Fazal – Tax Court of Canada apparently finds that an individual’s dissolution of a proprietorship terminated her GST/HST registrant status
An individual carried on a proprietorship, which was registered for GST/HST purposes, and shortly thereafter incorporated that proprietorship, with the corporation receiving a fresh GST/HST registration. The business was unsuccessful, and the corporation was dissolved, and she began to carry on a fresh and quite separate business, as a proprietorship. Although in the initial three years, her annual sales came under the small supplier threshold of $30,000, CRA nonetheless ultimately assessed those years on the basis that she (personally) was still registered. (Under ETA s. 166, a small supplier must not be a registrant in order to be excluded.)
Fournier DJ vacated those assessments. Although his reasoning is somewhat unclear, it appears that he considered that because the previous proprietorship was dissolved, therefore she was no longer a registrant because the proprietorship respecting which she had registered no longer existed. This was a bit like him according a proprietorship separate person status for these purposes. He also suggested that CRA exercise “clemency” respecting a year in which she exceeded the $30,000 threshold by only $250.
Neal Armstrong. Summary of Fazal v. The Queen, 2020 TCC 137 under ETA s. 148(1).