MATHEW & CO., LIMITED
Decisions
v.
THE MINISTER OF NATIONAL REVENUE
Appeal No. AP-92-089
TABLE OF CONTENTS
Ottawa, Thursday, November 6, 1997
Appeal No. AP-92-089
IN THE MATTER OF an appeal heard on September 8, 1997, under section 81.19 of the Excise Tax Act, R.S.C. 1985, c. E-15;
AND IN THE MATTER OF a decision of the Minister of National Revenue dated May 22, 1992, with respect to a notice of objection served under section 81.17 of the Excise Tax Act.
BETWEEN
MATHEW & CO., LIMITED Appellant
AND
THE MINISTER OF NATIONAL REVENUE Respondent
The appeal is dismissed.
Arthur B. Trudeau ______ Arthur B. Trudeau Member
Charles A. Gracey ______ Charles A. Gracey Member
Michel P. Granger ______ Michel P. Granger Secretary
The issue in this appeal is whether the appellant's application for a federal sales tax inventory rebate was filed with the respondent before 1992 as prescribed by subsection 120(8) of the Excise Tax Act and, if not, whether the appellant is entitled to the rebate notwithstanding that the application was filed outside the prescribed period. The appeal proceeded by way of telephone conference.
HELD: The appeal is dismissed. Even if the Tribunal felt that the appellant deserved to have a rebate as claimed, there is no authority upon which the Tribunal could grant an equitable remedy where the appellant has not complied with the statutory provisions.
Conference Hearing: Ottawa, Ontario, and Edmonton, Alberta Date of Hearing: September 8, 1997 Date of Decision: November 6, 1997
Tribunal Members: Robert C. Coates, Q.C., Presiding Member Arthur B. Trudeau, Member Charles A. Gracey, Member
Counsel for the Tribunal: Gerry Stobo
Clerk of the Tribunal: Anne Jamieson
Appearances: Don Cherniawsky, for the appellant Janet Ozembloski, for the respondent
This is an appeal under section 81.19 of the Excise Tax Act [1] (the Act) of a determination of the Minister of National Revenue that rejected an application for a federal sales tax (FST) inventory rebate made under section 120 [2] of the Act. The issue in this appeal is whether the appellant's application was filed with the respondent before 1992 as prescribed by subsection 120(8) of the Act and, if not, whether the appellant is entitled to the rebate notwithstanding that the application was filed outside the prescribed period. The appeal proceeded by way of telephone conference.
For purposes of this appeal, the relevant provisions of section 120 of the Act are as follows:
(3) Subject to this section, where a person who, as of January 1, 1991, … has any tax-paid goods in inventory at the beginning of that day,
(a) where the tax-paid goods are goods other than used goods, the Minister shall, on application made by the person, pay to that person a rebate in accordance with subsections (5) and (8);
(8) No rebate shall be paid under this section unless the application therefor is filed with the Minister before 1992.
Counsel for the appellant acknowledged that the application for an FST inventory rebate was filed on January 24, 1992. This date was therefore, he accepted, beyond the December 31, 1991, deadline for filing such applications. Despite the time limitation imposed by subsection 120(8) of the Act, counsel argued that the Tribunal should provide a remedy to the appellant through “the unjust enrichment mechanism. [3] ” Counsel argued that the respondent has been unjustly enriched because the appellant paid FST which was not in fact owing. Consequently, counsel argued, the appellant was entitled to recover this money through the common law remedy of replevin. In support of this, he cited a recent decision of the Federal Court - Trial Division [4] which dealt with an overpayment of tax to the government. In that case, the plaintiff claimed that it had paid tax which was not owing. The plaintiff did not file certain returns in order to claim this overpayment, as required by the Petroleum and Gas Revenue Tax Act. [5] Consequently, there was no authority to remit the overpayment. The Federal Court concluded that the Petroleum and Gas Revenue Tax Act was not a complete code because it did not have provisions to deal with compelling circumstances like those before it. As a result, the Federal Court could fill that gap by granting an equitable remedy based on unjust enrichment.
Despite the valiant efforts of counsel for the appellant, the Tribunal cannot accept his position. Simply put, there is no authority upon which the Tribunal can grant such a remedy. The Tribunal has no authority to go beyond the boundaries of its legislation in granting an equitable remedy to a party. Furthermore, in the Tribunal's view, the provisions of the Act do constitute a complete code for dealing with FST matters.
Counsel for the appellant then asked if the Tribunal would recommend that the respondent provide a remission order granting FST relief. The Tribunal feels that the respondent should look sympathetically upon requests from taxpayers like the appellant that have been affected by technical requirements which prevent them from accessing a benefit to which they otherwise could have been entitled. Whether or not the appellant's case is meritorious and warrants a special review by the respondent is a matter to be left to the parties.
Accordingly, the appeal is dismissed.
[ Table of Contents]
1. R.S.C. 1985, c. E-15.
2. S.C. 1990, c. 45, s. 12, as amended by S.C. 1993, c. 27, s. 6.
3. Transcript of Teleconference, September 8, 1997, at 8.
4. Forest Oil Corp. v. Canada (T.D.), [1997] 1 F.C. 624.
5. R.S.C. 1985, c. P-12, as rep. by R.S.C. 1985, c. 45 (2nd Supp.), s. 8.
Initial publication: November 6, 1997