[OFFICIAL ENGLISH TRANSLATION]
2001-53(GST)I
BETWEEN:
STÉPHAN DUSSAULT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on October 2, 2001, at Montréal, Quebec, by
the Honourable Judge Louise Lamarre Proulx
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Alain-François Meunier
JUDGMENT
The appeal from the goods and services tax assessment made under the Excise Tax Act, the notice of which is dated November 16, 2000, and bears number 7P0165, is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and assessment on the following basis: the amount of tax payable to be collected by the appellant is $5,469.33 and the amount of the input tax credit to which he is entitled should be increased by $500, the whole in accordance with the attached Reasons for Judgment.
The appellant is entitled to no further relief.
Signed at Ottawa, Canada, this 31st day of October 2001.
|
"Louise Lamarre Proulx" |
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Date: 20011031
Docket: 2001-53(GST)I
BETWEEN:
STÉPHAN DUSSAULT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Lamarre Proulx, J.T.C.C.
[1] This is an appeal under the informal procedure from an assessment made under the Excise Tax Act (the "Act") with respect to the period from October 1, 1995, to December 31, 1998.
[2] The question at issue in this case concerns the amount of tax to be collected and the amount of the input tax credit under sections 221, 225 and 169 of the Act.
[3] The appellant and Francine Guidi, a tax auditing technician, testified.
[4] The appellant admitted that he was a registrant for the purposes of Part IX of the Act and that he operated a business as a business turnaround consultant. He also admitted that his books and accounting records for the period at issue were deficient.
[5] The evidence showed that the appellant had failed to a significant degree to remit the tax that he had billed to the recipients of his services. According to the original audit, he billed an amount of $6,482.67 as tax and on his returns reported an amount of $535. The appellant tried to account for this state of affairs by the fact that he billed certain amounts as tax at the request of a recipient although he should not have done so, for, according to the appellant, those amounts were royalties owed to him. However, the appellant's invoices for that recipient referred to an amount of tax and the appellant, as an agent for her Majesty, collected that amount of tax. This explanation had already been given to the officers of the Minister of National Revenue (the "Minister") who had not accepted it. The Court confirmed to the appellant that the tax collected had to be remitted to the Minister. He should have understood this already since, at the hearing, the argument dealt mainly with the amount of the input tax credit.
[6] According to the Minister's auditor, who based her conclusion on the invoices issued by the appellant, the amount of tax payable to be collected was $5,469.33. The appellant's calculation was $5,228.31. There was no real discussion regarding the total, and I accept the auditor's amount.
[7] The appellant introduced as Exhibit A-1 a description of his income for each quarter, beginning in October 1995 and ending in April, May and June 1998. The description includes the amounts of tax billed. Next there came a statement of expenses. These documents were sent to the auditor who analysed them in a document filed in evidence as Exhibit I-5. The appellant claimed an amount of $3,750.06 and the auditor allowed $1,558.79.
[8] The above-mentioned Exhibit I-5 is a 13-page enumeration of the inputs that were disallowed. The auditor explained why they were disallowed: there were, inter alia, cases where no amount for tax appeared on the invoice, where the invoices are undated, where a subscription to the newspaper La Presse was involved, where entertainment expenses were claimed in full when what is eligible as an input tax credit is 50 per cent thereof, where amounts of tax on car insurance and office insurance were not eligible because they were not amounts of tax under the Act, and where decorating expenses unrelated to office expenses were involved. The auditor testified that she would have liked to visit the appellant's office, located in his residence, and that he did not authorize her to do so. The appellant, in his testimony, denied this version of the facts.
[9] After hearing the appellant's comments concerning some of the inputs that were disallowed, namely with regard to the proportion disallowed for the telephone, the communications service, the Internet and cable, I am of the opinion that the amount of ITC allowed in respect of these could be increased by $500. Otherwise, it is my view that the auditor's disallowance of certain inputs following an objective analysis of the invoices submitted by the appellant was done with care and in accordance with the provisions of the Act.
[10] The appeal is allowed on the following basis: the amount of tax payable to be collected by the appellant is $5,469.33 and the amount of the input tax credit to which he is entitled should be increased by $500.
Signed at Ottawa, Canada, this 31st day of October 2001.
|
"Louise Lamarre Proulx" |
J.T.C.C.