Date: 20010620
Docket: 2000-3303-GST-I
BETWEEN:
KATHY ASPROS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hamlyn, J.T.C.C.
FACTS
[1]
This appeal arises from a Notice of Decision dated May 24, 2000,
in which the Minister of National Revenue (the
"Minister") denied the Appellant a refund of $1,809.22
of GST paid on defective goods purchased that were subsequently
returned to the supplier from a court ordered settlement.
[2]
The Appellant purchased a car on November 25, 1995, which turned
out to be defective. Three years after the purchase, the
Appellant received a court ordered settlement whereby she
recovered $25,000.00 from the dealer who sold her the defective
car. The Appellant applied for a rebate of the GST paid on the
defective car, which the Minister denied by letter dated May 24,
2000. The Appellant is appealing the Minister's decision.
[3]
The Appellant in pleadings states that if something is returned,
then the taxes paid on such an item should be refunded. The
Appellant states that she should not have to pay taxes on an item
that she no longer possesses. The Minister in pleadings states
that the Appellant was a recipient of a taxable supply, was
required to pay GST as the recipient of a taxable supply, the
supplier was obligated to collect the GST payable by the
Appellant, and that the GST was not "paid in error" by
the Appellant. Thus she is not entitled to a rebate.
[4]
The Minister also stated at trial that any claim for a rebate on
the application must be filed within two years after the day the
purchase was paid for or GST was remitted. If the rebate
application was for amounts paid or remitted before July 1,
1998, the applicant has four years to file after the date of
payment or remission.
ISSUE
[5]
Whether the Appellant is entitled to a refund for GST paid on
defective goods purchased which were returned.
STATUTORY FRAMEWORK
[6]
The relevant provisions of the Act are:
165. (1) Subject to this Part, every recipient of a taxable
supply made in Canada shall pay to Her Majesty in right of Canada
a tax in respect of the supply calculated at the rate of 7% of
the value of the consideration for the supply.
221. (1) Every person who makes a taxable supply shall,
as agent of Her Majesty in right of Canada, collect the tax
under Division II payable by the recipient in respect of the
supply.
225. (1) Subject to this Subdivision, the net tax for a
particular reporting period of a person is the positive or
negative amount determined by the formula
A - B
where
A is the total of
(a) all amounts that became collectible and all other
amounts collected by the person in the particular reporting
period as or on account of tax under Division II, and
228. (2) Where the net tax for a reporting period of a
person is a positive amount, the person shall, except
where subsection (2.1) or (2.3) applies in respect of the
reporting period, remit that amount to the Receiver
General,
232. (1) Where a particular person has charged to, or
collected from, another person an amount as or on account
of tax under Division II in excess of the tax under that
Division that was collectible by the particular person from
the other person, the particular person may,
within two years after the day the amount was so charged or
collected,
...
(b) where the excess amount was collected, refund or credit
the excess amount to that other person.
(3) Where a particular person adjusts, refunds or credits an
amount in favour of, or to, another person in accordance with
subsection (1) or (2), the following rules apply:
...
(b) the amount may be deducted in determining the
net tax of the particular person for the reporting period
of the particular person in which the credit note is issued to
the other person or the debit note is received by the particular
person, to the extent that the amount has been included in
determining the net tax for the reporting period or a preceding
reporting period of the particular person; and
...
261. (1) Where a person has paid an amount
(a) as or on account of, or
(b) that was taken into account as,
tax, net tax, penalty, interest or other obligation under this
Part in circumstances where the amount was not payable or
remittable by the person, whether the amount was paid by
mistake or otherwise, the Minister shall, subject to
subsections (2) and (3), pay a rebate of that amount to the
person.
(2) A rebate in respect of an amount shall not be paid
under subsection (1) to a person to the extent that
(a) the amount was taken into account as tax or net tax for a
reporting period of the person and the Minister has assessed the
person for the period under section 296;
(b) the amount paid was tax, net tax, penalty, interest or any
other amount assessed under section 296; or
(c) a rebate of the amount is payable under subsection
215.1(1) or (2) or 216(6) or a refund of the amount is payable
under section 69, 73, 74 or 76 of the Customs Act because
of subsection 215.1(3) or 216(7).
(3) A rebate in respect of an amount shall not be
paid under subsection (1) to a person unless the
person files an application for the rebate within two
years after the day the amount was paid or remitted by the
person. [emphasis added]
ANALYSIS
[7]
In this appeal, the Appellant received a court ordered settlement
(December 4, 1998) for the defective vehicle whereby she
recovered $25,000.00 from the supplier. The appellant no longer
possesses the vehicle. The Appellant is seeking a refund for the
GST paid on the returned vehicle and filed an application for the
rebate on December 30, 1998.
[8]
The scheme of the Excise Tax Act (the
"Act") is such that a taxpayer who has overpaid
GST could either receive a refund for such overpayment directly
from the supplier of the taxable supply under section 232,
or alternatively apply for a refund from the Minister under
section 261 for tax paid in error.
[9]
The Appellant states she was advised by the civil court judge in
Ontario to apply directly for the GST rebate.
[10] The focus
at trial was on the limitation period issue. Pursuant to
subsection 261(3), a person claiming a section 261 rebate
must file an application within two years after the amount was
paid or remitted. Bill C-70 [1997, c.10, ss. 71(1)] reduced
the time limit for claiming the rebate to two years from four
years. This amendment relates to amounts paid or remitted after
June 1996, and to amounts paid or remitted on or before June 30,
1996, unless the amounts are claimed in an application filed on
or before July 1998.
[11] The
vehicle in question was purchased by the Appellant before June
30, 1996 and the Appellant filed an application for the section
261 rebate after July 1998, which was after the court ordered
settlement. Therefore the two year time limit applies. The
Appellant has filed for a section 261 rebate past the statutory
deadline.
[12] The
result would appear to be a windfall for the taxing authorities.
Although such a gap in the legislative scheme may lead to an
unfair result, it is well established that this Court does not
have jurisdiction to remedy any such perceived unfairness. On
this point, in Impact Shipping Inc. v. The Queen,[1] Chief Judge Christie,
as he then was, stated:
[The argument of the appellant] presupposes that the Tax Court
is vested with some kind of general equitable jurisdiction to
remedy what it might consider an inequitable result regardless of
the fact that the legislation creating the alleged inequity is
perfectly clear.
Jurisdiction of the nature just described is not vested in
this Court either expressly or by necessary implication.
DECISION
[13] The
appeal is dismissed.
Signed at Ottawa, Canada, this 20th day of June 2001.
"D. Hamlyn"
J.T.C.C.
COURT FILE
NO.:
2000-3303(GST)I
STYLE OF
CAUSE:
Kathy Aspros and Her
Majesty the Queen
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
June 15, 2001
REASONS FOR JUDGMENT BY: The
Honourable Judge D. Hamlyn
DATE OF
JUDGMENT:
June 20, 2001
APPEARANCES:
For the
Appellant:
The Appellant herself
Counsel for the
Respondent:
Steve Leckie
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-3303(GST)I
BETWEEN:
KATHY ASPROS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on June 15, 2001, at Toronto,
Ontario, by
the Honourable Judge D. Hamlyn
Appearances
For the
Appellant:
The Appellant herself
Counsel for the Respondent: Steve
Leckie
JUDGMENT
The
appeal from the assessment made under Part IX of the Excise
Tax Act, notice of which is dated June 14, 1999 and bears
number 9915913801237, is dismissed in accordance with the
attached Reasons for Judgment.
Signed at Ottawa, Canada, this 20th day of June 2001.
J.T.C.C.
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