Date: 20000804
Docket: 1999-1188-GST-I
BETWEEN:
MARIO DIONNE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
Tardif, J.T.C.C.
[1]
This is an appeal from a notice of assessment dated
January 26, 1998, concerning the goods and services tax
("GST").
[2]
The issue is whether the appellant's GST rebate application
was filed within the prescribed time.
[3]
Marjolaine Parent, the appellant's spouse, acted as his agent
at the hearing. The Court noted that Ms. Parent had been
charged by her spouse with the handling of his case and, indeed,
Ms. Parent was very well informed about the appellant's
case.
[4]
She explained that she had learned from the manager of a credit
union that owners of private homes were entitled to a GST rebate.
After receiving that information, she hastened to obtain the form
required to make a claim. They were in great need of the money
because of their limited ability to pay.
[5]
Since their income was modest, they had taken out a $35,000
mortgage to build their new home themselves. After obtaining that
loan, they had had to make mortgage payments and also pay for the
rental accommodations in which they were living. To make ends
meet, they sublet those accommodations and moved into their new
home even though it was not completed.
[6]
Upon obtaining the appropriate rebate claim form,
Ms. Parent, who did not understand the implications of
certain questions, took steps to get some information and
explanations. The person she consulted, a Mr. Preston, told
her that it would be better to wait until their family home
construction project was fully completed to make the claim, since
they would be entitled to a higher rebate. He added that only one
rebate could be given for each home built.
[7]
At that time, no mention at all was made of the strict time limit
for filing such a claim. Nor did the then available form that was
used refer to any time limit.
[8]
Over the following months, the appellant and his spouse were able
to continue the work thanks to a second loan of $5,000 obtained
from the appellant's father. After exhausting their available
funds, and given that their family responsibilities had increased
with the arrival of another child, the appellant decided to apply
for the GST rebate to obtain fresh money so that they could carry
on with the project.
[9]
The rebate application was denied on the ground that it had been
filed after the expiration of the two-year time limit for
doing so.
[10] The
evidence showed that, at the time of his claim, the appellant had
spent about $40,000 on the construction of their home. The
evidence also showed that another $10,000 to $15,000 was needed
to complete the family's project. Based on an essentially
mathematical approach, the family home construction project was
therefore about 75 percent completed.
Position of the parties
[11] The
respondent assumed the following facts:
[TRANSLATION]
(a)
the facts admitted above;
(b)
in 1993, the appellant built a principal residence at
246 Notre-Dame Est in the municipality of
Cap-Chat;
(c)
that residence is said to be worth $57,400;
(d)
in May 1993, the appellant began living in the house;
(e)
from May 1993 to December 1994, the appellant finished a room in
the basement and a laundry room and had eavestroughs
installed;
(f)
in December 1994, construction was substantially completed;
(g)
the day the residential complex was first occupied as a place of
residence and the day construction was substantially completed
were prior to April 23, 1996;
(h)
on or about October 21, 1997, the appellant, as a
do-it-yourself homebuilder, filed a GST rebate
application for the amount of $996.84;
(i)
the rebate application was denied by the respondent on the ground
that it had not been filed with the prescribed time.
[12] The
appellant argued that his appeal should be allowed for the
following reasons:
· one
of the respondent's employees gave him incorrect or
incomplete information;
· the
rebate claim form did not refer to the strict two-year time
limit;
· the
fact that the form has been corrected and now states that a claim
must be submitted within two years demonstrates fault or at least
negligence by the Department of National Revenue ("the
Department");
·
finally, the appellant had no knowledge of the two-year
time limit.
Analysis
[13] Ignorance
of the Excise Tax Act ("the Act") cannot
be relied on to support the appellant's case. As for the
incorrect or incomplete information obtained from the
respondent's employee and the existence of incomplete forms,
once again, that does not exempt the appellant from the duty to
comply with a time limit established by the Act.
[14] However,
the evidence did show that the starting point determined by the
respondent for computing the strict two-year time limit was
not as obvious or decisive as suggested. In fact, the evidence
showed that the work was not completed or entirely finished even
when the claim was filed.
[15] On this
point, the appellant's spouse clearly stated that the rebate
application meant that she and her spouse were aware that they
would lose the tax rebate on the other amounts they would pay in
the future to complete the work. However, they preferred to apply
at that time so that they could continue some of the work.
[16] To
qualify for or be entitled to a rebate, the first requirement
laid down by Parliament is meeting a two-year time limit,
which must be computed from the earlier of the following
days:
(a)
when the residential complex was occupied as a place of residence
at any time after construction began;
(b)
when construction of the residential complex was substantially
completed.
[17] According
to the evidence, the residential complex for which the rebate was
claimed was not fully completed when the appellant and his spouse
first began occupying it in May 1993; what is more, the home
was still not completed when the claim was filed on
October 21, 1997.
[18] However,
the Act is very clear about when the two-year time
limit starts to run. It is the earlier of the following two
possibilities:
(1)
when the residential complex was occupied as a place of residence
at any time after construction began;
(2)
when construction of the residential complex was substantially
completed.
[19] In the
case at bar, therefore, the two-year time limit must
unfortunately be computed as of the date the residential complex
was first occupied, that is, May 1, 1993, and as a
consequence the rebate application was inadmissible. Since the
time limit was a strict one, the failure to comply with it is
unfortunately fatal even though the facts and circumstances
related to the claim are very unusual and inspire a great deal of
sympathy.
[20] The
appeal must therefore be dismissed on the ground that the claim
was filed late.
Signed at Ottawa, this 4th day of August 2000.
"Alain Tardif"
J.T.C.C.
Translation certified true on this 12th day of October
2001.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-1188(GST)I
BETWEEN:
MARIO DIONNE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on July 4, 2000, at Rimouski,
Quebec, by
the Honourable Judge Alain Tardif
Appearances
Agent for the
Appellant:
Marjolaine Parent
Counsel for the
Respondent:
Louis Cliche
JUDGMENT
The
appeal from the assessment made under the Excise Tax Act,
notice of which is dated January 26, 1998, and bears number
973040001229G8, is dismissed in accordance with the attached
Reasons for Judgment.
Signed at Ottawa, Canada, this 4th day of August 2000.
J.T.C.C.
Translation certified true
on this 12th day of October 2001.
Erich Klein, Revisor
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