18 April 2000 GST/HST Interpretation 30565 - "All Due Dispatch"

On March 21, 2000, you sent an email to Dave Caron, Manager of the General Operations Unit, requesting clarification on what is meant by the words "with all due dispatch" when used in the application of subsection 229(1) of the Excise Tax Act (the Act).

You have before you a letter from XXXXX. They are GST/HST registrants that have a history of filing refunds (and filing late). They are accusing the CCRA of wrongfully withholding refunds while the CCRA waits for missing subsequent returns (12 periods totaling $55,000). They make reference to subsection 229(1) where it states that" the Minister shall pay the refund to the person will all due dispatch after the return is filed".

In light of the letter from XXXXX you are requesting an official ruling defining the exact meaning of the words all due dispatch with respect to subsection 229(1) and the way it applies to the withholding of refunds. You specifically need to know if you are sanctioned to withhold refunds when expected returns are missing.

Pursuant to subsection 229(1) of the Act, a net tax refund for a particular reporting period of a person may not be paid to the person until the person files all returns required to be filed under Division V of the Act for the period and for all preceding reporting periods of the person. The Minister is required to pay the refund to the person with all due dispatch. We are obligated to pay interest on the unpaid refund when the conditions are met.

The Act requires payment with all due dispatch. The courts under the Income Tax Act have looked at similar provisions. When determining a refund amount it is both fiscally responsible for the Department to examine the potential liability of the claimant where other amounts may be due and payable, and fair to both parties such that we are not put in the position of paying a refund and at the same time taking independent collection action to recover other amounts.

For the period subsequent to the credit return, since any potential tax liability has not been voluntarily declared through a tax return that is due and payable, the period in question can be assessed pursuant to subsection 296(1) of the Act. If there were an assessment, the set-off provisions in section 318 of the Act could be exercised. Since the Department is committed to the responsible administration and enforcement of the Excise Tax Act, requesting the subsequent returns that are due prior to paying a refund negates the somewhat stronger action of assessment and offset. Exercising the above enforcement provisions would require the Minister to take care in paying any refunds.

In conclusion, subsection 229(1) provides a discretion of the Minister to be exercised, for the good administration of the Act, with reason, justice and legal principles.