Joyal,
J.:
—The
plaintiff
seeks
from
this
Court
a
declaratory
judgment.
The
issue
involves
an
interpretation
of
the
Income
Tax
Act.
It
requires
specifically
an
interpretation
of
that
statute
dealing
with
the
power
of
the
Minister
of
National
Revenue
to
reassess
a
taxpayer.
The
irony
of
this
case
is
that
whereas
the
power
of
the
Minister
to
reassess
has
traditionally
been
resisted
by
the
taxpayer,
in
this
case,
it
is
the
other
way
around.
It
is
the
taxpayer
who
prays
the
Minister
to
reassess
it.
It
is
the
Minister
who
resists
it
on
the
grounds
that
he
has
no
authority
to
do
so.
In
order
to
focus
on
this
abnormal
and
improbable
turn
of
events,
some
background
information
is
required.
That
background
information
is
contained
in
an
agreed
statement
of
facts
submitted
by
the
parties
at
the
trial
of
the
action.
Herewith
a
summary
of
it.
The
Facts
The
plaintiff
is
a
well-known
company
involved
in
the
manufacturing
and
processing
of
electronic
equipment.
In
each
of
the
taxation
years
between
1973
and
1976,
it
derived
considerable
income
from
short-term
securities.
In
each
of
these
years,
the
plaintiff
earmarked
these
revenues
as
business
income.
The
Minister
of
National
Revenue
disagreed.
He
decided
it
was
income
from
property.
This
affected
the
plaintiff's
tax
base
pursuant
to
subsection
125.1(1)
of
the
Income
Tax
Act
and
made
it
liable
for
greater
taxes.
The
plaintiff
filed
its
notices
of
objection
against
these
reassessments.
The
Minister
refused
to
budge.
The
plaintiff
then
went
to
the
Federal
Court,
Trial
Division.
It
too
refused
to
budge.
The
plaintiff
then
went
to
the
Federal
Court
of
Appeal.
Again
the
plaintiff
was
unsuccessful.
Finally,
in
its
ultimate
attempt,
the
plaintiff
sought
relief
from
the
Supreme
Court
of
Canada.
In
its
unanimous
judgment,
dated
November
6,
1986
and
reported
at
[1986]
2
C.T.C.
465;
86
D.T.C.
6526,
the
Court
allowed
the
plaintiff’s
appeal
and
declared
that
the
investment
income
earned
by
the
plaintiff
was
income
from
an
active
business
for
the
purposes
of
the
Income
Tax
Act
and
it
therefore
entered
into
the
computation
of
"Canadian
manufacturing
and
processing
profits".
As
the
issue
was
being
debated
through
three
successive
court
levels,
however,
the
plaintiff
continued
to
file
its
corporation
tax
returns.
It
did
so
for
the
years
1977
to
1981
inclusive.
On
July
4,
1983,
the
Minister
reassessed
the
plaintiff
for
each
of
those
years
in
conformity
with
the
position
taken
for
the
preceding
four
years,
1973-1976.
As
of
the
date
of
this
1983
reassessment,
the
four-year
limitation
period
pursuant
to
subsection
152(4)
of
the
Income
Tax
Act
had
not
yet
expired.
In
the
belief
that
the
Minister,
in
accordance
with
the
policy
set
out
in
Information
Circular
IC
75-7R3,
would
reassess
the
plaintiff
for
the
last
five
years
in
a
manner
consistent
with
the
ultimate
Court
decision
with
respect
to
the
previous
four
years,
the
plaintiff
did
not
file
any
notice
of
objection
nor
did
it
file
waivers
with
respect
to
those
years.
It
is
admitted
that
throughout
this
period
of
time,
the
Minister
was
aware
that
the
plaintiff
was
pursuing
its
appeal
from
the
previous
four
years
and
that
the
plaintiff's
policy
with
respect
to
all
the
years
1973-1981
was
to
seek
and
obtain
a
final
disposition
of
the
issue
one
way
or
the
other.
When
the
plaintiff
finally
won
its
case
before
the
Supreme
Court
of
Canada
covering
the
1973-1976
taxation
years,
it
expected
that
the
Minister
would
issue
a
reassessment
for
the
subsequent
five
years,
a
reassessment
which
would
be
in
conformity
with
the
Supreme
Court's
ruling
and
consonant
with
the
tax
liability
position
of
the
plaintiff
for
the
previous
years.
It
was
in
October,
1987,
that
the
plaintiff
was
advised
that
since
no
waivers
had
been
filed
with
respect
to
those
five
years,
the
Minister
did
not
have
the
authority
to
issue
notices
of
reassessment
for
those
years.
The
plaintiff
was
further
advised
that
the
Minister
did
not
have
authority
to
accept
a
waiver
once
the
four-year
limitation
period
had
expired.
The
Issue
Simply
stated,
the
issue
is
whether
or
not
the
Crown
is
correct
in
its
interpretation
of
the
Income
Tax
Act
or
whether
or
not
the
Minister
enjoys
a
residual
right
to
provide
relief
to
the
plaintiff.
It
is
a
case
where
contrary
to
tradition
and
practice,
the
Crown
appears
quite
happy
to
have
its
wings
clipped,
as
it
were.
Again
contrary
to
tradition
and
practice,
it
is
a
case
where
the
plaintiff
appears
quite
happy
to
renounce
its
rights
under
the
statute
and
bestow
on
the
Crown
unfettered
discretion
to
reassess
at
will.
In
order
to
determine
the
issue,
the
Court
is
invited
by
the
parties
to
scrutinize
the
relevant
provisions
of
the
Income
Tax
Act,
to
interpret
them
in
accordance
with
contemporary
rules
and
to
decide
which
side
of
the
issue
is
more
consistent
with
the
economy
of
the
statute
and
the
intention
of
Parliament
in
adopting
it.
In
going
through
this
process,
it
must
be
kept
in
mind
that
the
plaintiff's
action
calls
for
declaratory
relief
only.
The
plaintiff
concedes
that
the
Court
cannot
order
the
Crown
to
reassess
if
it
should
be
found
that
it
has
the
power
to
do
so.
The
Statute
The
relevant
provisions
of
the
Income
Tax
Act
are
found
in
Part
I,
Division
I
—
Returns,
Assessments,
Payment
and
Appeals.
Subsection
150(1)
provides
that
“a
return
of
income
for
each
taxation
year
.
.
.
shall,
without
notice
or
demand
therefor,
be
filed
with
the
Minister
in
prescribed
form
and
containing
prescribed
information”.
Subsection
152(1)
states
very
clearly
that
the
"Minister
shall,
with
all
due
dispatch,
examine
a
taxpayer's
return
of
income
for
a
taxation
year,
assess
the
tax
for
the
year,
the
interest
and
penalties
if
any
.
.
.".
Subsection
152(2)
imposes
another
duty
on
the
Minister,
namely
to
"send
a
notice
of
assessment
to
the
person
by
whom
the
return
was
filed”.
This
provision
is
complemented
by
subsection
152(3)
which
provides
that
"liability
for
tax
under
this
Part
is
not
affected
by
an
incorrect
or
incomplete
assessment
or
by
the
fact
that
no
assessment
has
been
made".
More
specific
provisions
relating
to
assessments
and
reassessments
are
found
in
subsection
152(4).
