Mahoney,
J.:—This
section
28
application
seeks
to
set
aside
a
decision
of
the
Minister
of
National
Revenue
fixing
the
amount
of
a
payment
to
be
made
to
the
Kamloops
School
Board
under
paragraph
46(1)
(a)
of
the
Excise
Tax
Act,
R.S.C.
1970,
c.
E-13,
as
amended.
It
is
agreed
that
circumstances
existed
that
rendered
it
difficult
to
determine
the
exact
amount
of
the
payment
to
which
the
School
Board
was
entitled.
46.
(1)
Where
materials
have
been
purchased
by
or
on
behalf
of
(a)
a
school,
university
or
other
similar
educational
institution
for
use
exclusively
in
the
construction
of
a
building
for
that
institution,
and
the
tax
imposed
by
Part
V
has
been
paid
in
respect
of
those
materials,
the
Minister
may,
on
application
by
such
institution,
organization
or
corporation
in
such
form
as
the
Minister
prescribes,
made
to
the
Minister
within
four
years
from
the
time
the
materials
were
purchased,
pay
to
such
institution,
organization
or
corporation
an
amount
equal
to
that
tax.
48.
Where
by
this
Act
or
An
Act
to
amend
the
Excise
Tax
Act,
chapter
12
of
the
Statutes
of
Canada,
1963,
a
deduction
from
or
refund
of
tax
is
provided
for
or
a
payment
by
the
Minister
in
an
amount
equal
to
tax
paid
is
provided
for,
and
circumstances
exist
that
render
it
difficult
to
determine
the
exact
amount
of
such
deduction,
refund
or
payment
by
the
Minister,
the
Minister,
with
the
consent
of
the
person
to
whom
the
deduction,
refund
or
payment
may
be
granted
or
made,
may
in
lieu
thereof
grant
a
deduction
or
refund
or
make
a
payment
in
an
amount
determined,
in
such
manner
as
the
Governor
in
Council
may
by
regulation
prescribe,
to
be
the
exact
amount
of
the
deduction,
refund
or
payment.
The
Formula
Refund
Regulations,
C.R.C.
1980,
c.
591,
made
pursuant
to
section
48
of
the
Act,
provide:
3.(1)
Where
by
the
Act
a
person
is
entitled
(a)
to
make
a
deduction
from
tax
payable
by
him,
(b)
to
a
refund
of
tax
paid,
or
(c)
to
receive
a
payment
from
the
Minister
in
an
amount
equal
to
tax
paid,
and
circumstances
exist
that
render
it
difficult
to
determine
the
exact
amount
of
such
deduction,
refund
or
payment
by
the
Minister,
the
amount
of
the
deduction,
refund
or
payment
by
the
Minister
shall,
where
the
person
consents,
be
determined
in
the
manner
set
out
in
subsection
(2).
(2)
The
exact
amount
of
deduction,
refund
or
payment
by
the
Minister,
determined
for
the
purpose
of
subsection
(1),
shall
be
equal
to
the
tax
that
would
have
been
paid
at
the
time
of
imposition
of
the
tax
on
the
goods
on
a
price
or
value
determined
by
reducing
(a)
the
sale
price
of
the
goods
in
the
transactions
in
respect
of
which
the
deduction,
refund
or
payment
by
the
Minister
is
applied
for,
or
(b)
the
contract
price
where
the
goods
were
used
in
carrying
out
a
contract
and
no
sale
price
of
the
goods
in
the
transactions
in
respect
of
which
the
deduction,
refund
or
payment
by
the
Minister
is
applied
for
can
be
established.
by
a
percentage
thereof
determined
by
the
Minister
after
taking
into
account
the
class
of
the
goods
and
the
nature
of
and
parties
to
the
transaction
that
resulted
in
the
application
for
a
deduction,
refund
or
payment
by
the
Minister.
Under
date
of
December
1,
1975,
Memorandum
ET
406
was
issued
stating,
in
part,
This
memorandum
deals
with
the
refund
of
sales
tax
paid
by
schools,
universities,
other
similar
educational
institutions,
public
libraries
and
certain
student
residences,
on
purchases
of
materials
used
exclusively
in
the
construction
of
buildings.
It
also
outlines
the
various
sales
tax
exemptions
which
are
of
interest
to
educational
institutions.
Tax
Computation
Methods
5.
(a)
Identification
Method
The
exact
amount
of
sales
tax
paid
under
the
Act
on
materials
purchased
for
use
in
the
construction
of
buildings
may
be
ascertained
through
enquiries
from
suppliers.
Documentary
evidence
substantiating
the
exact
amount
of
tax
originally
paid
to
the
Crown
must
be
kept
on
file
for
examination
by
officers
of
the
Department.
(b)
Simplified
Method
The
following
formula
applies
to
progress
payments
for
goods
installed
on
or
after
November
19,
1974.
A.
Total
Contract
Payment
—
exclusive
of
any
payment
for
land,
architects’
fees,
legal
fees,
equipment
rental,
consultant
fees,
engineering
fees,
temporary
services,
hoarding,
snow
removal,
cleanups,
insurance,
performance
bonds
and
building
permits,
diesel
fuel,
winter
protection,
scaffolding,
provincial
tax
and
other
similar
|
items
|
$1,000.00
|
|
B.
Less
73'/}%
to
extract
non
taxable
factors
and
provide
an
al-
|
|
|
lowance
for
goods
qualifying
under
Tariff
Item
69605-1
or
other
ex
|
|
|
emption
for
schools
|
$
733.33
|
|
C.
