Duff,
C.J.C.:—The
respondents
are
a
company
engaged
in
the
business
of
wholesale
dealers
in,
and
dyers
and
dressers
of,
raw
furs.
They
purchase
raw
furs
or
skins
from
trappers
and
other
persons,
dress
and
dye
these
skins
and
sell
them
to
furriers
who
make
them
into
fur
garments.
Occasionally
they
sell
to
retailers.
Other
dyers
and
dressers
in
Canada
it
seems
dress
and
dye
furs
for
furriers,
but,
as
a
rule,
they
are
not
owners
of
the
furs.
The
respondents,
on
the
other
hand,
dress
and
dye
their
own
furs
and
resell
them.
The
respondents
insist
upon
the
importance
of
the
fact
that
the
furs,
in
the
operations
to
which
they
subject
them,
are
neither
cut
nor
"
1
trimmed’
‘
by
them,
but
that
they
confine
themselves
to
cleaning,
combing
and
dyeing
the
raw
furs.
The
controversy
concerns
the
basis
of
taxation,
under
the
Special
War
Revenue
Act,
in
respect
of
furs
sold
by
the
respondents.
Before
and
after
the
promulgation
of
Regulation
17,
to
which
reference
will
be
made
hereafter,
the
respondents
held
a
licence
under
the
Special
War
Revenue
Act
(1915)
and
amendments,
in
which
they
were
variously
described
as
fur
dressers
and
dyers,
and
manufacturing
fur
dressers
and
dyers.
Prior
to
the
passing
of
the
regulation
mentioned,
they,
being
licensed
in
the
same
form,
sold
mainly
to
furriers
who
were
licensed
manufacturers,
although
there
were
sales
also
to
persons
who
were
not
licensees.
As
regards
the
former
sales,
they
were,
by
the
proviso
of
sec.
19BBB
(1),
exempt
from
sales
tax.
As
regards
the
latter,
they
did
not
dispute
their
liability
to
pay,
and
did
pay
sales
tax.
After
the
promulgation
of
the
regulation,
their
customers,
the
furriers,
ceased
to
be
licensees
and,
consequently,
(assuming
that
sec.
19BBB
(1)
applied
to
them
and
that
they
were
liable
to
pay
sales
tax
thereunder),
they
continued
to
pay
the
tax.
Other
dyers
and
dressers,
however,
by
force
of
the
regulation,
came
under
another
rule.
They,
dyers
and
dressers,
that
is
to
say,
who
performed
the
work
of
dyeing
and
dressing
for
others,
were
obliged
by
the
regulation
to
pay
a
tax
on
the
"current
market
value”
of
the
dressed
furs.
The
respondents
paid
taxes
under
sec.
19BBB
(1),
or
duty
on
the
sale
price
of
the
goods.
A
discrimination
was
thereby
effected,
the
respondents
complain,
between
them
and
their
competitors,
who,
being
the
owners
of
furs,
had
them
dyed
and
dressed
by
dyers
and
dressers.
In
practice,
it
appears
that
in
these
last
mentioned
cases,
the
market
value
of
the
fur
was
taken
by
the
revenue
department
to
be
the
cost
price
of
the
fur
plus
the
amount
paid
to
the
dyer
and
dresser,
and
the
sales
tax
at
the
statutory
rate
was
calculated
thereon.
The
respondents,
on
the
other
hand,
who
paid
their
tax
pursuant
to
the
provisions
of
sec.
IDBBB
(1),
paid
upon
the
price
which
they
charged
the
purchaser,
that
is
to
say,
they
paid,
not
only
upon
the
cost
of
dyeing
and
dressing
and
the
original
cost
of
the
fur,
but
they
paid
the
tax
rate
on
their
profit
as
well.
There
appears
to
be
no
manner
of
doubt
about
the
facts,
and
the
primary
question
is
whether
or
not
the
respondents
are
right
in
their
contention
that
they
ought
to
be
taxed
upon
the
same
footing
as
their
competitors.
The
question
does
not
seem
to
be
susceptible
of
elaborate
discussion.
Perhaps
the
most
convenient
way
of
putting
it
is
first
of
all
to
set
out
the
provisions
of
sees.
86
(a)
(b)
and
(c)
and
87
of
c.
179,
R.S.C.
1927,
which
contain
the
material
parts
of
sec.
