Docket: 2008-1207(GST)I
BETWEEN:
GERALD WEBSTER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard on January 12, 2009, at Fredericton, New Brunswick
Before: The Honourable
Justice Wyman W. Webb
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Toks C. Omisade
|
____________________________________________________________________
JUDGMENT
The appeal from the assessment made under Part
IX of the Excise Tax Act for the period from January 1, 2007
to December 31, 2007, dated January 18, 2008 and bearing number
08008003812340026 is dismissed, without costs.
Signed at Toronto, Ontario, this 29th day of January 2009.
“Wyman W. Webb”
Citation: 2009TCC62
Date: 20090128
Docket: 2008-1207(GST)I
BETWEEN:
GERALD WEBSTER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1]
The issue in this
appeal is whether the Appellant was required to pay instalments pursuant to
section 237 of the Excise Tax Act (the “Act”) in 2007. The
Appellant was assessed interest pursuant to subsection 280(2) of the Act
because he did not make any instalment payments in 2007.
[2]
The Appellant stated
that in late 2007 it was determined that he was an independent contractor and
not an employee when he was providing services to his company. He also
indicated that it was determined at that time that he would be registered under
the Act as of November 1, 2006. The reporting period of the Appellant is
the calendar year and the Appellant filed his returns under the Act for
2006 and 2007. For the 2006 year (which commenced on November 1, 2006 and ended
on December 31, 2006) the net tax of the Appellant was $2,527.26. The net tax
of the Appellant for 2007 was $7,174.50.
[3]
Section 237 of the Act
provides as follows:
237. (1) Where the reporting period of a registrant is
a fiscal year or a period determined under subsection 248(3), the registrant
shall, within one month after the end of each fiscal quarter of the registrant
ending in the reporting period, pay to the Receiver General an instalment equal
to
(a) except where paragraph (b) applies, ¼ of the registrant's
instalment base for that reporting period; or
(b) the amount determined under subsection (5).
(2) A registrant's instalment base for a particular reporting period
of the registrant is the lesser of
(a) an amount equal to
…
(ii) … the net tax for the particular reporting period, and
(b) the amount determined by the formula
C × 365/D
where
C is the total of all amounts each of which is the net tax
for a reporting period of the registrant ending in the twelve month period
immediately preceding the particular reporting period, and
D is the number of days in the period commencing on the
first day of the first of those preceding reporting periods and ending on the
last day of the last of those preceding reporting periods.
[4]
The requirement to pay
instalments is based on the determination of whether a person is a registrant. “Registrant”
is defined in section 123 as follows:
“registrant” means a person who is registered, or who is required to
be registered, under Subdivision d of Division V;
[5]
A person will become a
registrant when that person is required to be registered under the Act
(if they have not already registered). The Appellant acknowledged that he was
registered under the Act as of November 1, 2006. His registration was
backdated approximately one year as it was in the fall of 2007 that it was
determined that he was an independent contractor. It would seem that this was
presumably based on the date that he would have ceased to have been a small
supplier and would have been required to register under the Act and the
Appellant confirmed this in his closing argument. As a result the Appellant would
have been a registrant in 2006 even if he would not have been registered as of
November 1, 2006 and was required to make instalments in 2007.
[6]
Although the Appellant
only files his returns on an annual basis, he is still required to pay
quarterly instalments under the Act. His instalment base for 2007 will
be the lesser of two amounts – his net tax for 2007 ($7,174.50) and his net tax
for 2006 adjusted for the number of days in his reporting period in 2006. Since
his net tax for 2006 was $2,527.26 and there were 61 days in his reporting
period in 2006, this second amount determined for 2006 would be $15,122.13 and
his instalment base for 2007 would be $7,174.50.
[7]
Failing to pay any
instalments in 2007 results in the application of subsection 280(2) of the
Act which provides as follows:
(2) Despite subsection (1), if a person fails to pay all of an
instalment payable by the person under subsection 237(1) within the time
specified in that subsection, the person shall pay, on the amount of the
instalment not paid, interest at the prescribed rate, computed for the period
beginning on the first day following that time and ending on the earlier of
(a) the day the total of the amount and interest is paid, and
(b) the day on or before which the tax on account of which the
instalment was payable is required to be remitted.
[8]
Therefore since the
Appellant did not pay any instalments in 2007, the Appellant is liable for
interest in relation to these unpaid instalments.
[9]
The Appellant had submitted
that the costs of complying with the Act were excessive and imposed a
significant financial burden on his business. He was seeking to recover these
costs from the Respondent. However, the powers of this Court in relation to an
appeal of an assessment under the Act are limited by section 309, which
provides as follows:
309. (1) The Tax Court may dispose of an appeal from an assessment
by
(a) dismissing it; or
(b) allowing it and
(i) vacating the assessment, or
(ii) referring the assessment back to the Minister for
reconsideration and reassessment.
[10] Therefore the remedies available to this
Court are limited to those listed in subsection 309(1) of the Act and this
Court does not have any jurisdiction to award the Appellant any amount as
compensation for his cost of compliance with the Act.
[11] As a result, the appeal is dismissed,
without costs.
Signed at Toronto,
Ontario, this 29th day of January 2009.
“Wyman W. Webb”
CITATION: 2009TCC62
COURT FILE NO.: 2008-1207(GST)I
STYLE OF CAUSE: GERALD WEBSTER AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Fredericton,
New Brunswick
DATE OF HEARING: January 12, 2009
REASONS FOR JUDGMENT BY: The
Honourable Justice Wyman W. Webb
DATE OF JUDGMENT: January 29, 2009
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
Counsel for the
Respondent:
|
Toks C. Omisade
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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