Taxable
value
of
Materials
|
$
266.67
|
|
5%
of
90%
of
266.67
|
|
12.00
|
|
12%
of
10%
Of
266.67
|
|
3.20
|
|
Amount
refundable
|
$
|
15.20
|
In
issue
here
is
the
73'/j
per
cent
deduction
stipulated
in
paragraph
B
of
the
simplified
method.
Tariff
Item
69605-1
had
been
repealed
and
was
not
in
force
at
any
time
material
to
the
School
Board's
claim.
That
tariff
item
read:
Scientific
apparatus
(and
ancillary
equipment
thereto),
utensils,
instruments,
and
preparations,
including
boxes
and
bottles
containing
them;
glassware
for
laboratory
or
scientific
uses;
maps,
charts,
motion
picture
films,
filmstrips,
microfilms,
slides
and
other
photographic
reproductions
and
pictorial
illustrations;
pamphlets
and
magazines;
reproductions
of
works
of
art;
sound
recordings
and
video
tape
recordings;
stencils
and
cards
specially
designed
for
the
preparation
of
library
index
cards;
models,
static
or
moving;
animals
as
research
or
experimental
subjects;
living
plants,
seeds,
cuttings,
buds,
scions,
tubers,
bulbs
and
root-stock;
mechanical
equipment
not
otherwise
enumerated
in
this
item
when
of
a
class
or
kind
not
made
in
Canada;
parts
of
all
the
foregoing.
All
the
foregoing
when
for
the
use
of
any
society
or
institution
incorporated
or
established
solely
for
religious,
educational,
scientific
or
literary
purposes,
or
for
the
encouragement
of
the
fine
arts
(namely
architecture,
sculpture,
painting,
engraving
and
music),
or
for
the
use
of
any
public
hospital,
public
library,
public
museum,
university,
college,
academy,
school
or
seminary
of
learning
in
Canada
and
not
for
sale
or
rental
unless
to
those
mentioned
herein,
under
such
regulations
as
the
Minister
may
prescribe.
.
.
[Emphasis
added.]
Coincidental
with
the
repeal
of
Tariff
Item
69605-1,
Schedule
III,
Part
III
to
the
Excise
Tax
Act
was
amended
by
the
addition
of
paragraphs
12
and
13,
which,
by
virtue
of
section
29
of
the
Act,
continued
the
exemption
from
excise
tax
of
some
of
the
goods
enumerated
in
the
tariff
item.
An
exception
was
"mechanical
equipment
not
otherwise
enumerated
in
this
item
when
of
a
class
or
kind
not
made
in
Canada”.
If,
as
the
School
Board
contends,
such
mechanical
equipment
was
provided
by
contractors
under
the
terms
of
school
construction
contracts,
excise
tax
ought
to
have
been
paid
in
respect
of
that
equipment
and
a
refund
provided
in
respect
thereof.
The
agreed
statement
of
facts
states:
11.
When
considering
the
application
with
respect
to
the
Materials,
the
Minister
did
not
consider
"the
class
of
the
goods
and
the
nature
of
and
parties
to
the
transaction
that
resulted
in
the
application”
at
all,
except
that
he
did
as
follows:
(a)
He
decided
that
the
Application
disclosed
that
the
Materials
were
within
a
category
defined
in
the
said
Memoranda
ET406
for
which
discounts
were
thereby
prescribed.
(b)
He
decided
that
any
amount
to
be
paid
pursuant
to
the
Application
would
be
determined
using
the
73'A%
discount
which
the
said
Memoranda
ET406
prescribed
in
respect
of
progress
payments
for
work
completed
prior
to
the
1st
day
of
October,
1984.
I
see
no
error
within
the
contemplation
of
section
28
of
the
Federal
Court
Act
in
the
Minister
determining
and
announcing
in
advance
the
factors
which
he
would
apply
in
calculating
the
amount
of
a
refund
should
the
applicant
therefor
elect
to
apply
by
way
of
the
simplified
method.
That
is
the
applicant's
choice
and
he
can
calculate
the
result.
If
he
does
not
wish
to
opt
for
that
method,
he
can
pursue
the
identification
method.
It
may
entail
considerable
work
but
there
is
nothing
unfair
about
requiring
the
applicant
for
a
refund
to
establish
the
amount
he
is
entitled
to.
I
am,
however,
persuaded
that,
in
this
case,
circumstances
had
changed
since
the
73’/)
per
cent
factor
had
been
established
and
that
the
requirements
of
subsection
3(2)
of
the
Formula
Refund
Regulations
were
not
met.
That
factor
was
determined
and
announced
expressly
as
taking
into
account
the
exemption
from
excise
tax
effected
by
incorporation
of
Tariff
Item
69605-1.
The
exemption
substituted
is
not
identical
and
there
is
no
basis
upon
which
this
Court
can
conclude
whether
or
not
the
difference
is
of
any
consequence.
That
is
for
the
Minister
to
decide
in
any
event.
In
failing
to
consider
it
he
did
not,
as
he
must,
take
into
acount
the
class
of
goods
that
resulted
in
the
application.
I
would
allow
this
section
28
application,
set
aside
the
decision
of
the
Minister
of
National
Revenue
made
September
13,
1985,
and,
pursuant
to
paragraph
52(d)
of
the
Federal
Court
Act,
refer
the
matter
back
to
the
Minister
for
reconsideration
on
a
basis
not
inconsistent
with
these
reasons.
Application
allowed.
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