It
might
be
useful
to
reproduce
the
whole
of
this
subsection
at
this
time:
152.(4)
The
Minister
may
at
any
time
assess
tax,
interest
or
penalties
under
this
Part
or
notify
in
writing
any
person
by
whom
a
return
of
income
for
a
taxation
year
has
been
filed
that
no
tax
is
payable
for
the
taxation
year,
and
may
(a)
at
any
time,
if
the
taxpayer
or
person
filing
the
return
(i)
has
made
any
misrepresentation
that
is
attributable
to
neglect,
carelessness
or
wilful
default
or
has
committed
any
fraud
in
filing
the
return
or
in
supplying
any
information
under
this
Act,
or
(ii)
has
filed
with
the
Minister
a
waiver
in
prescribed
form
within
4
years
from
the
day
of
mailing
of
a
notice
of
an
original
assessment
or
of
a
notification
that
no
tax
is
payable
for
a
taxation
year,
(b)
within
7
years
from
the
day
referred
to
in
subparagraph
(a)(ii),
if
(i)
an
assessment
or
reassessment
of
the
tax
of
the
taxpayer
was
required
pursuant
to
subsection
(6)
or
would
have
been
required
if
the
taxpayer
had
claimed
an
amount
by
filing
the
prescribed
form
referred
to
in
that
subsection
on
or
before
the
day
referred
to
therein,
or
(ii)
there
is
reason,
as
a
consequence
of
the
assessment
or
reassessment
of
another
taxpayer's
tax
pursuant
to
this
paragraph
or
subsection
(6),
to
assess
or
reassess
the
taxpayer's
tax
for
any
relevant
taxation
year,
and
(c)
within
4
years
from
the
day
referred
to
in
subparagraph
(a)(ii),
in
any
other
case,
reassess
or
make
additional
assessments,
or
assess
tax,
interest
or
penalties
under
this
Part,
as
the
circumstances
require,
except
that
a
reassessment,
an
additional
assessment
or
assessment
may
be
made
under
paragraph
(b)
after
4
years
from
the
day
referred
to
in
subparagraph
(a)(ii)
only
to
the
extent
that
it
may
reasonably
be
regarded
as
relating
to
the
assessment
or
reassessment
referred
to
in
that
paragraph.
Finally,
subsection
152(8)
states
that
"an
assessment
shall,
subject
to
being
varied
or
vacated
on
an
objection
or
appeal
under
this
Part
and
subject
to
a
reassessment,
be
deemed
to
be
valid
and
binding
notwithstanding
any
error,
defect
or
omission
therein
or
in
any
proceeding
under
this
Act
relating
thereto".
The
Case
for
the
Crown
The
matter
before
me
involves
a
request
by
the
plaintiff
directed
to
the
Crown
that
its
Minister
of
National
Revenue
has
the
power
to
issue
a
reassessment
for
the
taxation
years
1977-1981
in
conformity
with
the
Supreme
Court
of
Canada
judgment
in
the
plaintiff's
favour.
The
Crown
takes
the
position
that
its
Minister
does
not
have
the
statutory
authority
to
do
so.
For
purposes
of
clarity,
I
should
perhaps
deal
first
with
the
case
for
the
defendant
Crown.
This
is
perhaps
unusual
but
after
reviewing
all
the
arguments
put
to
the
Court
by
able
counsel,
the
case
of
each
party
may
be
better
understood
if
I
should
proceed
in
that
fashion.
The
basic
proposition
advanced
by
the
Crown
is
that
the
plaintiff
is
seeking
to
circumvent
the
mandatory
requirements
of
the
Income
Tax
Act
respecting
the
filing
of
a
waiver
and
its
failure
to
file
objections
or
appeals.
The
plaintiff's
filing
of
a
waiver
at
this
time
is
clearly
for
this
purpose
and
in
any
event,
the
waiver
cannot
bestow
on
the
Minister
more
power
than
he
legitimately
enjoys
under
the
statute.
Counsel
for
the
Crown
suggests
that
the
power
of
the
Minister
to
assess
is
clearly
limited
by
the
text
of
subsection
152(4).
This
provision
is
unambiguous
and
clearly
precludes
the
Minister
from
assessing
outside
the
four-
year
limit
except
in
the
limited
circumstances
set
out
in
paragraph
152(4)(a)
and
(b),
namely
fraud
or
waiver.
A
reading
of
subsection
152(4)
clearly
indicates
that
a
taxpayer
who
fails
to
object
to
or
appeal
an
assessment
under
the
expressed
provisions
of
the
statute
cannot
otherwise
challenge
that
assessment
and
the
issue
is
forever
closed.
This
was
the
view
taken
by
the
Federal
Court
of
Appeal
in
The
Queen
v.
A.W.C.
Parsons
et
al.,
[1984]
C.T.C.
352;
84
D.T.C.
6345,
where
Pratte,
J.A.
stated
that,
as
the
statute
provides
certain
rights
of
appeal
against
an
assessment,
no
other
redress
or
relief
procedure
is
available.
Having
failed
to
follow
the
prescribed
route,
says
counsel,
the
plaintiff
cannot
now
retroactively
revive
its
rights
which,
had
they
been
properly
exercised,
may
have
permitted
reassessments
to
be
made.
The
other
approach
taken
by
the
Crown
is
that
in
the
statutory
context
of
subsection
152(4),
there
are
limits
to
the
Minister’s
assessing
powers.
Counsel
urges
the
Court
to
apply
the
rule
articulated
by
E.A.
Driedger
in
"Construction
of
Statutes”,
2
Ed.
(1983),
p.
84
as
endorsed
by
Estey,
J.
of
the
Supreme
Court
of
Canada
in
Stubart
Investments
Ltd.
v.
The
Queen,
[1984]
1
S.C.R.
536,
[1984]
C.T.C.
294;
84
D.T.C.
6305,
at
page
316
(D.T.C.
6323),
as
follows:
Today
there
is
only
one
principle
or
approach,
namely,
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
.
.
.
According
to
counsel,
the
context
of
the
section
152
and
specifically
of
subsection
152(4)
indicates
that
the
Minister
cannot
reassess
outside
the
statutory
limit
unless
certain
requirements
are
met.
Any
action
taken
by
him
outside
the
scope
of
this
provision
is
clearly
invalid.
Parliament's
intention
is
clearly
to
impose
such
limit
upon
the
Minister's
otherwise
unfettered
power
to
assess
at
any
time.
Such
limit
is
a
statutory
bar
to
any
assessment
made
outside
the
four-year
rule
unless
the
taxpayer
has
filed
a
waiver
in
the
prescribed
form
within
that
time.
In
asking
the
Court
to
intervene,
the
plaintiff
is
in
effect
requesting
that
paragraph
152(4)(a)
be
read
out
of
the
Act.
Counsel
for
the
Crown
refers
to
another
rule
of
interpretation
in
this
respect
as
found
in
the
Supreme
Court
of
Canada
decision
in
Grand
Trunk
Pacific
Railway
v.
Dearborn
(1919),
58
S.C.R.
315
where
the
Chief
Justice
said
this
at
page
320:
I
cannot
admit
the
right
of
the
Courts
where
the
language
of
a
statute
is
plain
and
unambiguous
to
practically
amend
such
statute
either
by
eliminating
words
or
inserting
limiting
words
unless
the
grammatical
and
ordinary
sense
of
the
words
as
enacted
leads
to
some
absurdity
or
some
repugnance
or
inconsistency
with
the
rest
of
the
enactment,
and
in
those
cases
only
to
the
extent
of
avoiding
that
absurdity,
repugnance
and
inconsistency.
