the
FST paid on its sales of bathroom tissue to its claim until November 1999, when
it realized that the claimed amount of $2,848,844 would not be recovered in
full. In this regard, I wish to point out that although the Kimberly-Clark
decision was rendered on March 12, 1998, the appellant did not seek to add the
FST paid on its sales of bathroom tissue to its claim until November 1999, i.e.
almost 20 months later.
[34]
Therefore,
there can be no doubt whatsoever that when it filed its claim on May 15, 1992,
the appellant was seeking a refund only for tax paid in error with regard to
its sales of facial tissues. I therefore fail to see how the appellant could
suddenly say in the fall of 1999, based on the broad wording of its claim and,
in particular, on the words “overpayment of FST on exempt sales”, that its
claim includes a demand for a refund of tax paid in error on its sales of
bathroom tissue.
[35]
My second
reason for concluding that the appeal should be dismissed is that, on a true
construction of section 68, the appellant’s claim for a refund of tax paid in
error on account of its sales of bathroom tissue does not meet the requirements
of the section.
[36]
The
parties argued in favour of different approaches to the interpretation of
section 68. For the appellant, it was argued that the
‘plain meaning’ rule governs the interpretation of taxing statutes. In
particular, the appellant relies on the Supreme Court of Canada’s decision in Canada
v. Antosko, [1994] 2 S.C.R. 312, where the Court stated at pages 326-327:
While it is true that the courts must view
discrete sections of the Income Tax Act in light of the other provisions of the
Act and of the purpose of the legislation, and that they must analyze a given
transaction in the context of economic and commercial reality, such techniques
cannot alter the result where the words of the statute are clear and plain and
where the legal and practical effect of the transaction is undisputed.
[37]
The appellant also relied on the Supreme Court’s
decision in Shell Canada Ltd. v. Canada, [1999] 3 S.C.R. 622, where
McLachlin J. (as she then was) stated, at paragraph 40, that the general object
or spirit of the provision at issue can never supplant a court’s duty to apply
an unambiguous provision of a taxing statute. Where the provision is clear and
unambiguous, its terms must simply be applied.
[38]
The appellant submits that on its face, there is
no requirement in section 68 that the nature of the error giving rise to the
overpaid tax be specified. Therefore, on a plain reading of the section, where
moneys have been paid in error, regardless of the nature of the error, an
amount equal to those moneys is to be refunded if the person who paid it simply
applies for a refund within two years of the payment of the moneys.
[39]
Regardless of the correct interpretive approach,
the appellant argues that it was not appropriate for the Judge to have read
into section 68 the requirement that the nature of the error and the type of
goods involved be specified in the refund application when, on its face,
section 68 did not so provide. In support of this argument, the appellant
relies on the Supreme Court’s decision in Friesen v. Canada, [1995] 3
S.C.R. 103, where at paragraph 27, Major J. held that it is a basic principle
of statutory interpretation that the court should not accept an interpretation
which requires the insertion of extra wording where there is another acceptable
interpretation which does not require any additional wording.
[40]
The respondent disagrees with the applicant’s
position and submits that the “plain meaning” rule has given way to the modern
statutory approach pursuant to which all statutes, including taxing statutes,
must be interpreted in a textual, contextual and purposive way. For this proposition,
the respondent relies, inter alia, on the Supreme Court’s decision in Canada
Trustco Mortgage Co. v. Canada, [2005] S.C.J. No. 56, 2005 SCC 54 at
paragraph 11.
[41]
The
respondent submits that the Judge was correct in considering the policy
considerations behind the creation of the two-year limitation period in section
68. She could not ignore the purpose and rationale behind the provision in
question as suggested by the appellant.
[42]
In
response to the appellant’s argument that the Judge erred by reading into
section 68 the requirement that the nature of the error and type of goods
involved be specified in the refund claim, the respondent submits that the
Judge did not read or add words into that section. Rather, Heneghan J. applied
the purposive principles of interpretation and concluded that the moneys paid
in error must be readily identifiable in order to give meaning and effect to
the two-year limitation period in section 68. If accepted, the appellant’s
interpretation of section 68 would produce an absurd result as it would
undermine the limitation period provided in that section.
