[2011] 4 F.C.R. D-6
Customs and Excise
Excise Tax Act
Appeal from Tax Court of Canada (T.C.C.) decision (2010 TCC 424) dismissing appeal from appellant’s assessment under Excise Tax Act, R.S.C., 1985, c. E-15 rejecting appellant’s claims for input tax credits for specific period—Appellant operating financial services business, other businesses (computer consulting, home renovation, home staging)—Claiming entitled to input tax credits in relation to businesses other than financial services business but T.C.C. finding other businesses not falling within definition of “commercial activity” in Act, s. 123(1)—In context herein, “commercial activity” specifically defined for GST purposes to mean business carried on with reasonable expectation of profit—Therefore, appellant entitled to input tax credits in respect of other than financial businesses only if carrying them on with reasonable expectation of profit—T.C.C. in present case making factual findings reasonably open thereto given documentary evidence, testimony presented—However, fundamental issue of whether application of statutory definition of “commercial activity” properly before T.C.C. at all remaining to be resolved—Although appellant informing Minister of assertion that input tax credits claimed in relation to businesses other than financial services business, Minister not informing appellant of position in T.C.C. that any of appellant’s business activity other than financial services business would fall outside statutory definition of “commercial activity”—Minister’s lack of notice causing significant prejudice because depriving appellant of notice that appeal’s success could depend on evidence relating to reasonable expectation of profit test—Not reasonably open to T.C.C. to conclude that appellant having sufficient notice that Minister would rely on reasonable expectation of profit test, that appellant not prejudiced by deficiency—Appeal allowed.
Bowden v. Canada (A-330-10, 2011 FCA 218, Sharlow J.A., judgment dated June 29, 2011, 10 pp.)