Counsel
for
the
Crown
says
that
it
is
clear
from
the
language
of
the
statute
that
any
attempt
by
the
Minister
to
assess
or
reassess
outside
the
limits
imposed
would
be
declared
by
the
Courts
to
be
invalid
and
illegal.
Such
was
the
finding
in
Lechter
v.
M.N.R.,
[1964]
C.T.C.
510;
64
D.T.C.
5311
(Ex.
Ct.),
in
Bronze
Memorials
Limited
(No.
2)
v.
M.N.R.,
[1969]
C.T.C.
620;
69
D.T.C.
5420
and
in
Galway
v.
M.N.R.,
[1974]
F.C.
593;
[1974]
C.T.C.
313;
74
D.T.C.
6247.
In
the
Galway
case,
the
Chief
Justice
of
the
Federal
Court
said
at
page
315
(D.T.C.
6249):
It
seems
obvious
that
the
Minister
cannot,
on
a
re-assessment,
do
anything
other
than
assess
in
accordance
with
the
authority
conferred
on
him
by
the
Income
Tax
Act.
The
Chief
Justice
[went
on]
to
add
at
page
316
(D.T.C.
6250):
In
those
circumstances,
we
have
grave
doubt
as
to
whether
the
Minister
is
legally
entitled
to
re-assess
for
a
part
of
the
amount
of
tax
in
question.
If
he
is
not
legally
entitled
to
do
so,
the
Court
cannot
require
him
to
do
so.
Pratte,
J.,
in
Cohen
v.
The
Queen,
[1980]
C.T.C.
318;
80
D.T.C.
6250,
adopted
the
reasoning
in
the
Galway
case
respecting
a
taxpayer's
appeal
or
a
reassessment
on
the
basis
of
a
prior
agreement
with
the
Minister.
The
Trial
Division
had
ruled
that
"the
Minister
has
a
statutory
duty
to
assess
the
amount
of
tax
payable
in
accordance
with
the
law
as
he
understands
it”.
It
follows
that
he
cannot
assess
for
some
amount
designed
to
implement
a
compromise
settlement.
Pratte,
J.
added
this
at
page
319
(D.T.C.
6251):
The
agreement
whereby
the
Minister
would
agree
to
assess
income
tax
otherwise
than
in
accordance
with
the
law
would,
in
my
view,
be
an
illegal
agreement.
Therefore,
even
if
the
record
supported
the
appellant’s
contention
that
the
Minister
agreed
to
treat
the
profit
here
in
question
as
a
capital
gain,
that
agreement
would
not
bind
the
Minister
and
would
not
prevent
him
from
assessing
the
tax
payable
by
the
appellant
in
accordance
with
the
requirements
of
the
statute.
The
principle
to
be
derived
from
these
cases,
according
to
Crown
counsel,
is
that
the
Minister
cannot
knowingly
assess
in
contravention
of
the
provisions
of
the
Act.
Another
weapon
in
the
Crown's
armoury
is
that,
on
a
proper
construction
of
the
statutory
scheme
for
the
establishment
of
tax
liability,
it
is
in
the
public
interest
that
there
be
some
finality
on
the
fixation
of
any
such
liability.
That
is
why
there
are
“limitations
in
the
taxing
and
appeal
provisions",
as
found
by
Addy,
J.
in
Thyssen
Mining
Construction
of
Canada
Ltd.
v.
The
Queen,
[1975]
F.C.
81
at
89.
As
a
consequence,
the
declaratory
judgment
requested
by
the
plaintiff
would
frustrate
and
be
in
contravention
of
Parliament's
intention
as
reflected
in
the
statute
as
well
as
be
contrary
to
jurisprudence
dealing
with
the
limits
of
the
Minister's
assessing
process.
Counsel
for
the
Crown
also
refers
to
the
waiver
filed
by
the
plaintiff
out
of
time.
He
submits
that
such
a
waiver
cannot
be
permitted
to
extend
the
powers
of
the
Minister
since,
to
put
it
into
counsel's
own
words,
(i)
the
waiver
would
in
effect
eliminate
clear
statutory
limits
to
the
assessing
powers
of
the
Minister
and
purport
to
validate
what
would
be
ultra
vires
acts
on
the
part
of
the
Minister;
(ii)
the
granting
of
a
waiver
outside
the
3
year
limit
would
clearly
frustrate
Parliament's
intention
which
specifically
restricted
the
time
within
which
a
waiver
could
be
filed:
(iii)
the
relevant
provision
was
not
enacted
for
the
exclusive
benefit
of
the
Plaintiff.
Citing
Halsbury's
4
Ed.,
vol.
1,
para.
23
to
25,
counsel
states
that
as
a
general
rule,
a
waiver
cannot
give
a
public
authority
more
power
than
it
legitimately
possesses
under
the
relevant
legislation.
It
can
only
be
waived
by
a
person
where
it
can
be
said
that
the
provision
is
a
procedural
requirement
enacted
solely
for
his
benefit.
Of
assistance
to
the
Court
in
this
respect,
says
counsel,
is
the
1947
case
of
Melahn
v.
Commissioner
of
Internal
Revenue,
9
T.C.
769
(U.S.T.C.).
That
Court
rejected
the
notion
that
limitation
provisions
were
for
the
benefit
of
the
taxpayer
and
can
be
waived
by
him.
The
Court
stated
at
page
777:
The
very
nature
of
the
question
in
the
case
at
bar,
furthermore,
shows
that
the
statute
of
limitations
involved
herein
is
not
exclusively
for
the
benefit
of
the
taxpayer,
as
petitioner
contends.
It
is
much
to
the
interest
of
the
Commissioner
and
to
the
stability
of
public
revenue
that
the
waiver
of
limitations
be
done
only
in
the
manner
set
forth
by
the
statute.
A
principle
of
statutory
construction
of
ancient
lineage
provides
that,
when
a
statute
limits
the
method
of
performing
an
act,
it
thereby
precludes
other
methods.
In
the
United
Kingdom,
the
House
of
Lords
in
the
case
of
Kammins
Ballrooms
Co.
Ltd.
v.
Zenith
Investment
(Torquay)
Ltd.,
[1971]
A.C.
850;
[1970]
2
All
E.R.
871,
decided
that
statutory
time
limits
imposed
by
the
Landlord
and
Tenant
Act,
1954,
were
merely
procedural
and
could
be
waived
by
a
party.
In
another
case,
however,
Bristow,
J.
of
the
Queen's
Bench
Division
in
Howard
v.
Secretary
of
State
for
the
Environment,
[1972]
3
All
E.R.
310
[reversed,
[1974]
1
All
E.R.
644],
decided
that
a
time
limit
to
file
an
appeal
under
the
Town
and
Country
Planning
Act,
1968
was
a
mandatory
provision
and
that
the
Secretary
of
State
had
no
power
to
entertain
an
appeal
made
out
of
time.
Counsel
for
the
Crown
contends
that
the
waiver
provision
in
the
Income
Tax
Act
is
not
exclusively
for
the
benefit
of
the
taxpayer.
It
is
there
as
a
matter
of
public
policy
and
the
waiver
must
necessarily
comply
with
the
strict
conditions
which
the
statute
imposes.