19BBB
(1),
in
respect
of
which
there
has
been
no
substantial
change
:
86.
In
addition
to
any
duty
or
tax
that
may
be
payable
under
this
Act
or
any
other
statute
or
law,
there
shall
be
imposed,
levied
and
collected
a
consumption
or
sales
tax
of
four
per
cent
on
the
sale
price
of
all
goods;
"‘(a)
produced
or
manufactured
in
Canada,
payable
by
the
producer
or
manufacturer
at
the
time
of
the
sale
thereof
by
him;
or
"‘(b)
imported
into
Canada,
payable
by
the
importer
or
transferee
who
takes
the
goods
out
of
bond
for
consumption,
at
the
time
when
the
goods
are
imported
or
taken
out
of
warehouse
for
consumption;
or
"
(0)
sold
by
a
licensed
wholesaler
to
another
than
a
licensed
manufacturer,
and
(if
the
goods
were
manufactured
or
produced
in
Canada)
the
tax
shall
be
computed
on
the
price
for
which
the
goods
are
sold
by
the
licensed
manufacturer
to
the
said
licensed
wholesaler,
and
the
said
price
shall
include
the
amount
of
the
excise
duties
on
goods
sold
in
bond.
1’87.
Whenever
goods
are
manufactured
or
produced
in
Canada
under
such
circumstances
or
conditions
as
render
it
difficult
to
determine
the
value
thereof
for
the
consumption
or
sales
tax
because
"‘(a)
a
lease
of
such
goods
or
the
right
of
using
the
same
but
not
the
right
of
property
therein
is
sold
or
given;
or
"(b)
such
goods
have
a
royalty
imposed
thereon,
the
royalty
is
uncertain,
or
is
not
from
other
causes
a
reliable
means
of
estimating
the
value
of
the
goods
;
or
"(c)
such
goods
are
manufactured
by
contract
for
labour
only
and
not
including
the
value
of
the
goods
that
enter
into
the
same,
or
under
any
other
unusual
or
peculiar
manner
or
conditions
;
or
‘“(d)
such
goods
are
for
use
by
the
manufacturer
or
producer
and
not
for
sale
;
‘‘the
Minister
may
determine
the
value
for
the
tax
under
this
Act
and
all
such
transactions
shall
for
the
purposes
of
this
Act
be
regarded
as
sales.’’
The
first
contention
on
behalf
of
the
respondents
is
that
they
are
not
producers
or
manufacturers
within
the
meaning
of
s.
86.
Although
the
point
does
not
in
any
way
govern
our
decision,
we
cannot
properly
proceed
to
the
consideration
of
the
substance
of
this
contention
without
first
observing
that
if
the
article
sold
by
the
respondents
is
not
an
article
produced
or
manufactured
in
Canada
within
the
meaning
of
sec.
86,
it
is
difficult
to
understand
upon
what
ground
it
can
be
contended
that
it
is
an
article
"manufactured
or
produced’’
within
the
meaning
of
sec.
87.
If
the
skin
or
fur
as
cleaned,
"‘made
pliable’’,
to
use
the
expression
of
one
of
the
witnesses,
and
dyed
by
them
and
sold
by
them,
as
"‘merchantable
stock-in-trade’’,
to
use
an
expression
assented
to
by
the
principal
witness
on
behalf
of
the
respondents,
does
not
fall
within
the
description
1***
goods
produced
or
manufactured
in
Canada’’
(sec.
86),
it
is
not,
at
all
events,
immediately
obvious
how
it
can
fall
within
the
description
"‘goods
*
*
*
manufactured
or
produced
in
Canada’’
within
the
meaning
of
sec.
87.
Furthermore,
there
is
nothing
before
us
to
indicate
that
the
goods,
which
were
the
subject
of
sales
in
respect
of
which
the
respondents
paid
the
taxes
now
reclaimed,
fall
within
sec.
87
(c)
;
that
is
to
say;
that
they
are
goods
manufactured
under
contract
for
labour
only,
and,
indeed,
if
they
are
not
‘
4
manufactured”,
it
is
difficult
to
bring
them
within
the
verbal
frame
of
sec.
87
(c).
We
are
not
able
to
agree
with
the
view
advanced
by
the
respondents
that
these
articles
sold
by
them
are
not
within
the
contemplation
of
sec.
86.