[43]
Finally,
the respondent submits that pursuant to subsection 72(2) of the Act,
applications are to be made in the prescribed form and contain the prescribed
information.
[44]
In my
view, the approach which must guide the interpretation of section 68 is that
enunciated by the Supreme Court in Canada Trustco, supra, where the Chief Justice and Major J., writing for a
unanimous Court, said at paragraph 10:
[10] It has long
been established as a matter of statutory interpretation that “the words of an
Act are to be read in their entire context and in their grammatical and
ordinary sense harmoniously with the scheme of the Act, the object of the Act,
and the intention of Parliament”: see 65302 British Columbia Ltd. V. Canada,
[1999] 3 S.C.R. 804, at para. 50. The interpretation of a statutory provision
must be made according to a textual, contextual and purposive analysis to find
a meaning that is harmonious with the Act as a whole. When the words of a
provision are precise and unequivocal, the ordinary meaning of the words plays
a dominant role in the interpretive process. On the other hand, where the words
can support more than one reasonable meaning, the ordinary meaning of the words
plays a lesser role. The relative effects of ordinary meaning, context
and purpose on the interpretive process may vary, but in all cases the court
must seek to read the provisions of an Act as a harmonious whole.
[Emphasis
added]
[45]
Thus,
although the textual, contextual and purposive analysis is the correct approach
to interpreting section 68, if the words of the provision are “precise and
unequivocal”, the plain meaning of the words will carry much weight in interpreting
the meaning of the provision. However, if the words of section 68 are capable
of supporting more than one reasonable meaning, the plain meaning of the words
will carry less weight.
[46]
The
learned Judge, after a careful examination of the words of section 68, concluded
that the provision was not sufficiently precise and, as a result, she
considered the other contextual aspects of the modern statutory approach, which
led her to review the policy considerations behind the limitation period
prescribed by section 68. As a result of these considerations, the Judge concluded
that the appellant’s claim did not meet the requirements of the provision with
respect to FST paid on sales of bathroom tissue. In reaching this conclusion,
the Judge made it clear that it was necessary, in making a claim under section
68, to indicate the nature of the product to which the refund sought pertained.
At paragraph 59 of her reasons, she wrote:
[59] In my view, if
the category of products claimed for is left indeterminate, Parliament's
intention in imposing a statutory limitation period would be effectively
defeated.
[47]
Although I
agree with the Judge’s interpretation of section 68, I do not view the words of
the section as being ambiguous or imprecise. In my view, the words of the
provision are, to the contrary, capable of only one reasonable interpretation.
Thus, the ordinary meaning of these words must, as per the Supreme Court of
Canada in Canada Trustco, supra, “play a dominant role in the
interpretive process”.
[48]
The appellant
argues that, on its face, section 68 does not require that the nature of the
error giving rise to the overpaid tax be specified. With respect, I see no
basis whatsoever for that view.
[49]
The
section allows a person who has paid tax in error to seek a reimbursement of its
moneys within two years after the payment. The operative words in the section
are, in my view, the words “applies therefor”. The French version uses the words “si
elle en fait la demande”. Therefore,
for a person to obtain a refund of moneys paid in error, he must “apply
therefor” within two years after the payment of the moneys. This necessarily
means that the person must apply for the moneys paid in error. That, in my
view, cannot be done without specifying the error which is at the heart of the
demand for a reimbursement. In specifying the error, it is essential to give an
indication of the goods to which the payment of FST pertains since, without that
information, there is no explanation of the error and, hence, no possibility of
a refund by Revenue Canada, in that Revenue Canada will not be able
to make any calculation of the moneys to be reimbursed.
[50]
Turning to the
present case, the appellant’s explanation in the N-15 Form filed on May 15,
1992, i.e. “overpayment of FST on exempt sales”, is, in my respectful view,
completely useless. That information could never lead to a reimbursement, since
the claim is without any object.