A
waiver
filed
under
any
other
circumstances
than
those
provided
in
the
statute
is
of
no
consequence
and
cannot
have
the
effect
of
clothing
the
Minister
with
a
power
which
he
does
not
otherwise
possess.
The
Case
for
the
Plaintiff
Counsel
for
the
plaintiff
submits
as
a
general
proposition
that
there
is
no
statutory
bar
to
the
Minister
issuing
a
reassessment.
This
proposition,
counsel
suggests,
is
reflected
in
the
Minister's
Circular
No.
75-7R3
dated
July
9,
1984,
where
paragraph
4
thereof
reads
as
follows:
Reassessment
to
reduce
tax
payable
4.
A
reassessment
to
create
a
refund
ordinarily
will
be
made
upon
receipt
of
a
written
request
by
the
taxpayer,
even
if
a
notice
of
objection
has
not
been
filed
within
the
prescribed
time,
provided
that
(a)
the
taxpayer
has,
within
the
four
year
filing
period
required
by
subsection
164(1),
filed
the
return
of
income;
(b)
the
Department
is
satisfied
that
the
previous
assessment
or
reassessment
was
wrong;
(c)
the
reassessment
can
be
made
within
the
four-year
period
or
the
seven-year
period,
as
the
case
may
be,
referred
to
in
paragraph
1
above
or,
if
that
is
not
possible,
the
taxpayer
has
filed
a
waiver
in
prescribed
form;
(d)
the
requested
decrease
in
taxable
income
assessed
is
not
based
solely
on
an
increased
claim
for
capital
cost
allowances
or
other
permissive
deductions,
where
the
taxpayer
originally
claimed
less
than
the
maximum
allowable;
and
(e)
the
application
for
a
refund
is
not
based
solely
upon
a
successful
appeal
to
the
Courts
by
a
taxpayer.
Ordinarily
a
taxpayer
must
set
out
specifically
what
is
considered
to
be
wrong
in
the
assessment
for
the
year.
The
Crown
argues
that
what
must
be
kept
in
mind
are
the
realities
of
the
situation.
The
plaintiff
is
unjustly
out-of-pocket.
It
has
been
unjustly
charged
with
taxes
which
the
Supreme
Court
of
Canada
has
decided
are
not
owing.
Throughout
the
years
from
1982
to
1986,
when
the
plaintiff's
challenge
laboriously
worked
its
way
up
the
Court
system,
both
the
Crown
as
well
as
the
plaintiff
were
aware
that
the
factual
base
provoking
the
conflict
in
statute
interpretation
of
the
plaintiff's
investment
income
was
being
repeated
from
year
to
year.
The
Crown
was
a
participant
in
the
appeals
taken
by
the
plaintiff
before
the
Federal
Court
of
Canada,
in
both
the
Trial
and
the
Appeal
Divisions
as
well
as
before
the
Supreme
Court
of
Canada.
The
Crown
knew
that
the
final
determination,
one
way
or
the
other,
would
settle
the
issue
not
only
for
the
years
under
appeal
but
for
the
subsequent
years
as
well.
It
would
therefore
be
in
keeping
with
the
whole
scheme
of
income
taxation
for
the
Crown
to
have
at
least
the
legal
right
to
reassess
even
though
it
might
not
have
the
statutory
obligation
to
do
so.
Counsel
for
the
plaintiff
suggests
further
that
on
a
proper
reading
of
the
particular
limitations
found
in
subsection
152(4),
one
should
conclude
that
they
are
there
to
protect
the
taxpayer.
They
are
necessary
safeguards
to
the
wide
and
unfettered
authority
conferred
on
the
Minister,
by
the
opening
words
of
the
subsection,
namely,
to
assess
"at
any
time”.
Were
it
not
for
the
prescriptive
periods
imposed,
a
taxpayer
could
be
left
in
permanent
limbo
as
to
his
tax
position
over
any
number
of
years.
Taxes
are
debts
due
to
the
Crown
and
as
a
consequence,
a
taxpayer
would
never
be
able
to
define
or
certify
the
true
amount
of
his
liabilities.
Counsel
urges
the
Court
to
find
that
the
safeguards
found
in
subsection
152(4)
are
there
as
a
shield
to
protect
the
taxpayer.
Outside
of
the
limits
imposed,
the
Minister
must
prove
either
fraud
or
waiver.
In
the
absence
of
either,
the
taxpayer
can
resist
any
notice
of
assessment
and
have
it
declared
null
and
of
no
effect.
It
does
not
follow,
however,
that
such
notice
of
assessment
would
be
void
ab
initio.
It
would
simply
be
voidable
and
its
voidable
character
would
only
be
crystallized
if
the
taxpayer
decided
to
avail
himself
of
his
statutory
defences.
This
approach,
says
counsel,
is
consistent
with
other
provisions
of
the
Act
including,
inter
alia,
subsection
152(8)
which
declares
that
"an
assessment
.
.
.
shall
be
deemed
to
be
valid
and
binding
.
.
.”.
It
is
also
consistent
with
the
statutory
duty
imposed
on
the
Minister
to
fix
the
tax
payable
under
the
Act.
No
more,
no
less.
As
a
generic
principle,
therefore,
the
protection
afforded
a
taxpayer
under
subsection
152(4)
is
not
one
of
public
policy
but
in
a
nature
of
a
private
right
which
a
taxpayer
may
exercise
at
will.
In
fact,
argues
plaintiff’s
counsel,
the
situation
is
analogous
to
an
action
taken
on
a
bill
of
exchange
well
after
the
applicable
limitations
period.
The
defendant
is
perfectly
free
to
raise
or
not
to
raise
this
in
his
defence.
If
he
fails
to
do
so,
it
is
no
bar
to
the
action
proceeding
on
the
merits.
In
any
event,
says
counsel,
the
claim
on
the
outstanding
bill
subsists.
It
is
only
the
right
of
action
which
might
be
prescribed.
In
support
of
his
proposition
that
subsection
152(4)
is
a
shield
to
protect
a
taxpayer
and
which
a
taxpayer
may
discard,
counsel
for
the
plaintiff
refers
to
Robert
Charron
v.
M.N.R.,
a
Tax
Review
Board
decision
reported
at
[1981]
C.T.C.
2271;
81
D.T.C.
271
where,
at
page
2273
(D.T.C.
273),
member
D.E.
Taylor
looks
upon
section
152
of
the
Act
as
a
“special
protection
accorded
taxpayers"
and
which
cannot
lightly
be
set
aside
by
the
Minister.
Counsel
also
refers
to
Gunnar
Mining
Limited
v.
M.N.R.,
[1970]
Tax
A.B.C.
1;
70
D.T.C.
1020,
where
J.O.
Welden,
Q.C.
of
the
Tax
Appeal
Board
states
at
page
1026
that
"the
waiver
provision
in
section
46(4)
of
the
Act
was
plainly
intended
for
the
sole
benefit
and
protection
of
taxpayers
and
was
not
intended
to
prevent
an
assessment
sought
by
a
taxpayer
.
.
.”
The
Board's
decision
in
that
case
goes
on
to
say:
.
.
