Tax Court of Canada


Public college may have credit against tax applied retroactively

Appeal by registrant from assessment by Minister under Excise Tax Act (Can.). Registrant was public college. Registrant purchased three properties on which it paid GST. Registrant was entitled to partial rebate of GST under s. 259 of Act, but failed to report purchases and pay net amount due in timely manner. Registrant noted failure to pay and made late payment, claiming rebate. Minister assessed interest on purchases as of payment due date but credited rebates only as of date they were claimed, so that interest on GST payable was assessed rather than on net amount due for period between payment due date and date of actual payment. Appeal allowed. Section 280 of Act only imposed interest on after-rebate amount owing by registrant. Provisions governing transaction could be read literally to impose tax on gross GST, but this was not purposive or contextual approach. Effect of s. 296(2.1) of Act is that public college may have credit against tax applied retroactively so that no interest arises on full amount of GST prior to rebate, when three conditions are met, and s. 296(2.1)(b) simply presumes that college applying for rebate would have retroactive treatment. Wording of rebate provided in s. 259(3) and (5) supported conclusion that registrant was entitled to rebate. Absurdity would result if sections were interpreted differently so that college that did not apply for rebate would get retroactive treatment, while college that did apply for rebate would not. Allowing rebate where error was discovered by Canada Revenue Agency or late GST return was filed without claiming rebate, but not allowing rebate where late return claiming rebate was filed, was improper. Portion of s. 296(2.1)(b) requiring that no claim for rebate be made could not be ignored in circumstances where claim had not been made at time of reassessment resulting in same rebate.

Humber College Institute of Technology & Advanced Learning v. R. (May. 7, 2013, T.C.C. [Informal Procedure], Campbell J. Miller J., File No. 2012-1721(GST)I) 228 A.C.W.S. (3d) 869.

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