Goods and Services Tax - Supply
Taxpayer owned shopping mall in which T.C. was commercial tenant. T.C. filed action against taxpayer, which alleged interference with its operation by taxpayer through harassment of employee of T.C.. Taxpayer filed counterclaim claiming tortious interference with contractual relations, because T.C. had secretly removed all fixtures, chattels and goods from leased premises, and taxpayer also claimed that T.C. had made false harassment claims. Taxpayer and T.C. reached settlement in which T.C. agreed to pay taxpayer $260,000 and taxpayer had claimed total amount of $756,000 from T.C. in counterclaim. Taxpayer also purchased sports utility vehicle for business purpose, and he purchased that specific vehicle due to his physical limitation, as this vehicle allowed him to enter and exit vehicle without too much difficulty. Minister found that s. 182(1) of Excise Tax Act (ETA) applied and that taxpayer had to pay HST on amount of $260,000, and that input tax credit (ITC) of $8,404.89 was not available in regards to vehicle. Taxpayer appealed. APPEAL ALLOWED. According to counterclaim, value of goods removed by T.C. was at least $250,000, therefore, pursuant to s. 50 of Commercial Tenancies Act, taxpayer was entitled to claim double value of goods removed, which was $500,000. Accordingly, half of amount claimed, namely penalty in amount of $250,000 did not fall within ambit of s. 182(1) of ETA. On pro rata basis, 67 per cent of amounts received have been received as consequences of breach of lease, but s. 182(1) of ETA did not apply to 33 per cent of amounts received, namely amount of $250,000 since it was received as punitive damages pursuant to s. 50 of Commercial Tenancies Act.
BH Parkway Place Ltd. v. The Queen (2019), 2019 CarswellNat 117, 2019 CarswellNat 84, 2019 TCC 7, 2019 CCI 7, Johanne D'Auray J. (T.C.C. [Informal Procedure]).
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