.
since
Parliament
obviously
intended
to
give
the
Minister
the
broadest
possible
powers
of
assessment
under
section
46,
the
way
appears
to
have
been
left
open
thereunder
for
him
to
make
an
assessment
at
any
time
at
the
request
and
with
the
consent
of
the
taxpayer
involved
having
regard
to
the
Minister's
almost
impregnable
position
under
subsection
(7)
of
section
46
which
purports
to
cure
any
error,
defect
or
omission
therein.
It
has
not
been
possible
for
me
to
imagine
how
an
assessment
made
under
those
circumstances
could
run
counter
to
section
46
or
the
plain
overall
purpose
thereof.
The
plaintiff
also
finds
support
with
respect
to
the
presumed
validity
of
any
tax
assessment
in
the
case
of
Morch
v.
M.N.R.,
[1949]
C.T.C.
250;
49
D.T.C.
649
where
the
President
of
the
Exchequer
Court
at
page
257
(D.T.C.
652)
is
quoted
as
saying
that,
until
a
taxpayer
can
discharge
the
onus
that
an
assessment
is
erroneous
in
fact
or
in
law,
it
remains
a
valid
assessment,
a
statement
substantially
repeated
by
the
Trial
Division
of
the
Federal
Court
in
The
Queen
v.
Wellington
Taylor,
[1984]
C.T.C.
436;
84
D.T.C.
6459
at
page
439
(D.T.C.
6461).
Counsel
further
submits
that
indicative
of
the
judicial
approach
to
the
legal
character
of
an
assessment
and
to
the
nature
of
the
defences
available
to
a
taxpayer
is
the
judgment
of
Reed,
J.
of
this
Court
in
Walter
W.
Davis
v.
The
Queen,
[1984]
C.T.C.
564;
84
D.T.C.
6518.
The
taxpayer
in
that
case
had
been
reassessed
in
1966
with
respect
to
his
1950
taxation
year
and
in
so
doing,
the
Crown
alleged
misrepresentation
on
the
part
of
the
taxpayer
which
removed
the
taxpayer
from
the
protective
limitation
of
subsection
152(4).
The
parties
settled
the
issue
before
trial
and,
in
1968,
minutes
of
a
settlement
were
filed
in
Court
and
confirmed
by
judgment.
In
December
1969,
a
notice
of
reassessment
in
conformity
with
the
judgment
was
issued
and
the
taxpayer
appealed
against
that
reassessment
on
the
grounds
that
the
Minister,
prior
to
the
filing
of
the
judgment,
had
not
proved
misrepresentation
on
the
taxpayer's
part
and
that
the
reassessment
was
thereupon
statute-
barred.
In
the
face
of
this,
Reed,
J.
had
this
to
say
at
page
565
(D.T.C.
6519):
I
do
not
think
this
claim
is
well
founded.
The
Minister
is
not
required
to
prove
misrepresentation
before
he
sends
out
a
notice
of
reassessment
which
is
dated
beyond
the
4-year
time
period
provided
for
in
the
statute.
Misrepresentation
must
be
proved
only
if
the
matter
goes
to
trial.
Later,
at
page
566
(D.T.C.
6520),
Reed,
J.
notes
that
“If,
as
the
plaintiff
alleges,
the
Minister
was
required
to
prove
misrepresentation
before
a
settlement
judgment
could
be
entered,
there
would
be
no
reason
for
him
to
engage
in
such
a
settlement.
.
.
.
If
the
taxpayer's
claim
in
this
regard
were
right
it
could
undercut
the
whole
purpose
and
rationale
of
settling
claims
without
going
to
trial”.
Counsel
for
the
plaintiff
urges
me
to
conclude
from
the
foregoing
that
no
more
than
private
interests
are
involved
as
far
as
a
taxpayer's
protection
under
subsection
152(4)
is
concerned.
A
taxpayer
may,
by
consent,
agree
to
respect
a
reassessment
even
though
issued
way
out
of
time
with
no
misrepresentation
or
fraud
having
been
proven.
This,
of
course,
was
the
view
which
had
been
taken
by
the
Federal
Court
of
Appeal
in
an
earlier
case,
namely,
Smerchanski
v.
M.N.R.,
[1974]
C.T.C.
241;
74
D.T.C.
6197,
where
the
taxpayer
had
consented
to
terms
of
settlement
of
outstanding
assessments
covering
some
15
years,
had
admitted
the
correctness
of
the
assessments
and
had
waived
his
rights
of
appeal.
After
ruling
that,
on
the
facts,
the
settlement
terms
could
not
be
regarded
as
a
thwarting
of
the
statute
or
of
the
statutory
scheme
or
as
a
substitution
of
taxation
by
contract
for
taxation
according
to
statute,
Thurlow,
J.A.,
as
he
then
was,
said
this
at
page
250
(D.T.C.
6203):
Turning
to
the
second
way
in
which
the
appellant's
submission
was
put
it
appears
to
me,
again,
as
a
general
proposition,
that
it
is
not
open
to
the
Minister
to
stipulate
as
a
condition
of
making
a
reassessment
that
the
taxpayer
admit
liability
for
the
amount
to
be
assessed
or
that
he
waive
his
right
of
appeal.
There
is
nothing
in
the
statute
which
expressly
or
impliedly
prohibits
the
making
of
such
a
stipulation
by
him
but
on
the
other
hand
nothing
in
the
statute
appears
to
me
to
expressly
or
impliedly
authorize
him
to
exercise
his
statutory
powers
in
that
way.
To
that
extent
I
am
in
agreement
with
the
appellant's
proposition.
However,
if
this
is
the
correct
view
it
appears
to
me
that
the
right
to
object
to
such
a
stipulation
is
one
that
accrues
to
the
taxpayer
concerned
and
if
for
some
reason
of
his
own,
such
as
the
hope
of
avoiding
a
public
prosecution,
the
taxpayer
consents
to
such
a
stipulation
or
waives
his
right
to
object
there
appears
to
me
to
be
no
principle
of
public
morality
or
of
public
policy
which
would
intervene
to
protect
him
from
the
consequences
of
his
own
act
in
so
consenting
or
waiving.
I
am
also
of
the
opinion
that
the
right
of
a
taxpayer
under
the
Act
to
appeal
from
an
assessment
is
not
a
public
right
or
one
conferred
for
the
public
benefit
but
is
a
private
right
of
the
taxpayer
which
he
is
entitled
to
forego
or
to
waive
if
he
sees
fit
to
do
so.
At
page
250-51
(D.T.C.
6204)
of
the
judgment,
Thurlow,
J.A.
added
this:
Applying
these
considerations
to
the
present
situation
it
appears
to
me
that
if
it
can
be
said,
as
I
think
it
may,
that
the
Minister
stipulated
as
a
condition
of
his
proceeding
in
the
matter
by
way
of
reassessment
to
recover
penalties
incurred,
as
well
as
taxes
and
interest,
that
the
appellant
admit
his
liability,
pay
the
amounts
assessed
forthwith
and
waive
his
right
of
appeal,
the
appellant
did
not
object
thereto
but,
on
the
contrary,
as
evidenced
both
by
his
execution
of
the
commitment
of
July
2,
1964
and
by
his
execution
of
the
document
of
July
10,
1964
and
his
immediate
payment
of
the
amounts
assessed,
consented
to
and
approved
of
the
stipulation.
