Tax Court’s power was limited by statute to determination of how much tax, if any, was payable

Tax - Income tax - Administration and enforcement

Taxpayer appealed from assessment, with Notice of Appeal focusing on conduct of CRA officials and whether exercise of Minister’s civil audit powers to gather oral and documentary evidence violated his rights under ss. 7 and 8 of Canadian Charter of Rights and Freedoms. Minister brought motion to strike paragraphs from taxpayer’s Notice of Appeal. Motion granted. Long line of jurisprudence supported Minister’s position that conduct of Minister and CRA officials was irrelevant to determining validity and correctness of assessment. It was plain and obvious that arguments contained in paragraphs of taxpayer’s pleadings relating to CRA conduct, including referral by auditor to enforcement division while continuing with civil audit to obtain information, had no reasonable possibility of success. While Minister was prohibited from using statutory compulsion powers to collect information once investigation became penal in nature, jurisprudence established that parallel and simultaneous criminal investigation could be conducted in addition to audit investigation. It was up to criminal court, if prosecution occurred, to determine if predominant purpose of Minister’s exercise of powers in issuing requirements for information in audit was penal in nature. Based on conclusion in prior decisions with almost identical fact scenarios to taxpayer’s pleadings, paragraphs challenging admissibility of evidence obtained in audit should be struck as it was plain and obvious that facts pleaded disclosed no Charter violations. Taxpayer’s proposed application to Tax Court of precedent on jurisdiction of specialized tribunals to render Charter remedies could not be correct. While Court had authority to address Charter issues connected to issues properly before it, Tax Court’s power was limited by statute to determination of how much tax, if any, was payable. Precedent could not override legislative intent that limited remedies available to Tax Court to those specifically designated in s. 171 of Act.

Brooks v. The Queen (2019), 2019 CarswellNat 604, 2019 TCC 47, Diane Campbell J. (T.C.C. [General Procedure]).

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