Federal Appeal


Goods and Services Tax

Assessment returned to minister on basis that purchaser was entitled to GST/HST new housing rebate in respect of townhouse

Minister assessed purchaser under Excise Tax Act (Can.), disallowing claimed GST/HST new housing rebate for purchase of townhouse. Purchaser’s appeal was dismissed. Purchaser appealed. Appeal allowed. Tax Court judge found that purchaser intended to use townhouse as her primary place of residence but that she was not entitled to rebate as condition in s. 254(2)(g)(i)(A) of Act was not satisfied because she never occupied property. Tax Court judge erred in law by failing to consider where purchaser qualified for rebate by satisfying s. 254(2)(g)(ii) of Act, which was alternate means for satisfying condition in s. 254(2)(g) of Act. Minister acknowledged that purchaser satisfied s. 254(2)(g)(ii) of Act but argued that purchaser still did not qualify for rebate. Minister argued that Tax Court judge erred in law by relying solely upon purchaser’s evidence about her intent without considering objective manifestations of purpose. Evidence of objective manifestations was adduced by minister through purchaser’s oral testimony, which made Tax Court judge’s reference to “after hearing evidence of purchaser” at least somewhat ambiguous. Applying presumption that Tax Court judge knew and understood applicable law, it was not clear that Tax Court judge made palpable and overriding error in finding purchaser’s testimony sufficiently credible to overcome circumstantial evidence suggesting lack of requisite intent. More troubling was Tax Court judge’s statement during closing argument that he did not need to hear from minister’s counsel but issue of purchaser’s intent was squarely raised in minister’s pleadings and purchaser was cross-examined on minister’s assumptions about intent. Issue of intent was in play such that minister was heard on this issue. Tax Court judge’s judgment would be set aside and judgment that should have been made would be pronounced, with assessment returned to minister on basis that purchaser was entitled to GST/HST new housing rebate in respect of townhouse.

Ranjbar v. R. (Apr. 15, 2016, F.C.A., Eleanor R. Dawson J.A., D.G. Near J.A., and Richard Boivin J.A., A-344-15) 265 A.C.W.S. (3d) 258.

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