Date: 19980831
Docket: 96-4091(GST)I
BETWEEN:
550285 ALBERTA LTD.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Beaubier, J.T.C.C.
[1] This appeal pursuant to the
Informal Procedure was heard at Edmonton, Alberta on August
13, 1998. The President of the Appellant, Harbans Singh
Saini, was the only witness.
[2] Paragraphs 6 to 11 inclusive of
the Reply to the Notice of Appeal read as follows:
6. By Notice
of Assessment number 10DT1701780, dated November 10, 1995, the
Minister assessed the Appellant net tax of $3,212.58, penalty of
$123.32 and interest of $152.93 for the period December 1, 1994
to February 28, 1995 ("the relevant period"). The
amount assessed as net tax was calculated as follows:
net tax reported on
returns
($1,054.20)
input tax credits
disallowed
4,266.78
net tax
assessed
$3,212.58.
7. By Notice
of Reassessment number 10DT1701821, dated December 1, 1995, the
Minister assessed the Appellant net tax of $1,092.35 for the
relevant period, which was calculated as follows:
net tax per Notice of Assessment
#10DT1701780
$3,212.58
additional input tax credits
allowed
(4,266.78)
input tax credit on vehicle
disallowed
2,146.55
net tax
assessed
$1,092.35.
8. The
Appellant objected to Notice of Reassessment number 10DT1701821
by a Notice of Objection postmarked January 24, 1996.
9. The
Minister confirmed the assessment by a Notice of Decision dated
July 8, 1996.
10. In so reassessing the
Appellant, the Minister made the following assumptions of
fact:
(a) the facts
admitted or stated above;
(b) the Appellant
registered for the purposes of the Act under the trade name
Parkland Motel, Rimbey Alberta, effective February 17, 1993, and
was assigned GST registration number 134649821;
(c) the Appellant
sold the Parkland Motel in July 1994 and acquired the Lodge Motel
in Lloydminster, Alberta;
(d) the Appellant
was required to file its returns on a quarterly basis, with a
year end of the end of February;
(e) on the return
for the reporting period which ended February 28, 1995, the
Appellant reported tax collectible of $3,212.58, claimed input
tax credits of $4,266.78 and claimed a net tax refund of
$1,054.20;
(f) the
$4,266.78 claimed by the Appellant as input tax credits on the
return for the reporting period which ended February 28, 1995,
included $2,146.55 with respect to a 1994 Dodge Grand Caravan
(the "vehicle");
(g) Great West
Plymouth supplied the vehicle to Harbans Singh Saini and Daljit
Kaur Saini, for consideration of $30,665.00, plus tax of
$2,146.55;
(h) a 1992 Chevrolet
Astrovan, which was owned by Harbans Singh Saini, was traded-in
as part of the consideration for the vehicle;
(i) no tax was
charged or collected on the 1992 Chevrolet Astrovan which was
traded-in;
(j) the
vehicle was registered in the name of Harbans Singh Saini;
(k) the tax with
respect to the vehicle was not paid or payable by the
Appellant;
(l) the
vehicle was not supplied to the Appellant by Great West Plymouth
or anyone else;
(m) Harbans Singh Saini
and Daljit Kaur Saini did not use the vehicle exclusively in
their commercial activities;
(n) the Appellant
did not use the vehicle primarily in the course of its commercial
activities;
(o) the vehicle was
not used primarily for the transportation of goods or equipment
in the course of gaining or producing income;
(p) prior to filing
its returns for the reporting periods which ended February 28,
1995, the Appellant did not obtain sufficient documentation,
which contained the prescribed information, as required by
subsection 169(4) of the Act and sections 2 and 3 of the
Input Tax Credit Information Regulations thereunder, to
support the input tax credit with respect to the vehicle which
was claimed by the Appellant and disallowed by the Minister.
B. ISSUE TO
BE DECIDED
11. The issue to be
decided in this appeal is whether the Appellant is entitled to an
input tax credit in the amount of $2,146.55 with respect to the
vehicle.
[3] Except for assumptions (a), (k),
(m), (n) and (o), they are correct. The Caravan purchased was a 7
passenger seated van. After a few days, Mr. Saini removed all but
seats for two people. He is an industrial electrician and he used
the van to travel to and from his home in St. Albert to a newly
purchased motel in Lloydminster which he was improving. He had a
separate Tempo car for his wife and four children.
[4] The Caravan is a passenger vehicle
and was sold with seats for seven in it. Mr. Saini tried to
purchase and finance it through the Appellant, but its bank would
not allow that. So he and his wife purchased and financed it
individually. His position is that he and his wife were trustees
for the Appellant. Its financial statements were not filed. There
is no evidence as to the category in which the vehicle was
licensed or insured.
[5] Mr. Saini testified that after the
first few days the vehicle was used solely in commercial
activities. The Appellant's name is not on the sales
agreement. The documentation described in assumption (p) was not
provided pursuant to the Act and Regulations.
[6] Because the Act and
Regulations were not complied with, the Bill of Sale is
not in the Appellant's name and there is no agreement of
trust or corporate record in evidence indicating that the van is
the Appellant's, the appeal is dismissed.
Signed at Ottawa, Canada this 31st day of August 1998.
J.T.C.C.
Email this Content