He
did
this
in
each
instance
with
his
eyes
open
and
upon
the
advice
of
competent
counsel
and
there
is,
in
my
view,
no
principle
of
public
policy
or
public
morality
or
of
the
policy
of
the
statute
which
is
offended
by
the
assessments
having
been
made
upon
such
stipulation
and
consent
or
which
would
relieve
the
appellant
from
the
consequences
of
his
consent
or
of
his
formal
waiver
of
his
right
to
appeal
from
the
assessments
so
made.
I
therefore
agree
with
the
conclusion
of
the
learned
trial
judge
that
the
appellant
is
bound
by
the
waiver
of
appeal
contained
in
the
document
executed
by
him
and
delivered
on
July
10,
1964.
This
unfettered
right
of
a
taxpayer
to
waive
his
right
of
appeal,
even
when
the
threat
of
criminal
prosecution
hangs
over
him,
was
endorsed
by
the
Supreme
Court
of
Canada
when
the
Smerchanski
case
went
to
appeal.
Reported
at
[1976]
C.T.C.
488;
76
D.T.C.
6247,
the
judgment
of
the
Court
was
delivered
by
the
Chief
Justice
who
stated
at
page
494
(D.T.C.
6251):
Since
it
is
not
contested
that
a
taxpayer
may
validly
waive
his
rights
of
appeal
against
a
tax
assessment
and
that
no
question
of
public
policy
is
involved
to
preclude
such
a
waiver,
the
only
issue
of
importance
in
this
appeal
is
whether
the
tax
authorities,
seriously
contemplating
prosecution,
and
by
indictment
as
in
the
present
case,
are
entitled
to
exact
a
waiver
of
rights
of
appeal
as
a
binding
term
of
settling
a
clear
tax
liability
when
overtures
for
settlement
are
made
by
the
taxpayer
and,
in
consequence,
to
abandon
their
intention
to
prosecute.
The
Chief
Justice
went
on
to
say
at
page
495-96
(D.T.C.
6252):
The
result
to
which
I
would
come
in
this
case
is
encased
in
broad
statutory
provisions
in
both
England
and
the
United
States.
Authorization
for
pecuniary
settlements
instead
of
instituting
criminal
proceedings
has
been
part
of
the
tax
law
in
England
since
1944
and
is
now
found
in
the
Taxes
Management
Act,
1970
(U.K.),
c.
9,
section
105.
In
the
United
States,
sections
7121
and
7122
of
the
Internal
Revenue
Code
of
1954
authorize
settlements
and
compromises
of
tax
liability
as
against
civil
or
criminal
proceedings
prior
to
reference
to
the
Department
of
Justice
for
prosecution
or
defence.
I
do
not
regard
these
provisions
as
necessarily
pointing
to
the
common
law
invalidity
of
all
contractual
settlements
made
in
the
knowledge
of
probable
prosecution
and
in
order
to
avoid
it.
Rather
they
represent
an
acknowledgement
of
practice
by
seeking
to
put
beyond
dispute
the
power
of
the
tax
collector
to
settle
or
compromise
tax
liability,
even
if
there
be
wilful
evasion
leaving
the
taxpayer
open
to
possible
or
probable
prosecution.
I
would
dismiss
the
appeals
with
costs.
Conclusions
I
should
not
wish
to
flatter
counsel
unduly
but
they
have
both
convinced
me
that
there
is
ambiguity
in
the
statute
dealing
with
the
right
of
the
Minister
to
reassess
in
the
circumstances
of
the
case
at
bar.
To
resolve
that
ambiguity
is
not
without
difficulty.
Subsection
152(1)
states
clearly
that
the
Minister
shall
examine
a
taxpayer's
return
and
assess
tax
for
the
year.
Subsection
152(4),
on
the
other
hand,
says
that
a
Minister
may
at
any
time
assess
tax.
Similarly,
subsection
152(1)
speaks
of
a
taxpayer's
tax
return.
So
does
subsection
152(4)
and
subsection
152(5)
and
subsection
152(6).
All
of
them
indicate
that
the
Minister’s
duty
or
discretion
under
subsection
152(1)
or
subsection
152(4)
respectively
may
only
be
exercised
on
the
basis
of
tax
returns
having
been
previously
filed.
It
is
only
in
subsection
152(7)
that
the
Minister
may
assess
a
tax
even
though
no
return
has
been
filed.
This
might
lead
one
to
suggest
that
there
is
a
duty
on
the
Minister
to
assess
where
a
return
has
been
filed
but
he
enjoys
a
statutory
discretion
when
it
is
otherwise.
Those
observations
are
not
necessarily
pertinent
to
the
case
before
me
but
they
nevertheless
outline
the
difficulties
one
faces
in
dealing
with
such
dichotomous
terms
in
the
context
of
the
same
section
of
the
statute.
So
too
with
the
limitations
and
waiver
provisions
found
in
subsection
152(4).
My
initial
interpretation
of
the
Crown's
argument
is
that
if
the
Minister
may
only
assess
within
certain
limited
periods
of
time
unless
misrepresentations
or
fraud
is
present
or
a
waiver
has
been
filed,
he
may
not
assess
at
any
other
time.
As
of
the
limitation
dates
prescribed
in
that
subsection,
the
Minister's
powers
are
exhausted
and
whether
or
not
the
situation
calls
for
redress
in
favour
of
the
Receiver
General
or
in
favour
of
the
taxpayer,
the
tax
liability
is
determined
once
and
for
all
and
with
a
finality
that
reality
and
logic
will
not
displace.
In
the
eyes
of
the
plaintiff,
however,
the
issue
is
not
so
black
and
white.
The
plaintiff
interprets
the
limitation
period
provided
in
subsection
152(4)
as
expressing
the
intention
of
Parliament
to
protect
the
taxpayer
from
the
unruly
exercise
of
the
Minister's
prerogatives
to
keep
assessing
or
reassessing
a
taxpayer
at
will.
It
is
not
meant
to
close
the
door
to
an
assessment
at
any
time
if
the
taxpayer
should
waive
the
protection
which
the
subsection
affords
him.
As
I
view
the
arguments
advanced
by
both
sides,
the
issues
may
be
broken
down
as
follows:
1.
In
resolving
the
ambiguity
in
the
text
of
subsection
152(4),
should
one
read
into
it
the
intention
of
Parliament
to
write
finis
to
the
whole
assessment
scheme
if
the
limitation
periods
mentioned
therein
are
not
respected?
If
so,
that
would
be
the
end
of
the
matter.
2.
On
the
other
hand,
if
it
should
be
found
that
the
limitations
imposed
are
for
the
benefit
of
the
taxpayer,
it
would
continue
to
be
the
Minister's
prerogative
to
assess
at
any
time,
leaving
it
to
the
taxpayer
to
avail
himself
of
his
defences
if
he
so
wishes.
In
considering
these
alternatives,
the
factual
basis
on
which
these
proceedings
are
taken
cannot
be
completely
overlooked.
It
is
a
fact
that
the
assessments
made
by
the
Minister
for
the
years
1973-1976
as
well
as
for
the
years
1977-1981
are
wrong,
at
least
they
are
wrong
in
the
sense
that
they
are
not
according
to
law.
It
is
admitted
by
the
parties,
and
I
have
already
referred
to
case
law
in
that
respect,
that
the
Minister's
powers
only
extend
to
fixing
the
tax
liability
under
the
Act.
