CALDWELL & CHOONG SALON
Decisions
v.
THE MINISTER OF NATIONAL REVENUE
Appeal No. AP-92-234
TABLE OF CONTENTS
Ottawa, Tuesday, February 22, 1994
Appeal No. AP-92-234
IN THE MATTER OF an appeal heard on November 2, 1993, 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 September 25, 1992, with respect to a notice of objection served under section 81.17 of the Excise Tax Act.
BETWEEN
CALDWELL & CHOONG SALON Appellant
AND
THE MINISTER OF NATIONAL REVENUE Respondent
The appeal is dismissed.
Sidney A. Fraleigh ______ Sidney A. Fraleigh Presiding MemberAnthony T. Eyton ______ Anthony T. Eyton Member
Robert C. Coates, Q.C. ______ Robert C. Coates, Q.C. Member
Michel P. Granger ______ Michel P. Granger Secretary
The issue in this appeal is whether the appellant is entitled to a federal sales tax inventory rebate with respect to hair care products, such as shampoo and conditioner, held in inventory on January 1, 1991. Specifically, the Tribunal must determine whether the refund application was filed with the Minister of National Revenue before 1992, as prescribed by subsection 120(8) of the Excise Tax Act.
HELD: The appeal is dismissed. The Excise Tax Act is explicit in specifying that no rebate shall be paid unless the application therefor has been filed with the Minister of National Revenue before 1992. The appellant agreed that it filed its rebate application on February 6, 1992, and the Tribunal finds that the Minister of National Revenue correctly rejected the appellant's rebate application.
Place of Hearing: Calgary, Alberta Date of Hearing: November 2, 1993 Date of Decision: February 22, 1994Tribunal Members: Sidney A. Fraleigh, Presiding Member Anthony T. Eyton, Member Robert C. Coates, Q.C., Member
Counsel for the Tribunal: David M. Attwater
Clerk of the Tribunal: Anne Jamieson
Parties: Kevin Caldwell, for the appellant Michael Ciavaglia, 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 (the Minister) rejecting an application for a federal sales tax (FST) inventory rebate made under section 120 [2] of the Act. The appeal proceeded by way of written submissions under rule 25 of the Canadian International Trade Tribunal Rules, [3] on the basis of the Tribunal's record as supplemented by an agreed statement of facts and briefs submitted by the parties. The appellant's representative accepted the facts contained in the respondent's brief as the agreed statement of facts.
The appellant was, at all material times, the operator of two hair salons. The rebate application relates to hair care products such as shampoo, conditioner, etc. In the respondent's brief, it is indicated that the appellant filed its FST inventory rebate application on February 6, 1992, in the amount of $3,690.26 with respect to its tax-paid inventory held in inventory on January 1, 1991. On April 10, 1992, the Minister issued a notice of determination rejecting the application on the basis that it was filed beyond the time period specified by the Act. On June 19, 1992, the appellant objected to the determination, which was confirmed by a decision of the Minister dated September 25, 1992. Caldwell & Choong Salon then appealed the determination to the Tribunal.
The issue in this appeal is whether the appellant is entitled to an FST inventory rebate with respect to its goods held in inventory on January 1, 1991. Specifically, the Tribunal must determine whether the refund application was filed with the Minister before 1992, as prescribed by subsection 120(8) of the Act.
In the appellant's brief, it is submitted that it is unrealistic to believe that a small business can be aware of all the rules and regulations accompanying the Goods and Services Tax. The Minister's decision imposes a substantial penalty on the appellant due to the late filing of the rebate application. It is noted that the result of the Minister's decision is double taxation, which was not intended by the legislation.
Counsel for the respondent noted that the onus is on the appellant to establish that it is entitled to the rebate claimed and that the respondent's determination is incorrect. The time limit for filing an application for an FST inventory rebate is specifically determined by statute. Subsection 120(8) of the Act specifies that an application must be filed before 1992, and the appellant's application was not filed before this date. Counsel submitted that the Tribunal lacks the jurisdiction to grant equitable relief and, further, that it is bound to apply the law and cannot refuse to apply it, even on grounds of equity. In addition, counsel submitted that taxing statutes cannot be construed to avoid the effects of legislation, no matter how great the hardship may be.
The Tribunal recognizes that the Act is explicit in specifying that no rebate shall be paid unless the application therefor has been filed with the Minister before 1992. The appellant agreed that it filed its rebate application on February 6, 1992, and the Tribunal finds that the Minister correctly rejected the appellant's rebate application.
Accordingly, the appeal is dismissed.
[ Table of Contents]
1. R.S.C. 1985, c. E-15.
2. S.C. 1990, c. 45, s. 12.
3. SOR/91-499, August 14, 1991, Canada Gazette Part II, Vol. 125, No. 18 at 2912.
Initial publication: June 3, 1997