Date: 20020613
Docket:
2001-3886-GST-I
BETWEEN:
MEL
VENKAT,
Appellant,
and
HER MAJESTY THE
QUEEN,
Respondent.
Reasonsfor
Judgment
Bowman,
A.C.J.
[1]
This appeal is from an assessment of $867.15. Although the issue
boils down ultimately to whether I accept the appellant's
evidence that he submitted a claim for input tax credits
("ITCs") within the statutory time limit, a brief
outline of the background is in order.
[2]
The appellant claimed a refund of net tax of $867.15 in his 1993
personal income tax return rather than in a GST return. This
should have been claimed in a GST return for the period
October 1, 1993 to December 31, 1993. The appellant
carried on business as a sole proprietor at that time as a
distributor of video cassettes and tapes.
[3]
On July 22, 1996 the appellant was reassessed under the
Income Tax Act and the $867.15 Employee and Partner GST
Rebate originally claimed and allowed was disallowed.
[4]
On August 7, 1996 the appellant wrote to Revenue Canada
presumably objecting to the assessment although his letter is not
as clear as it might be. On December 19, 1996 Revenue Canada
responded as follows.
Dear Sir:
Re:
1993 and 1995 Taxation Years
We
have reviewed your request received August 8, 1996 and we have
determined the following.
We
did not adjust the Employee and Partner Goods and Services Tax
Rebate because our records indicate that the GST Account, number
128381290, was a sole-proprietorship. Therefore, you do not
qualify for the rebate on your T1 returns.
We
trust this clarifies the matter.
[5]
On September 9, 1998 Revenue Canada sent him a further
letter presumably in response to a further request. It
read:
Dear Sir:
Re:
Your 1993 individual income tax return
We
have reviewed your request to adjust your return. However, we are
unable to make an adjustment for the following
reasons:
Self-employed individuals
who are registered for the GST are not eligible for the Employee
and Partner GST Rebate. However, as a self-employed individual,
you may be able to claim an input tax credit for the GST you paid
on supplies acquired for your commercial activities.
You must file a GST return
at regular intervals, showing the amount of GST you were charged.
You recover the GST by claiming an input tax credit on the
appropriate line of the GST return.
For more information
regarding eligibility for the input tax credit, contact the
appropriate information line at 669-2990 or
1-800-959-7775.
We
trust this information will clarify the matter.
[6]
On March 11, 1999 he wrote to Revenue Canada. The letter
contains the following statements.
I just spoke to an officer in Revenue Canada and was advised the
following:
·
To fax the attached copy
of my GST return of 1993 which was mailed in Aug.
'96.
...
4-
In 1996, I told the problem and was given to understand that my
GST rebate per attached copy of GST return would be
applied to my personal tax. ie account to
account transfers.
[7]
It appears that attached to that letter was a GST return bearing
the date 12/08/96 signed by the appellant and claiming a refund
of $867.15. Written across the top of the return are the words
"Amended Revised - See letter
attached".
[8]
The assumptions on which the denial of the rebate was based are
the following.
5.
In so assessing the Appellant, the Minister made the following
assumptions of fact:
a)
the Appellant registered under Part IX of the Act
effective March 14, 1991 and was assigned GST registration number
128381290;
b)
the Appellant was in the business of audio/video
distribution;
c)
at all material times, the Appellant was required to collect GST
on its taxable supplies/sales and to remit GST on a quarterly
basis;
d)
the Appellant reported NIL sales and NIL net tax owing for he
period from March 14, 1991 to September 30, 1993;
e)
on August 1, 1995, the GST return was initially filed by the
Appellant for the period October 1, 1993 to December 31, 1993
reporting NIL sales and NIL net tax owing;
f)
the Appellant reported NIL sales and NIL net tax owing for the
period from January 1, 1994 to September 30, 1994;
g)
by GST return submitted by the Appellant in a letter dated March
11, 1999, the Appellant purported to amend his return for the
period October 1, 1993 to December 31, 1993, to report sales of
$581, GST collected of $41 and input tax credits
("ITCs") of $908.15, arriving at a net tax refund claim
of $867.15 (the "Credit");
h)
the $908.15 ITCs was paid or became payable by the Appellant in
his October 1, 1993 to December 31, 1993 reporting
period;
i)
the Appellant did not submit a claim for the Credit prior to
March 11, 1999;
j)
at all material times, the Appellant was aware of his obligations
and liabilities under the Act;
k)
the Appellant filed all GST returns for the periods from March
1991 to December 1993 by the end of 1995; and
l)
the Appellant failed to claim the ITCs in respect of the period
October 1, 1993 to December 31, 1993 within the statutory time
limit.
