Federal Appeal


Tax

Administration and enforcement

Validity of tax assessments must be adjudicated by Tax Court of Canada

In 2011, Minister of National Revenue sent notice of assessment to individual for outstanding GST. In July 2015, CRA issued requirement to pay. In September 2015, individual claimed that he filed notice of objection. In October 2015, individual filed statement of claim under Simplified Action Rules of Federal Court seeking declaration that requirement to pay was null and void contrary to Indian Act, Treaty No. 8 and Constitution Act, and for damages for amounts seized pursuant to requirement to pay. Pursuant to judgment by Federal Court (FC), individual’s statement of claim was ordered struck without leave to amend on basis that claim disclosed no reasonable cause of action. Individual appealed. Appeal dismissed. In current case, FC held that essential character of individual’s claim was indirect challenge to validity of his 2011 tax reassessment. Such characterization did not amount to palpable and overriding error. Even though individual’s case was cast as damage claim, only damages sought flowed directly from tax re-assessment and sought reimbursement of monies paid in satisfaction of that re-assessment. Individual’s claim as pleaded was nothing but challenge to validity of tax re-assessment. Constitutional dimension of claim did nothing to alter this claim or to oust Tax Court of Canada’s (TCC) jurisdiction. Cases cited by individual confirmed that questions related to validity of tax assessments must be adjudicated by TCC irrespective of how claim is framed. Motions judge properly characterized claim as being indirect challenge to tax assessment. It was plain and obvious that TCC had exclusive jurisdiction over question.

Horseman v. Canada (2016), 2016 CarswellNat 5555, 2016 FCA 252, Gauthier J.A., Yves de Montigny J.A., and Gleason J.A. (F.C.A.).

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