Catalyst Theater Society of Alberta v. The Queen, docket 2000-2808-GST-I (Informal Procedure)

Date: 20010418

Docket: 2000-2808-GST-I

BETWEEN:

CATALYST THEATER SOCIETY OF ALBERTA,

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 in Edmonton, Alberta on March 22, 2001. The Appellant's counsel filed an affidavit by consent. The assumptions are not in dispute. Paragraphs 8 and 9 of the Reply to the Notice of Appeal summarize the matters in issue. They read:

8.              In so reassessing the Appellant, the Minister made the following assumptions of fact:

(a)            the facts admitted or stated above;

(b)            at all material times the Appellant was a registrant for the purposes of the Act;

(c)            since April 1, 1997, the Appellant has been required to file its return on an annual basis, with a year end of March 31^st;

(d)            for the relevant period the Appellant filed returns reporting tax collectible, input tax credits and net tax as follows:

Period End Date	Tax Collected	Input Tax Credits	Net Tax
98/03/31	2,347.31	6,493.00	-4,145.69
99/03/31	1,074.50	7,803.88	-6,729.38
Total	3,421.81	14,296.88	-10,875.07

(e)            at all material times the Appellant was a charity;

(f)             at all material times the only elections filed by the Appellant with the Minister were to file its returns on an annual basis with a year-end of March 31^st;

(g)            the Appellant did not file an election with the Minister to not use the Simplified Method when determining its net tax;

(h)            the Appellant received the following amounts as consideration for the taxable supplies it made during the relevant period:

reporting period	consideration
98/03/31	33,533.00
99/03/31	15,350.00
	48,883.00

(i)             the Appellant did not make any supplies of capital property or real property by way sale during the relevant period;

(j)             during the relevant period the Appellant did not make any supplies to which sections 172(2), 173(1), 231, 232, 233, 234, 235 and 236 of the Act apply;

(k)            during the relevant period the Appellant did not make an election under subsection 177(1) of the Act;

(l)             the Appellant was not required to include an amount under subsection 238.1(4) of the Act when calculating its net tax for the reporting periods ending during the relevant period;

(m)           the Appellant did not acquire any real property by way of purchase during the relevant period;

(n)            during the relevant period the Appellant did not acquire any supplies to which section 231 to section 236 to the Act, inclusive, apply;

(o)            during the relevant period the Appellant did not acquire, import or bring any personal property into Nova Scotia, New Brunswick or Newfoundland;

(p)            between April 1, 1997 and March 31, 1998, tax in the amount of $6,493.00 was paid or payable by the Appellant with respect to the supplies it acquired during the year;

(q)            between April 1, 1998 and March 31, 1999, tax in the amount of $7,803.88 was paid or payable by the Appellant with respect to the supplies it acquired during the year; and

(r)             the Appellant was entitled to no more than the following amounts as charitable rebates:

reporting period	rebate
98/03/31	3,246.50
99/03/31	3,901.94
	7,148.44

B.             ISSUE TO BE DECIDED

9.              The issue to be decided in this appeal is whether the Appellant is required to use the Simplified Method when calculating its net tax for the reporting periods ending during the relevant period.

[2]            The "simplified method" which the Respondent alleges to be applicable to the Appellant arises from amendments which created section 225.1 of the Excise Tax Act in 1997 by c. 10, s. 45 for periods beginning after 1996. Thus the legislation was retroactive. In particular, the first three lines of subsection (2) and subsections (6) and (7) read:

(2)            Net tax -

Subject to subsection (7), the net tax for a particular reporting period of a charity that is a registrant is equal to the positive or negative amount determined by the formula ...

(6)            Election -

Where a charity that makes supplies outside Canada, or zero-rated supplies, in the ordinary course of a business or all or substantially all of whose supplies are taxable supplies elects not to determine its net tax in accordance with subsection (2), that subsection does not apply in respect of any reporting period of the charity during which the election is in effect.

(7)            Form and content of election -

An election under subsection (6) by a charity shall

(a)            be filed in prescribed manner with the Minister in prescribed form containing prescribed information;

(b)            set out the day the election is to become effective, which day shall be the first day of a reporting period of the charity;

(c)            remain in effect until a revocation of the election becomes effective; and

(d)            be filed

(i)             where the first reporting period of the charity in which the election is in effect is a fiscal year of the charity, on or before the first day of the second fiscal quarter of that year or such later day as the Minister may determine on application of the charity, and

(ii)            in any other case, on or before the day on or before which the return of the charity is required to be filed under this Division for the first reporting period of the charity in which the election is in effect or on such later day as the Minister may determine on application of the charity.

[3]            Subsection (2)'s method set out for calculation is subject to subsection (7) by express wording. Subsection (7) does not authorize the election to continue with the old method of determination. Rather, that authorization is in subsection (6).

[4]            Subsection (7) describes the particulars relating to the election mechanics, and prescribes the

1.              manner of filing

2.              the form, and

3.              the information.

[5]            "Prescribed" is defined in subsection 123(1) of the Excise Tax Act as follows:

"prescribed" means

(a)            in the case of a form or the manner of filing a form, authorized by the Minister,

(b)            in the case of the information to be given on a form, specified by the Minister,

(c)            in the case of the manner of making or filing an election, authorized by the Minister, and

(d)            in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation;

[6]            In this case subsection 225.1(7) is to be complied with as authorized or specified by the Minister. However, the Appellant did not file an election with the Minister, according to assumption 8(g).

[7]            In these circumstances, as sympathetic as the Court might be with a charitable or similar organization whose work such as GST filings is usually done by volunteers without any reward, the Court is compelled to deny the appeal.

[8]            Therefore the appeal is dismissed.

                Signed at Regina, Saskatchewan, this 18^th day of April, 2001.

"D. W. Beaubier"

J.T.C.C.