Federal Court


Goods and Services Tax

Administration and enforcement

Minister refusing to reduce or cancel tax penalties and interest after considering history of compliance

Registrant sought relief from penalties and interest on GST/HST account based on financial hardship and inability to pay. Minister of National Revenue refused to reduce or cancel interest and penalties under s. 281.1 of Excise Tax Act after considering registrant’s explanations, financial information, and history of compliance. Registrant brought application for judicial review on ground that decision did not address all facts, including registrant’s principal’s marriage breakdown and mental state. Application dismissed. Minister’s decision was reasonable. Registrant could not advance position relating to principal’s marriage breakdown or mental state because argument was available to registrant but not relied on in its requests to Canada Revenue Agency. Evidence relating to purported extraordinary circumstances of principal’s marriage breakdown was not admissible. Decision was rendered after extensive review of registrant’s circumstances. It was reasonable to separate principal’s personal financial hardship from that of registrant. Minister reasonably found that registrant was continuing to operate throughout and after period of financial difficulty, and reasonably inferred that registrant was not experiencing type of financial hardship that would justify taxpayer relief. There was nothing before Minister explaining why returns were not filed on time so it was reasonable to refuse to grant relief with respect to penalties arising from late returns.

Dougal & Co Inc. v. Canada (Attorney General) (2017), 2017 CarswellNat 7094, 2017 CarswellNat 7572, 2017 FC 1075, 2017 CF 1075, Alan S. Diner J. (F.C.).

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