Therefore,
whether
or
not
the
plaintiff
is
stuck
with
the
assessments
under
review,
namely
for
the
years
1977-1981,
the
fact
is
that
when
the
Supreme
Court
decision
was
handed
down
in
1986,
it
became
evident
that
the
tax
liability
imposed
on
the
plaintiff
was
wrong
in
law
and
that
the
assessments
had
not
been
made
under
the
Act.
The
plaintiff,
in
its
returns
for
each
of
these
years,
declared
its
liability
for
tax.
That
declaration
was
a
perfectly
proper
one.
Next
followed
the
assessments
of
1983.
As
stated
by
Lord
Dunedin
in
the
case
of
Whitney
v.
Commissioners
of
Inland
Revenue,
[1926]
A.C.
p.
37
at
p.
52,
10
T.C.
88
"there
is
a
declaration
of
liability.
.
.
.
Next
there
is
the
assessment.
Liability
does
not
depend
on
assessment.
That,
ex
hypothesi,
has
already
been
fixed.
But
assessment
particularizes
the
exact
sum
which
a
person
liable
has
to
pay".
It
follows
therefore
that
the
tax
liability
of
the
plaintiff
is
in
the
amount
declared
by
it
and
not
in
the
amount
fixed
in
the
Minister's
assessments.
The
other
element
which
bemuses
me
somewhat
is
the
position
taken
by
the
Crown
when
the
plaintiff
filed
its
waiver
and
requested
that
it
be
reassessed
in
conformity
with
the
Supreme
Court
judgment.
It
seems
to
me,
at
first
blush,
that
the
decision
of
the
Crown
to
accede
to
or
refuse
that
request
was
purely
discretionary.
I
have
referred
earlier
to
the
mandatory
and
permissive
authority
of
the
Minister
to
assess
under
section
152.
It
appears
to
be
mandatory
under
subsection
152(1)
and
subsection
152(2)
but
discretionary
under
subsection
152(4).
The
Minister
might
conceivably
have
simply
refused
to
exercise
his
discretion
in
favour
of
the
plaintiff
The
grounds
would
have
been
persuasive:
the
plaintiff
having
failed
to
file
the
requisite
objections
or
appeals
or
waivers,
the
plaintiff
is
foreclosed
and
the
Minister,
for
policy
or
other
reasons,
is
not
prepared
to
take
any
initiative
which
might
provide
relief.
The
Crown,
however,
did
not
take
that
position.
It
refused
to
reassess
on
the
grounds
that
the
Minister
was
bereft
of
any
statutory
authority
to
do
so.
In
essence,
the
message
to
the
plaintiff
was
that
notwithstanding
the
obvious
error
in
the
1977-1981
assessments
or
a
wrongly
imposed
tax
liability
or
an
unjust
enrichment
in
his
hands,
the
Minister
had
these
same
unjustly
enriched
hands
tied
under
the
statute
and
had
no
power
to
provide
relief.
As
will
be
seen
from
the
arguments
advanced,
the
debate
on
the
issue
seems
to
slide
some
distance
away
from
the
narrow
field
of
statute
interpretation
on
which
a
declaratory
judgment
may
be
founded.
A
waiver
of
a
taxpayer's
rights
under
subsection
152(4)
may
be
a
matter
of
public
policy
or
simply
a
matter
of
private
choice.
That
issue
does
not
determine
if
the
Minister
has
any
residual
power
"to
assess
at
any
time”.
Similarly,
if
the
statute
which
provides
an
assessment,
under
subsection
152(8)
is
deemed
to
be
valid
and
binding,
it
does
not
necessarily
follow
that
an
untimely
reassessment
is,
on
its
face,
beyond
the
Minister's
powers.
Finally,
a
declaration
from
this
court
that
the
Minister
is
not
statute-barred
from
issuing
an
assessment
does
not
necessarily
imply
that
he
has
a
duty
to
do
so.
With
these
observations,
nay
ruminations,
in
mind,
the
Court
must
now
come
to
terms
with
the
questions.
I
should
perhaps
proceed
as
follows:
(1)
I
should
find
that
in
accordance
with
the
jurisprudence
outlined
in
the
plaintiff's
case,
the
protection
given
to
a
taxpayer
under
subsection
152(2)
is
one
which
the
plaintiff
may
waive.
The
cases
of
Charron
v.
M.N.R.,
Gunnar
Mining
Limited
v.
M.N.R.,
Walter
Davis
v.
M.N.R.,
Morch
v.
M.N.R.,
Smerchanski
v.
M.N.R.,
supra,
consistently
hold,
and
express
in
various
ways,
that
doctrine.
(2)
I
subscribe
to
the
view
expressed
by
Welden,
Q.C.
in
the
Gunnar
case
that
having
regard
to
the
Minister’s
almost
impregnable
position
under
subsection
46(7),
now
subsection
152(8),
the
way
appears
to
have
been
left
open
to
the
Minister
for
him
to
make
an
assessment
at
any
time
at
the
request
of
and
with
the
consent
of
the
taxpayer.
I
have
[emphasized]
the
foregoing
words
to
indicate
that
the
ruling
is
not
meant
to
impose
on
the
Minister
a
duty
to
do
so.
(3)
Subsection
152(8)
of
the
Act
bears
a
close
analysis.
That
subsection
states
that
an
assessment,
which
is
always
subject
to
a
reassessment,
is
deemed
to
be
valid
and
binding
notwithstanding
any
error,
defect
or
omission
therein
or
in
any
proceeding
under
this
Act
relating
thereto.
This
particular
provision,
in
my
view,
expresses
the
intention
of
Parliament
to
confer
a
prima
facie
validity
on
any
assessment
action
taken
by
the
Minister,
subject
only
to
its
enforceability
vis-a-vis
the
taxpayer.
This
presumption
of
validity
may
only
be
defeated
by
a
successful
objection
or
appeal
or
by
the
taxpayer
raising
the
shield
of
protection
given
him
by
subsection
152(4).
This
leads
me
to
conclude
that
any
assessment
of
the
Minister
is
voidable,
but
would
not
be
void
ab
initio.
(4)
The
strong
point
raised
by
counsel
for
the
Crown
is
the
one
dealing
with
public
policy.
The
main
thrust
of
this
particular
argument
is
that
under
subsection
152(4),
Parliament
clearly
intended
to
cut
short
any
protracted
suspense
over
a
taxpayer's
tax
liability,
in
other
words,
to
bring
finality
to
the
creditor-debtor
relationship.
I
must
acknowledge
that
standing
alone,
such
an
interpretation
of
subsection
152(4)
is
plausible.
That
provision,
however,
must
be
read
in
the
light
of
its
opening
words,
namely
that
the
“Minister
may
at
any
time
assess
tax"
and
in
the
light
of
the
deemed
validity
of
any
assessment
under
subsection
152(8)
to
which
I
have
earlier
referred.
Furthermore,
on
the
issue
before
me,
I
do
not
see
a
clearly
defined
public
policy.
The
declaration
sought
by
the
plaintiff
is
not
such
as
to
impose
a
duty
on
the
Minister
to
reassess.
It
is
only
to
declare
that
the
Minister
has
the
statutory
power
to
assess,
if
following
the
dictates
of
public
policy,
he
should
find
that
it
is
proper
and
fitting
that
he
should
do
so.
The
Minister
can
hide
just
as
well
behind
policy
and
refuse
to
exercise
his
discretion
to
assess
as
he
can
hide
behind
the
statute
for
the
same
purpose.