[51]
In my view, not only
is section 68, on its own, capable of one reasonable meaning only, it is even
more so when it is read with subsection 72(2), which provides that a refund
claim made thereunder must “be made in the prescribed form and contain the
information prescribed”. The N-15
form,
i.e. the prescribed form, pursuant to which the appellant made its claim, clearly
requires that the person seeking a reimbursement indicate the reason for which
a refund is sought. Albeit in a slightly different context, Rothstein J. (as he
then was) had occasion in Riverside Concrete Ltd. v. Canada, [1995] 2
F.C. 309, to consider the meaning of both section 68 and subsection 72(2). At
paragraph 32 of his reasons, he explained why it was necessary for a person
seeking a reimbursement to provide the information required by the prescribed
form:
[32] … Parliament has established a process
under the Excise Tax Act for taxpayers to claim refunds. That process commences
with an application for refund utilizing a prescribed form, pursuant to
subsection 72(2) [as am. by R.S.C., 1985 (2nd Supp.), c. 7, s. 34]. Presumably,
such a form is to fulfil Revenue Canada’s need to have
specified information in order to verify the validity and amount of the refund
claimed.
There is then a notice of determination by the Minister under subsection 72(6)
[as am. idem]. The taxpayer may then file a notice of objection under section
81.17 [as enacted idem, s. 38]. Following this, the Minister issues a notice of
decision under subsection 81.17(5). Under sections 81.19 [as enacted idem;
R.S.C., 1985 (4th Supp.), c. 47, s. 52] and 81.2 [as enacted by
R.S.C., 1985 (2nd Supp.), c. 7, s. 38; (4th Supp.), c.
47, s. 52], the taxpayer may elect to appeal a negative notice of decision to
the C.I.T.T. or to this Court. Pick-a-Mix Concrete Limited followed this course
of action in bringing its appeal before the C.I.T.T., from the notice of
objection stage forward.
[Emphasis added]
[52]
I am obviously not
concluding that the appellant’s claim, as filed on May 15, 1992, does not meet
the requirements of section 68 insofar as it seeks a refund in respect of the
tax paid on sales of facial tissue. That issue is not before us and has already
been dealt with by the parties. For present purposes, I am content to read the
appellant’s claim in conjunction with Ms. Lust’s letter of July 10, 1992,
where, in effect, the appellant provided the information which, in my view,
ought to have been provided when filing its claim.
[53]
Before concluding, I
wish to address one other matter. The appellant argued that the Judge had erred
by failing to conclude that it had complied with Revenue Canada’s refund claim
procedure in that its claim complied with Revenue Canada’s longstanding and well-known procedure for the filing and
processing of refund claims under section 68, which was disclosed by a group of
e-mails exchanged between employees of Revenue Canada.
[54]
In my view, that
argument cannot succeed. I agree entirely with the Judge that all that the
e-mails establish is a difference of opinion amongst Revenue Canada officials as to whether the appellant’s claim was broad
enough to include tax paid on its sales of bathroom tissue. At paragraph 64 of
her Reasons, the Judge wrote:
[64] The new evidence that was provided,
consisting of a series of e-mails exchanged between employees of CCRA, does
not, in my opinion, change the situation. At most, these e-mails show that
there was a difference of opinion as to whether the N15 addressed the issue of
a refund for bathroom tissues. It appears that Ms. Watson was of the view that
the claim was sufficiently broad. Others, in particular Mr. Janmohamed, disagreed.
Ultimately, the determination of whether the request for tax refund meets the
statutory requirements is a matter of statutory interpretation and the new
evidence does not assist in that regard.
Conclusion
[55]
In my
view, in concluding as she did, the Trial Judge made no reviewable error. The
interpretation which the appellant urges upon us is, in my view, totally
unreasonable and leads to a result which completely undermines the limitation
period provided in section 68.
[56]
For these reasons, I
would dismiss the appeal with costs.
“M. Nadon”
“I
agree.
A.M.
Linden J.A.”
“I
agree.
B.
Malone J.A.”
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