INCOME TAX |
Practice |
Merlis Investments Ltd. v. M.N.R.
T-1814-99
Pinard J.
27/10/00
11 pp.
Application for judicial review of MNR's delay in assessing applicant with respect to 1998 fiscal year--Seeking mandamus requiring respondent to assess applicant pursuant to Income Tax Act (ITA), s. 152, to apply appropriate international tax convention provisions and release sum of $5,350,603 held for applicant's account--Applicant incorporated in Barbados in 1997, with Kaufman Family Trust as sole shareholder--Trust beneficiaries Bruce Kaufman's daughters and charitable organization--In 1998, Kaufman, Canadian resident, and applicant agreed to sell shares in company--Applicant received $16,051,708 for its shares--In October 1998, in connection with sale of shares, applicant filed request with Canada Customs and Revenue Agency (CCRA) to obtain certificate under ITA, s. 116 without any payment of tax, on grounds under Canada-Barbados tax treaty, any capital gain resulting from its disposition of shares taxable exclusively in Barbados--In October 1998, Internal Audit Section of CCRA requested additional information from applicant for purpose of determining application of general anti-avoidance rule (GAAR)--Application dismissed--As applicant not asking Court to issue mandamus forcing Minister to issue certificate pursuant to ITA, s. 116, decision on this point would be exercise in futility--In any event, 30-day time limit for application for judicial review long expired--As to obligation to consider tax diligently under ITA, s. 152, provision, read in entirety, conferring some discretion on Minister with respect to timing of assessment--Order of mandamus not issued as respondent established delay in issuing assessment not unreasonable: Apotex Inc. v. Canada, [1994] 1 F.C. 742 (C.A.); affd [1994] 3 S.C.R. 1100--Here, applicant's tax return examined because of possible application of GAAR, requiring detailed analysis and gathering of expert opinions--Respondent further alleging could not begin examining tax return until end of June 1999, when received all pertinent documents--Mandamus not available to applicant herein--ITA, s. 116 specifically applicable to non-resident vendors who dispose of certain types of Canadian property and consequently has precedence over more general provisions invoked by applicant: ITA, ss. 158, 225.1(1)--Here, amount of $5,350,603 paid by purchaser pursuant to ITA, s. 116(5)--Any excess payment refundable to applicant subsequent to assessment of income tax return for 1998 fiscal year--Therefore, pursuant to ITA, s. 116, as Minister has not yet completed assessment of applicant's tax return, not required to reimburse applicant sum of $5,350,603--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, ss. 116 (as am. by S.C. 1994, c. 7, Sch. II, s. 87; 1998, c. 19, s. 133), 152 (as am. by S.C. 1994, Sch. II, s. 125; Sch. VII, s. 15; Sch. VIII, s. 90; c. 8, s. 20; c. 21, s. 76; 1995, c. 3, s. 46; 1996, c. 21, s. 39; 1998, c. 19, ss. 42, 181), 158, 225.1(1) (as am. by S.C. 1998, c. 19, s. 225; S.C. 1994, c. 7, Sch. VIII, s. 131(1)).