[9]
Under paragraph 225(4)(b) of the Excise Tax
Act the ITCs claimed for a reporting period must be claimed
within four years of the end of the reporting period. The last
time for claiming the ITCs in the return for the period ending on
December 31, 1993 would have been some time in December 1997. The
appellant says he filed the return with his letter of
August 7, 1996. The Crown's witness, Mr. Sidhu,
testified that there is no record of the return being filed
before March 11, 1999.
[10]
I reserved judgment partly because the evidence was contradictory
but principally because I believe judges should be careful about
making findings of credibility in oral judgments delivered from
the bench. In 1084767 Ontario Inc. operating as Celluland v.
M.N.R., file numbers 2001-3945(EI) and 2001-3946(CPP),
May 2, 2002, I said
[8]
The evidence of the two witnesses is diametrically opposed. I
reserved judgment because I do not think findings of credibility
should be made lightly or, generally speaking, given in oral
judgments from the bench. The power and obligation that a trial
judge has to assess credibility is one of the heaviest
responsibilities that a judge has. It is a responsibility that
should be exercised with care and reflection because an adverse
finding of credibility implies that someone is lying under oath.
It is a power that should not be misused as an excuse for
expeditiously getting rid of a case. The responsibility that
rests on a trial judge to exercise extreme care in making
findings of credibility is particularly onerous when one
considers that a finding of credibility is virtually
unappealable.
[11]
I accept that there is no record in Revenue Canada of the return
being filed before March 11, 1999. This is not, of course,
conclusive. In a vast bureaucratic organization like Revenue
Canada it is inevitable that documents will get lost or be
misfiled or misplaced.
[12]
Mr. Venkat testified that he faxed, mailed and hand
delivered the return on August 8, 1996. The chances of all
three copies being lost by Revenue Canada are remote. I think the
more probable conclusion — to use the language appropriate
to a civil standard of proof — is that the return was not
filed until March 11, 1999. The appellant's assertion
that the return was filed at the same time as his letter of
August 7, 1996 (whether with it or separately) is somewhat
inconsistent with the fact that nowhere in the letter does the
appellant mention the return, nor is any mention made of it in
the reply of December 9, 1996 from Revenue Canada. Also, it
is passing strange that the return itself is dated
August 12, 1996, four days after the date upon which the
appellant says he filed it.
[13]
In my opinion the appellant has not established that the return
was filed before March 11, 1999.
[14]
The appeal is dismissed.
Signed at Ottawa, Canada, this 13th day of
June 2002.
"D.G.H. Bowman"
A.C.J.
COURT FILE
NO.:
2001-3886(GST)I
STYLE OF
CAUSE:
Between Mel Venkat and
Her Majesty The Queen
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
May 7, 2002
REASONS FOR JUDGMENT
BY: The Honourable D.G.H.
Bowman
Associate Chief Judge
DATE OF
JUDGMENT:
June 13, 2002
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Nadine Taylor
COUNSEL OF RECORD:
For the
Appellant:
Name:
--
Firm:
--
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-3886(GST)I
BETWEEN:
MEL VENKAT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on May 7, 2002 at Vancouver,
British Columbia, by
The Honourable D.G.H. Bowman
Associate Chief Judge
Appearances
For the
Appellant:
The Appellant himself
Counsel for the Respondent:
Nadine Taylor
JUDGMENT
It
is ordered that the appeal from the assessment made under the
Excise Tax Act, notice of which is dated February 15,
2000, be dismissed.
Signed at Ottawa, Canada,
this 13th day of June 2002.
A.C.J.
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