2002-1595(GST)I
BETWEEN:
PARMJIT CHEEMA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on September 25 and November 25, 2002, and judgment delivered orally on January 23, 2003, at Vancouver, British Columbia, by
the Honourable Judge E.A. Bowie
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nadine Taylor Pickering
JUDGMENT
The appeal from the assessment made under the Excise Tax Act, notice of which is dated December 20, 1995 and bears number 942151689129P0013 is allowed on the basis that the Appellant is entitled to receive the new housing rebate under section 256 of the Act in respect of the residence at 756 McArthur Drive, Kamloops, British Columbia.
Signed at Ottawa, Canada, this 29th day of January, 2003.
|
"E.A. Bowie" |
J.T.C.C.
Date: 20030129
Docket: 2002-1595(GST)I
BETWEEN:
PARMJIT CHEEMA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Bowie J.
[1] The Appellant and his brother, Jaswant Cheema, purchased two adjacent lots in Kamloops, British Columbia, in January 1994. Jaswant Cheema is a builder, and he constructed two semi-detached houses on these lots, one at 754 MacArthur Drive for the use of himself and his family, and one at 756 MacArthur Drive for the use of the Appellant and his family. Both properties were registered in the name of Jaswant Cheema, but the Appellant's evidence was that the house occupied by him and his family was beneficially owned by him, and that there was a trust instrument executed by Jaswant Cheema to establish that fact. This instrument was made available to Revenue Canada's assessor, but he was unwilling to accept that it was genuine. That Parmjit Cheema owned 756 MacArthur Drive beneficially is not now in dispute. In fact, in a separate appeal brought before this Court by Jaswant Cheema, the Honourable Judge McArthur so held.
[2] I do not propose to go into all the details surrounding the building of these residences as it is only necessary for the purposes of this appeal to know that Parmjit Cheema was as a matter of fact and law the owner of 756 McArthur Drive in Kamloops, B.C., and that he was therefore entitled to apply for and to receive the new housing rebate provided for in section 256 of the Excise Tax Act in respect of that property. Construction of the residence was completed and the Appellant and his family moved into it in May 1994, at which time the two-year period during which he was entitled to apply for the rebate began to run. He in fact filed a claim for the rebate on July 25, 1994.
[3] The Appellant is a member of the Royal Canadian Mounted Police, and in September of that year the force transferred him to Surrey, B.C. At this point the evidence becomes considerably confused. It can be said with certainty, however, that the Appellant's application for a new housing rebate was refused, by a Notice of Assessment issued on December 20, 1995. The Appellant testified that he first became aware of this Notice of Assessment in October 1996. It is not clear to me whether the delay in him becoming aware of it is attributable to a failure on his part to inform Revenue Canada of his new address in Surrey, or if there was some other reason. In any event, his inquiries elicited the information that his application for the new housing rebate had been refused because Revenue Canada was of the view that the house in fact was owned by his brother Jaswant. The Appellant was advised by Revenue Canada that, for that reason only, his brother was entitled to apply for and receive the new housing rebate, and that the matter could therefore be pursued only by an application in his brother's name. This, of course, was erroneous advice, as was eventually established by Judge McArthur's Judgment of December 20, 2000, in the case of Jaswant Cheema. Despite the fact that he was being advised not only by the officials of Revenue Canada, but also by an accountant and a lawyer, the Appellant failed to file a Notice of Objection in response to the Notice of Assessment of December 20, 1995, within the 90-day period limited for doing so.
[4] On March 27, 2001, the Appellant filed a second application for the new housing rebate, because he had recently become aware of Judge McArthur's decision in his brother's case. This application, however, was filed almost seven years after he and his family first occupied the residence, and it is clearly out of time.
[5] If these were all the facts, then the inevitable result would be that the Appellant's first application for the new housing rebate could not succeed, as he had been erroneously assessed to deny it, but had not filed a Notice of Objection to that assessment, and his second application could not succeed because it was made too late. These time limits not having been met, the Appellant would not be in a position to receive the rebate, although it clearly had been his entitlement. Had he been advised to file a Notice of Objection, and later a Notice of Appeal, the probability is that his appeal would have been heard by Judge McArthur with his brother's appeal, and it would have succeeded.
[6] It emerged during the hearing before me that the Appellant made an application in January 2002, to the Minister seeking a remission order from the Governor in Council pursuant to section 23 of the Financial Administration Act,[1]and that he has followed it up twice since. At the time of the hearing before me, some nine months later, he had had no response to that application. The Appellant followed the course of action that he did, and failed to follow the course of action that he should have, as a result of advice given to him by the officers of the Canada Customs and Revenue Agency. That was his evidence and I accept it. It is therefore understandable that he felt that he was entitled to a remission order.