In
either
case,
I
see
no
flaw
in
whatever
policy
context
might
be
found
in
the
statute
in
that
regard.
(5)
On
the
issue
of
waiver,
counsel
for
the
Crown
invited
me
to
consider
a
New
Zealand
case.
It
is
Reckitt
and
Colman
(New
Zealand)
Limited
v.
Taxation
Board
of
Review,
[1966]
N.Z.L.R.
1032
(C.A.).
This
case
deals
with
the
authority
of
the
Commissioner
of
Inland
Revenue
to
waive
strict
compliance
with
the
30-day
delay
under
section
29
of
the
relevant
statute
within
which
the
taxpayer
may
appeal
from
a
Board
of
Review
to
the
Supreme
Court.
The
case
cites
the
Exchequer
Court
of
Canada
decision
in
Fasken
v.
M.N.R.,
[1948]
C.T.C.
265;
[1949]
1
D.L.R.
810
where
Thorson,
P.
stated
as
follows
at
page
291
(D.L.R.
834):
An
appeal
from
an
income
tax
assessment
is
not
a
private
dispute
between
the
appellant
taxpayer
and
the
Minister
or
a
/is
in
the
ordinary
sense
.
.
.;
the
public
has
an
interest
in
the
disposition
of
the
appeal
and
in
seeing
that
taxpayers
are
held
liable
for
the
tax
which
Parliament
has
imposed
on
them.
.
.
.
The
New
Zealand
Court
of
Appeal
finds
in
the
30-day
rule
a
matter
of
public
policy
which
the
Commissioner
of
Inland
Revenue
cannot
waive.
The
Court
says
at
page
1039:
In
purporting
to
waive
the
time
limit
the
Commissioner
is
putting
the
Crown
in
jeopardy
once
more,
and
that,
in
a
general
way,
may
react
to
the
disadvantage
of
other
taxpayers.
Accordingly,
in
my
opinion,
the
Commissioner
could
not
lawfully
waive
the
first
requirement
of
section
29.
This
decision
might
be
consistent
with
our
own
jurisprudence.
The
case
before
me,
however,
is
not
whether
the
Crown
can
waive
a
statutory
prescriptive
period
which
the
taxpayer
has
not
met.
It
is
a
case
where
the
shoe
is
on
the
other
foot.
Any
waiver
by
the
plaintiff
of
his
rights
under
section
152(4)
of
the
Act
and
which
has
been
consistently
declared
by
our
courts
to
be
for
his
own
protection,
does
not
finally
determine
the
issue.
The
issue
is
only
determined
if,
as
and
when
the
Minister,
in
his
discretion,
decides
to
reassess.
It
is
at
that
stage,
in
my
respectful
view,
that
policy
considerations,
if
any,
apply.
(6)
The
other
approach
to
public
policy
taken
by
the
Crown
is
that
if
it
should
be
found
that
the
Minister
may
indeed
assess
at
any
time,
tax
liabilities
would
never
be
finally
settled
and
the
Minister
would
be
deluged
with
invitations
to
reassess
and,
as
it
might
be
surmised,
on
grounds
which
are
not
so
starkly
respectable
as
the
plaintiff's.
The
quick
answer
to
this
apprehension
is
that
the
Minister
must
take
the
statute
as
he
finds
it.
If
Parliament
should
bestow
upon
him
unlimited
power
to
assess
and
reassess,
there
is
implied
a
burden
on
the
Minister
to
exercise
that
power
in
accordance
with
the
dictates
of
public
policy.
If
public
policy
should
lead
him
to
conclude
that
on
no
account
should
he
reassess
outside
of
the
limits
imposed
by
subsection
152(4),
no
matter
the
grief
to
the
taxpayer,
such
would
be
within
his
prerogative.
(7)
One
can
easily
imagine
circumstances
where
a
particular
taxpayer
who
has
filed
neither
a
notice
of
objection
nor
an
appeal,
requests
the
Minister
well
within
the
limitation
period,
to
issue
a
reassessment
based
on
a
recently
declared
judicial
interpretation
favourable
to
another
taxpayer.
It
would
be
my
view
that
the
Minister
has
a
discretion
to
do
so.
It
is
part
of
his
residual
authority.
He
may
exercise
this
discretion
according
to
public
policy.
In
this
respect,
it
will
be
noted
that
the
Minister
has
already
stated
policy
in
his
Information
Circular
IC
75-7R3
where
he
declares
in
paragraph
4(3)
that
he
will
not
issue
such
reassessment
in
these
circumstances.
(8)
Again
on
the
issue
of
a
void
as
against
a
voidable
assessment,
I
should
refer
to
subparagraph
152(4)(a)(ii)
of
this
Act
wherein
the
Minister
may
assess
at
any
time
in
the
case
of
misrepresentation
or
fraud.
Once
an
assessment
Is
made
on
those
grounds,
the
Minister
is
required
to
prove
them.
Until
the
issue
is
decided,
however,
the
assessment
remains
a
valid
one
and
it
obliges
the
taxpayer
to
come
to
terms
with
it.
The
assessment
cannot
be
attacked
as
being
void
ab
initio.
It
is
only
voidable
if
the
Minister
cannot
meet
the
burden
of
proof.
In
the
same
way,
therefore,
the
Minister
may
assess
at
any
time
and
that
assessment
is
valid
on
its
face,
subject
only
to
the
taxpayer
availing
himself
of
his
statutory
defences
in
which
event
the
assessment
cannot
stand.
(9)
I
interpret
the
waiver
provisions
under
the
Act
as
a
signal
to
the
Minister
that
a
taxpayer
will
not
raise
limitations
as
a
defence.
This
enables
either
party
to
complete
on-going
examinations
so
that
a
more
proper
assessment
might
ultimately
be
made.
In
the
absence
of
a
waiver,
a
taxpayer
risks
having
to
fight
a
more
peremptory
assessment.
I
do
not
see,
however,
where
a
taxpayer's
failure
to
do
so
should
be
a
statutory
bar
to
the
Minister
making
what
is
otherwise
an
untimely
assessment.
One
must
not
confuse
the
legality
of
an
Act
with
its
questionable
effectiveness.
In
this
respect,
I
should
find
no
distinction
between
the
Civic
Hospital
waiver
of
a
right
of
appeal
as
in
the
Smerchanski
case
or
the
kind
of
anticipatory
waiver
filed
by
the
plaintiff
in
the
case
at
bar.
Both
are
options
available
to
any
taxpayer.
The
plaintiff,
as
in
the
Gunnar
Mines
case,
simply
invites
the
Minister
to
reassess
it
in
conformity
with
the
law
laid
down
by
the
Supreme
Court
of
Canada.
The
Minister's
discretion
to
act
on
it,
however,
is
not
affected
and
his
policy
decision
is
not
one
in
which
this
or
any
other
Court
would
deign
to
intervene.
Judgment
I
should
therefore
declare
that
in
accordance
with
my
interpretation
of
the
Income
Tax
Act,
the
Minister
of
National
Revenue
is
not
statute-barred
from
reassessing
the
plaintiff
for
the
taxation
years
1977-1981,
notwithstanding
the
limitation
and
waiver
provisions
of
subsection
152(4)
of
the
Act.
It
follows
from
the
reasons
given
that
I
need
make
no
finding
respecting
the
validity
of
any
waiver
filed
outside
the
time
limits
prescribed
in
the
statute.
Declaration
granted.