The
words
‘‘produced’’
and
"‘manu-
factured’’
are
not
words
of
any
very
precise
meaning
and,
consequently,
we
must
look
to
the
context
for
the
purpose
of
ascertaining
their
meaning
and
application
in
the
provisions
we
have
to
construe.
Sec.
19BBB
(1)
gives
us
some
assistance.
Goods
which
are
to
be
used
in,
or
wrought
into,
or
attached
to,
articles
to
be
manufactured
or
produced
for
sale
may
still
be
"‘goods
produced
or
manufactured”
in
Canada
within
the
meaning
of
the
section.
And
the
matter
is
further
elucidated
by
reference
to
subsec.
4,
which
enumerates
many
exceptions.
By
that
subsection,
the
section
shall
not
apply
to
"‘sales
or
importations”
of
a
number
of
different
things.
Among
these
there
is
a
significant
item
in
these
words,
“pulpwood,
tan
bark
and
other
articles
the
product
of
the
forest
when
produced
and
sold
by
the
individual
settler
or
farmer.
‘
‘
This
suggests
rather
pointedly
that
the
phrase
‘‘goods
produced
or
manufactured’’
contemplates
such
things
as
pulpwood
and
tanbark,
to
which
it
appears
to
be
assumed
the
section
will
apply
when
produced
and
sold
by
others
than
the
‘‘individual
settler
or
farmer’’,
by,
for
example,
the
holder
of
a
timber
berth
or
licence.
Light
is
thrown
upon
the
meaning
of
the
word
“produced”
by
the
fact
that
pulpwood
and
tan
bark
and
other
articles,
the
product
of
the
forest,
are
contemplated
as
being
produced
within
the
meaning
of
the
statute.
We
have
further
the
item
‘‘wool
no
further
prepared
than
washed’’
which
seems
to
imply
that
wool
still
further
prepared,
by
dyeing
for
example,
if
sold,
comes
within
the
incidence
of
the
tax.
Then
we
have
‘‘raw
furs’’
which
is
not
without
its
implication.
It
is
not
easy
to
see
why
a
raw
fur
which
is
separated
from
the
animal
upon
which
it
grew,
when
combed,
‘
1
made
pliable”
and
dyed
and
thereby
turned
into
‘‘merchantable
stock-in-trade’’,
has
not
become
something
which
is
‘‘produced’’
if
the
term
"
1
produced”
is
properly
applicable
to
such
things
as
‘‘pulpwood’’
and
‘‘tan
bark’’.
Nor
does
the
case
appear
to
be
very
different
if
the
operation
begins
by
a
purchase
of
the
fur
which
has
already
been
taken
from
the
animal
and
ends
with
the
large
stage
of
preparation
which
fits
it
to
be
sold
as
a
fur
that
can
be
described
as
‘‘dressed
and
dyed.”
We
think
the
sales
made
by
the
respondents
are
sales
within
the
scope
of
sec.
86.
This
seems
to
be
sufficient
to
dispose
of
the
case.
It
may
be
that
in
working
out
the
statute
there
has
been
some
regrettable
inequality,
but
the
respondents’
claim
necessarily
rests
upon
the
proposition
that
they
were
taxable
only
under
the
regulation
which
we
think
very
plainly
is
not
intended
to
apply
to
sales
within
the
contemplation
of
sec.
86.
Although
it
does
not
strictly
enter
into
the
argument,
it
may
not
be
out
of
place
to
observe
that
the
dyer
or
dresser
who
neither
owns
the
fur
nor
sells
the
fur,
within
the
proper
meaning
of
the
word,
is
clearly
not
within
sec.
86.
He
may
come
within
sec.
87
and,
if
so,
the
transaction
between
him
and
the
owner
of
the
fur,
which
is
not
truly
a
sale
at
all,
is
deemed
to
be
a
sale
for
the
purposes
of
the
Act.
The
respondents,
as
we
have
already
observed,
are
not
shewn
to
be
within
sec.
87,
but,
if
they
are
a
‘‘producer’’
or
‘‘manufacturer’’
they
are
within
sec.
86.
We
do
not
think
it
necessary
to
express
any
opinion
upon
the
question
of
law
that
might
arise
for
discussion
if
we
had
taken
a
different
view
of
the
statute
and
the
regulation.
The
appeal
should
be
allowed
and
the
action
dismissed
but,
in
the
circumstances
there
should
be
no
costs.
Appeal
allowed,
no
costs.
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