Rex v. Jack Morris, [1950] CTC 186

SPENCE, J.:—(ORAL REASONS FOR JUDGMENT) In the matter of Rex v. Jack Morris, trading under the firm name of Jack’s Auto Parts, and the said Jack Morris.

This is a ease stated by His Worship, Magistrate Austin O’Connor, K.C., at the request of Counsel for the Crown upon the information and complaint of James K. Stitt of the City of Ottawa.

The Accused had been charged under the provisions of Section 41 of the Income War Tax Act that he did unlawfully fail to file information and return a Form T-4 for the year 1948 as required of him to be given pursuant to Section 41 of that Statute.

Upon the trial before Magistrate O’Connor, the Crown produced a letter dated 19th July, 1949, signed by Mr. Scully as Deputy Minister of National Revenue (Taxation) and an affidavit sworn by Shirley R. Lonquist on the 29th October, 1949, in which it was set out that the Accused failed to comply with the demand made in the letter to which I have just referred.

The Defence, at the close of the Crown’s case, moved to dismiss the prosecution on the ground that the demand signed by Mr. Scully was not such a demand as was permitted by the provisions of Section 41, sub-section 1, of the said Statute.

His Worship, Magistrate O’Connor, gave effect to that defence and dismissed the charge and then, at the request of the Crown, stated a case in which he asked whether he was right in determining that the Minister alone and not the Deputy Minister could make such a demand.

The learned magistrate, in coming to the conclusion to which he did come, was of the opinion that Section 31 sub-section 1 clause (1) of the Interpretation Act of Canada could not be applied to enable the Deputy Minister to exercise the power in Section 41 subsection 1 of the Income War Tax Act because that section was only applicable ‘‘unless the contrary intention appears,’’ and Section 41 subsection 3 of the Income War Tax Act did give certain powers to the Deputy Minister mention- ing in the same subsection both the Minister and the Deputy Minister and that, therefore, it must be concluded that the Legislature intended to divide the functions between the Minister and the Deputy Minister.

Magistrate O’Connor also referred to Section 33 which contained a like reference to both the Minister and the Deputy Minister.

Counsel for the Crown in argument of the said case pointed out that by Statutes of Canada 1943-1944, Chapter XXIV, Section 3 subsection 4 an amendment of the scheme of the Income War Tax Act was wrought by providing that where the words ""Commissioner of Income Tax’’ appeared throughout the Statute they should be read as being " ‘Deputy Minister of National Revenue (Taxation),’’ and that the effect of the amendment was to confer upon the Deputy Minister the powers conferred by the provisions of Section 31 of the Interpretation Act, Section 31 subsection 1 rather than the limited power formerly exercised by the Commissioner. When it is understood that the word ""Deputy Minister’’ appears in both Sections 33 and 41 of the Income War Tax Act, and because of this fact, then the magistrate’s reason for holding that the Section contemplates a division of functions between the Minister and his Deputy becomes less persuasive. It is true that Statute does assess a penalty and should be strictly construed. It is, none the less, true that one must give to a Statute, unless by so doing you twist its natural words, a meaning which will permit the Statute to be operative.

in this case, Section 41 permits the Minister to make a demand for further information so that the necessary assessment for income tax purposes may be made and then provides that upon the taxpayer’s failure to comply therewith, certain penalties accrue. That power, the power to demand returns, is not a power which requires the exercise of any Ministerial discretion and, as has been said during the argument and as is a matter of common knowledge, that power is exercised tens of thousands of times each year. The exercise of the power does not place the taxpayer under any penalty. The taxpayer places himself under such penalty when he fails to comply with the demand and it would seem to matter not the slightest to the taxpayer whether the notice which he received was signed by the Minister or by the Deputy.

I think, therefore, it is my duty to interpret Section 41 of the Income Tax Act so as to permit its operation in the normal course of departmental business and that Section 31 subsection 1 of the Interpretation Act should apply thereto to permit the Deputy Minister to make the demand.

I hold that the words ‘‘unless a contrary intention appears’’ do not prevent me so interpreting Section 41 because of the alteration in the Statute wrought by the Statutes of 1943-1944 to which I have referred.

I, therefore, am of the opinion that the answer to the question put by His Worship Magistrate O’Connor in paragraph 8 in the said case should be "‘No,'' and, exercising the power conferred in the Criminal Code, I reverse the decision of the Magistrate and register a conviction assessing the minimum fine of $25.00 or, on failure of payment thereof, imprisonment for seven days.

This is not a case in which costs apply.

Appeal allowed.