SIDNEY
SMITH,
D.J.:—The
appellant
was
assessed
under
Section
3
of
the
Excess
Profits
Tax
Act
for
excess
profits
tax
in
respect
of
the
taxation
year
ending
31st
March,
1947,
notwithstanding
that
this
was
its
first
year
of
operation.
The
Minister
in
giving
his
decision,
from
which
the
appeal
is
brought,
held
that
the
appellant
was
not
entitled
to
the
exemption
set
out
in
the
proviso
to
said
Section
3,
in
that
the
appellant,
being
a
new
company,
(a)
continued
the
business
formerly
operated
by
Hallett
and
Carey
Limited
of
Winnipeg,
Manitoba;
and
(b)
that
the
same
person
or
persons
has
or
have
a
substantial
interest
in
both
corporations.
The
appellant
disputes
both
points.
Hallet
and
Carey
(B.C.)
Limited
was
incorporated
under
the
British
Columbia
Companies
Act
on
the
2nd
July,
1946,
and
its
first
fiscal
period
ended
on
31st
March,
1947.
The
company
was
Incorporated
for
the
purpose
of
purchasing
that
part
of
the
business
of
Hallet
and
Carey
Limited
of
Winnipeg,
which
was
being
carried
on
in
British
Columbia.
The
appellant
argues
that
since
it
did
not
purchase
the
whole
business
of
Hallet
and
Carey
Limited,
but
only
that
part
carried
on
in
British
Columbia,
it
cannot
be
said
that
‘‘the
new
business
is
.
.
.
a
continuation’’
of
a
previous
business.
I
am
unable
to
agree
with
this
view,
and
think
that
there
is
nothing
in
the
section
to
support
it.
I
am
unable
to
find
that
the
business
of
Hallet
and
Carey
(B.C.)
Limited
is
not
a
continuation
of
the
previous
business
in
British
Columbia
carried
on
by
Hallet
and
Carey
Limited,
through
a
branch
office
at
Vancouver.
It
seems
to
me
that
the
Act
contemplates
a
previous
definite
business
which
is
carried
on
by
a
new
company,
and
that
it
can
make
no
difference
for
the
purposes
of
the
Act
whether
that
previous
definite
business
was
formerly
part
of
a
greater
business
carried
on
in
more
than
one
Province.
The
emphasis
is
on
the
continuation
of
a
previous
business.
A
further
point
made
was
that
the
business
of
Hallet
and
Carey
Limited
carried
on
in
British
Columbia
related
to
the
buying,
selling
and
exporting
of
wheat,
barley,
oats
and
rye,
whereas
the
present
business
of
appellant
consists
of
dealing
in
other
lines
of
merchandise
in
addition
to
the
above.
Nevertheless,
the
company’s
main
business
is
what
it
took
over
from
Hallet
and
Carey
Limited,
and
I
do
not
think
the
additional
produce
it
now
handles
makes
it
any
the
less
a
continuation
of
the
previous
business.
It
is,
in
my
view,
substantially
the
same
business,
and
not
a
substantially
different
business.
Lastly,
appellant
says
that
the
same
person
or
persons
as
shareholders
of
Hallet
and
Carey
Limited
had
not
and
did
not
have
at
the
time
of
commencement
of
the
business
of
the
appellant,
a
substantial
interest
in
both
corporations.
I
did
not
understand
it
to
be
contested
that
Mr.
K.
A.
Powell
had
a
substantial
interest
in
the
Winnipeg
business.
The
argument
was
that
he
had
not
a
substantial
interest
in
appellant
company,
because
he
owned
only
49%
of
its
shares.
But
I
held
the
other
day
in
Manning
Timber
Products
Limited
v.
Minister
of
National
Revenue,
[1951]
C.T.C.
270,
that
this
percentage
of
shares
was
a
substantial
interest,
within
the
section.
The
appeal
must
be
dismissed
with
costs.
Appeal
dismissed.
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