[7] But for one other fact that emerged during the course of the hearing before me, the saga would end at this point, with the Appellant's legal entitlement gone and his hope of receiving the rebate to which he was at one time unquestionably entitled depending entirely upon the grace of Cabinet, on the recommendation of the Minister of National Revenue. The additional fact to which I refer is that on June 25, 1997, Revenue Canada wrote to the Appellant in the following terms:
This notice refers to your application made under section 303 of the Excise Tax Act, to extend the time for filing a Notice of Objection to the Goods and Services Tax [sic] dated June 14, 1996.
The Minister of National Revenue has considered the information and reasons set forth in your application and renders the following decision.
After considering the application, and being satisfied that the conditions set out in section 303 have been met, the extension of time for filing the objection is granted. The Notice of Objection is considered to be filed as of the date of this letter.
Should you wish to communicate with us regarding the Notice of Objection number 115201758, please direct your correspondence to the address noted below.
[8] The existence of this letter first became known to counsel for the Respondent during a recess in the course of the hearing before me. Having become aware of it, she very properly brought it to my attention. She also, quite properly, called a witness, Cosimo Stea, who is an officer of the Agency and who had reviewed the Agency's file in relation to the Appellant's rebate applications, and had also taken steps to retrieve information from the Agency's computer regarding Notice of Objection no. 115201758. The thrust of his evidence was that the Notice of Objection referred to in the letter that is Exhibit R-1 was in fact not that of this Appellant but of his brother, Jaswant. That notice of objection had been forwarded to Revenue Canada under cover of a letter signed by both brothers; the Minister's intention had been that the letter be addressed to Jaswant Cheema; instead it was sent to Parmjit Cheema. He drew this inference largely from the number of the notice of objection which is on the face of the letter, and from the fact that the date June 14, 1996, referred to therein is only one day distant from June 13, 1996, the date of the assessment pertaining to Jaswant Cheema.
[9] I have no doubt that Mr. Stea gave his evidence in good faith. However, the fact remains that the Appellant was granted an extension of time and was also told that the Minister considered that he had a valid Notice of Objection filed with the Minister which would satisfy the requirements of section 301 of the Excise Tax Act. Although the Minister now seeks to resile from it, in my view, there is no question that Exhibit R-1, whether it was intended to or not, did in fact confer upon the Appellant an extension of time to object pursuant to section 303.
[10] I said that Mr. Stea gave his evidence in good faith, however, I do not accept that his knowledge of the records of Revenue Canada was encyclopedic, or that in fact his conclusions drawn from the records he reviewed is the correct one.
[11] It is common ground that the Minister has neither confirmed this Appellant's assessment, nor reassessed him since June 25, 1997. He therefore became entitled, pursuant to section 306 of the Act, to appeal to this Court 180 days later, on December 22, 1997. My conclusion therefore is that the Appellant has an appeal validly before this Court from the refusal of his first application for the GST new housing rebate.
[12] It was never disputed in the proceeding before me that if the Appellant had an appeal validly before the Court then he would be entitled to succeed in that appeal. The appeal is therefore allowed and the assessment is referred back to the Minister for reconsideration and reassessment on the basis that the Appellant is entitled to receive the new housing rebate under section 256 of the Act in respect of the residence at 756 McArthur Drive, Kamloops, B.C.
[13] I have been advised since I drafted these reasons that the Appellant's application for a remission order has been approved. The order has been granted and he has received some funds as a result of it. However, as there are some considerations of interest and of the filing fee that the Appellant paid to bring the appeal before this Court which are independent of the remission order, I have pronounced the judgment that I have and the reasons for it because the matter is not entirely moot.
Signed at Ottawa, Canada, this 29th day of January, 2003.
|
"E.A. Bowie" |
J.T.C.C.
|
|
|
|
COURT FILE NO.: |
2002-1595(GST)I |
|
|
|
|
STYLE OF CAUSE: |
Parmjit Cheema and Her Majesty the Queen |
|
PLACE OF HEARING |
Vancouver, British Columbia |
|
DATE OF HEARING |
September 25 and November 25, 2002 |
|
REASONS FOR JUDGMENT BY: |
The Honourable Judge E.A. Bowie |
|
DATE OF JUDGMENT |
January 29, 2003 |
|
APPEARANCES: |
|
For the Appellant: |
The Appellant himself |
|
Counsel for the Respondent: |
Nadine Taylor Pickering |
|
COUNSEL OF RECORD: |
|
For the Appellant: |
|
Name: |
-- |
|
Firm: |
-- |
|
For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |