APPEAL
by
the
defendant
from
the
judgment
of
the
Exchequer
Court
of
Canada,
Maclean
J.,
President
of
the
Court
ante
p.
322,
holding
the
appellant
liable
for
a
balance
of
sales
tax
on
rice
and
bags
sold
between
the
month
of
October,
1933
and
the
month
of
August,
1936,
with
penalties
and
interest,
totalling
$12,320.12.
The
defendant,
a
manufacturer
of
rice
and
bags,
sold
its
entire
output
during
the
period
in
question
herein
to
the
Canada
Rice
Sales
Company,
a
partnership,
the
members
of
which
were
with
one
exception
only,
shareholders
in
defendant
company,
and
in
that
instance,
the
partner
represented
a
limited
company
which
was
a
shareholder
in
defendant
company.
The
partnership
purchased
from
defendant
at
a
price
lower
than
the
current
wholesale
price,
and
sold
at
the
current
wholesale
price.
The
partners
divided
any
profits
accruing
to
the
partnership
in
the
proportion
of
their
holdings
in
defendant
company.
The
defendant
was
assessed
for
sales
tax
upon
the
selling
price
of
The
Canada
Rice
Sales
Company.
The
Exchequer
Court
of
Canada
held
that
the
Canada
Rice
Sales
Company
was
not
an
independent
trading
unit
or
business
enterprise
and
that
the
defendant
was
liable
for
the
sales
tax
and
penalty
assessed
on
the
selling
price
of
The
Canada
Rice
Sales
Company.
On
the
appeal
to
the
Supreme
Court
of
Canada,
after
hearing
argument
for
the
appellant,
and
without
calling
on
counsel
for
the
respondent,
the
Court
delivered
judgment
orally,
dismissing
the
appeal
with
costs.
The
Chief
Justice,
speaking
for
the
Court,
said:
"‘It
will
not
be
necessary
to
call
upon
you,
Mr.
Varcoe.’’
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