Iris Technologies – Federal Court of Appeal finds that a Federal Court action to compel CRA to pay a net tax refund was obliterated when CRA then assessed

Iris appealed a Federal Court order, dismissing its request for mandamus to compel the release of $21.85 million in GST/HST tax refunds pending the conclusion of an on-going audit and assessment.

At the outset of the appeal to the FCA, the Minister was granted permission to file the affidavit of a CRA official indicating that Iris’ net tax for the relevant reporting periods had now been assessed and there was no net tax refund shown as owing. Rennie JA found that this affidavit met the usual tests for admission of fresh evidence at the appellate level, namely:

The evidence could not have been adduced at trial, it is relevant in that it bears on a decisive or potentially decisive issue on appeal, is credible, and could reasonably be expected to have affected the result in the Federal Court.

In going on to find that Iris’ appeal, in the light of this affidavit, should now be dismissed as moot, he stated:

The assessments are determinative of Iris’ net tax liability until the Minister makes a reassessment or the assessment is vacated by the Tax Court … .

…There is no credible basis on which it can be argued that this Court can compel the payment of the refunds claimed in the face of an assessment that the refunds are not owing.

Neal Armstrong. Summaries of Iris Technologies Inc. v. Canada (National Revenue), 2022 FCA 39 under Federal Courts Rules, Rule 351 and Federal Courts Act, s. 18.5.