|
Citation: 2004TCC331
|
|
Date: 20040505
|
|
Docket: 2003-3587(GST)I
|
|
BETWEEN:
|
|
JOHN TEUNIS VANDEBEEK,
|
|
Appellant,
|
|
and
|
|
|
|
HER MAJESTY THE QUEEN,
|
|
Respondent.
|
REASONS FOR ORDER
Little J.
A. FACTS:
[1] The Appellant resides with his
wife and four children in Westbank, British Columbia.
[2] In 1997 and 1998 the Appellant was
carrying on a construction business in the Kelowna area. The
Appellant testified that he paid Goods and Services Tax
("GST") on material and supplies that he used in his
business.
[3] In June 1998 the Appellant
completed and filed a Goods and Services Tax Return
("Return") for the reporting period April 2, 1997 to
December 31, 1997 (the "Period").
[4] In the Return the Appellant
claimed a refund in the amount of $95.01. However the Appellant
testified during the hearing that he now realizes that he made a
mistake when he prepared the Return. The Appellant said that he
should have claimed a refund in the amount of $8,499.35, equal to
the input tax credits that he was entitled to rather than a
refund in the amount of $95.01.
[5] Officials of the Canada Customs
and Revenue Agency ("CCRA") carried out an audit on the
Appellant for the Period. Officials of the CCRA issued an
arbitrary assessment against the Appellant for the Period.
[6] During the time that the audit was
conducted by officials of the CCRA the Appellant and his spouse
were experiencing marital problems. During this time the
Appellant was living and working in the Province of Alberta and
the Appellant's spouse and their four young children were
living in Westbank, British Columbia. The Appellant said that he
attempted to visit his family in Westbank during the weekend
every four or five weeks. The Appellant said that he would drive
from Alberta to Westbank on Friday afternoon and return to his
job location in Alberta on Sunday.
[7] The Appellant testified that he
spent Christmas with his family in December 1999. During that
time the Appellant became aware of a potential GST liability
related to the Period. The Appellant testified that he telephoned
an official of the CCRA on December 21, 1999 regarding his tax
liability and he was advised that he should file a Notice of
Objection.
[8] On December 21, 1999 the CCRA
official sent the Appellant a blank copy of a Notice of Objection
Form by fax.
[9] The Appellant testified that he
completed the Notice of Objection Form. The Appellant said that
he personally delivered the Notice of Objection Form to the
Kelowna office of the CCRA on December 23, 1999.
[10] The Appellant also testified that in
early January 2000 he received a letter dated January 6,
2000 from Mr. Nelson of the CCRA. The letter from Mr. Nelson
contained the following statement:
We have cancelled the "Requirement to Pay" dated
December 8, 1999, which we sent to you under the "Excise Tax
Act".
You do not have to make any more deductions as of this
date. . . .
(Note: Counsel for the Respondent said that he was not aware
of this letter.)
[11] During the hearing the Appellant said
that he believed that this letter from Mr. Nelson was
advising him that the GST issue was resolved in his favour.
[12] The Appellant said that in the year
2000 he was still commuting on a weekend every four or five weeks
between Westbank and his job in Alberta. During the monthly
visits to Westbank the Appellant said that he would attempt to
deal with the mail that had accumulated over the month. However
the Appellant said that he is not sure that his wife gave him all
of the correspondence that had accumulated while he was away from
his home.
[13] The Appellant testified that in the
year 2000 he suffered a number of personal tragedies. The
Appellant said that during the year 2000 the following relatives
died:
- His
mother died;
- His
brother died;
- His
sister died;
- His
brother-in-law died;
- The
Appellant and his wife had a serious marriage breakdown;
- He
personally had a nervous breakdown and spent some time in the
hospital.
[14] The Appellant said that in the year
2000 he phoned an official of the CCRA to discuss his GST
situation for the Period. When the Appellant told the official
about the deaths in his family and the nervous breakdown that he
had suffered he was advised to phone back when he felt
better.
[15] In 2001, the Appellant moved to Surrey,
British Columbia to obtain employment. The Appellant said that he
had discussions with officials of the CCRA in Surrey regarding
the GST issue for the Period.
[16] The Appellant maintains that while he
was working in Surrey he had an oral agreement with
Mr. Cliff Blair, an official of the CCRA. The Appellant
said that Mr. Blair advised him that he could submit a GST
return for the Period by
April 12, 2002 provided that he requested an extension
from the Minister of National Revenue (the
"Minister").
[17] The Appellant said that when he
complied with the requests made by Mr. Blair he was advised
that Mr. Blair had been transferred and that his file was being
handled by another individual.
[18] On December 2, 2003 Marc Roy, an
official of the CCRA, filed a Notice of Motion with the Court for
an Order quashing the Appellant's appeal on the grounds that
the appeal does not conform with the statutory requirements of
the Excise Tax Act. In the alternative the Notice of
Motion requests an Order extending the time within which the
Reply to Notice of Appeal might be filed.
B. ISSUE:
[19] Should the Notice of Motion filed by
the Respondent be granted?
C. ANALYSIS:
[20] As noted above, the Notice of
Reassessment that was issued by the Minister for the Period was
an arbitrary assessment, i.e. officials of the CCRA did not
examine the records of the Appellant that support his claim for
input tax credits.
[21] The Appellant testified that according
to his accountant's calculations the maximum GST that would
be applicable if the input tax credits were allowed for the
Period would be approximately $1,000.00.
[22] Because of the unusual and tragic
circumstances suffered by the Appellant and the fact that the
CCRA issued an arbitrary assessment, it is imperative that
officials of the CCRA review the evidence that supports the
Appellant's claim for input tax credits.
[23] Based on the evidence that was before
me during the hearing of the Notice of Motion I have concluded
that the Notice of Objection filed by the Appellant in December
2000 should be accepted as filed.
[24] The Notice of Motion filed by the
Respondent should be dismissed.
[25] The Respondent will have 60 days from
the date of this Order to file a Reply to the Notice of
Appeal.
Signed at Vancouver, British Columbia, this 5th day of May
2004.
Little J.
Email this Content