Safeloop.Com Inc. v. The Queen, 2004 TCC 203 (Informal Procedure)

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Appeal heard on February 23, 2004 at Montreal, Quebec

and judgment rendered orally on February 24, 2004

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JUDGMENT

          The appeal from the assessment of goods and services tax made pursuant to the Excise Tax Act (the "Act"), notice of which is dated June 20, 2003 and bears number 04BP-118940139 is allowed, without costs, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis of what has been conceded in paragraph 10 of the Reply to the Notice of Appeal, that the Appellant should be allowed an additional $11.79 input tax credit.

          The Appellant is entitled to no further relief.

Signed at Ottawa, Canada, this 5th day of March, 2004.

Lamarre Proulx, J.

REASONS FOR JUDGMENT

Lamarre Proulx, J.

[1]      This is an appeal, by way of the informal procedure, of a reassessment made by the Minister of National Revenue (the "Minister"), pursuant to the Excise Tax Act (the "Act"). The Notice of Reassessment bears the number 04BP-118940139 and is dated June 20, 2003. The period reassessed is March 31, 2000 to March 30, 2002.

[2]      The question at issue concerns the information that may be required by the Minister for the purpose of the Input Tax Credit ("ITC") pursuant to section 169 of the Act.

[3]      Mr. A.M. Butler, corporate secretary to the Appellant, acted for the Appellant in this matter. He explained that the Appellant was in the business of computer programming. He produced as Exhibit A-1 the invoices of a contractor for professional services. Goods and Services Tax ("GST") was charged in the total amount of $1,350. However, no registration number was shown on the invoices. No evidence was adduced that there was a valid registration number at the time of these invoices.

[4]      Mr. Abbey Katiriga Sirivar, an appeals agent, testified for the Respondent. He produced as Exhibit R-1, a working document showing a compilation of the claims made by the Appellant for the calculation of the ITC. The reasons a portion of the amounts of ITC was disallowed were that some claims did not have supporting documents, some were expenses not incurred by the Appellant and, in one other case, that the supplier of service did not have a registration number.

Argument and Conclusion

[5]      Counsel for the Respondent referred to various court decisions: San Clara Holdings v. Canada, [1994] T.C.J. No. 1208, Metro Exteriors Ltd. v. Canada, [1995] T.C.J. No. 1302 and Rapid Transit Courrier Ltd. v. Canada, [2000] T.C.J. No. 465. These cases are all to the effect that in order for the acquirer of a service to be able to claim an ITC regarding the service acquired, the supplier of the service must be registered.

[6]      The Appellant's representative appeared to be arguing at one point that the Input Tax Credit Information Regulations was ultra vires, or not within the regulation making power enacted in the Act. At some other point, he seemed to be arguing that the amount of net tax reassessed was not accurate.

[7]      Regarding the Appellant's arguments concerning the validity of the Regulations, I am satisfied that the Regulations in question were well within Governor in Council's regulation making power provided for in section 277 of the Act. As to the amount of net tax assessed, no contrary evidence was adduced by the Appellant.

[8]      The only piece of evidence that the Appellant produced was Exhibit A-1, the invoices for programming services. They did not show a registration number. The case law has made it abundantly clear and the provisions of the Act and of the Regulations are not ambiguous: supporting documentation must be obtained and the information must contain, among other things, the registration number of the supplier. Also relevant is section 286 of the Act which stipulates the obligation of keeping appropriate records.

[9]      The appeal is allowed for what has been conceded in paragraph 10 of the Reply to the Notice of Appeal, otherwise the reassessment under appeal must stand.

Signed at Ottawa, Canada, this 5th day of March, 2004.

Lamarre Proulx, J.