Whitehouse v. The Queen, docket 98-2437-GST-I (Informal Procedure)

Date: 20000531

Docket: 98-2437-GST-I

BETWEEN:

FREDERICK & SHIRLEY WHITEHOUSE,

Appellants,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Hamlyn, J.T.C.C.

[1] This is an appeal with respect to the Goods and Services Tax (“GST”) Assessment No. 980370280129P 0001, dated February 20, 1998, filed on September 17, 1998.

[2] The Appellants filed a GST/HST New Housing Rebate application for the amount of $3,062.70 dated December 27, 1997 which was received by the Minister of National Revenue (the “Minister”) on January 7, 1998.

[3] By GST assessment numbered 980370280129P 0001 dated February 20, 1998, the Minister notified the Appellant that his application had been disallowed.

The Facts

[4] The Appellants owned a piece of land and hired a builder to construct a residential complex, that was a single unit residential complex for use as their primary place of residence, in Brighton, Ontario.

[5] The construction of the complex was substantially completed in or about September 27, 1995 at which time the Appellants first occupied the complex.

[6] The Appellants were the first individuals to occupy the complex after the construction had begun.

[7] The Appellants filed an application for a New Housing Rebate dated December 27, 1997 and the Minister received the said application on January 7, 1998.

[8] The Appellants from their Notice of Appeal adopted by them as part of their case state they now realize that their application should have been submitted by September 1997. However, they were not aware the rebate existed until December 1997. When they realized they missed the application deadline, they contacted Revenue Canada and they were assured that they would qualify if they submitted their application with a note explaining the reasons why they were late. Moreover, the Appellants found the Revenue Canada brochure in relation to the New Housing Rebate confusing.

Issue

[9] The issue to be decided is whether the Appellants are entitled to a rebate pursuant to section 256 of the Excise Tax Act (the “Act”) with respect to the complex.

The Legislative Scheme

[10] The Minister rejected the Appellants’ application for the New Housing Rebate on the basis of subsection 256(3). It reads as follows:

256(3) Application for rebate - A rebate under this section in respect of a residential complex shall not be paid to an individual unless the individual files an application for the rebate within two years after the earliest of

(a) the day that is two years after the day the complex is first occupied as described in subparagraph (2)(d)(i);

(a.1) the day ownership is transferred as described in subparagraph (2)(d)(ii); and

(b) the day construction or substantial renovation of the complex is substantially completed.

[11] This section was:

amended by 1997, c. 10, subsec.66(1), applicable to any rebate in respect of a residential complex for which an application is filed with the Minister of National Revenue on or after April 23, 1996 except where

(a) the residential complex was, at any time after the construction or substantial renovation thereof began and before that day, occupied as a place of residence or lodging;

(b) the construction or substantial renovation of the residential complex was substantially completed before that day; or

(c) the applicant, before that day, transferred ownership of the residential complex to a recipient of a supply by way of sale of the complex.

[12] If one of these three exceptions is met then the former provision will apply. It reads as follows:

256(3) Application for rebate - A rebate shall not be paid under subsection (2) in respect of a residential complex to an individual unless the individual files an application for the rebate within two years after the earlier of

(a) the day the complex is first occupied as described in subparagraph (2)(d)(i) or ownership is transferred as described in subparagraph 2(d)(ii), and

(b) the day construction or substantial renovation of the complex is substantially completed.

Analysis

[13] From the legislation the application deadline for the new Housing Rebate for the residential complex is two years from the substantial completion of the construction of the residential complex.

[14] The Appellants’ residential complex was substantially complete by September 27, 1995. The Appellants moved in immediately thereafter.

[15] The two-year application deadline limit expired on September 27, 1997. The Appellants did not apply for the New Housing Rebate until after September 27, 1997 (application was dated December 27, 1997). As a consequence the Appellants are not entitled to a New Housing Rebate with respect of their residential complex.

[16] The Tax Court of Canada does not have the discretion to grant an extension to the New Housing Rebate deadline on the basis of equity or compassion nor is there any relief if the Appellants were confused or misled as alleged, as the New Housing Rebate deadline is a limitation date fixed by Statute.

Decision

[17] The appeal is dismissed.

Signed at Ottawa, Canada, this 31^st day of May 2000.

"D. Hamlyn"

J.T.C.C.