Case information

Taxation — Goods and Services Tax — Ministerial discretion — Procedural fairness — Standard of procedural fairness that taxpayers can expect in challenging a discretionary decision with no further procedure available to obtain disclosure — Whether Canadian taxpayers are entitled to the same or similar disclosure on judicial review of a discretionary decision of the respondent to the disclosure that may be obtained by taxpayers who challenge an assessment — Excise Tax Act, R.S.C. 1985, c. E-15, s. 156.

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Section 156 of the Excise Tax Act, R.S.C. 1985, c. E-15 (“Act”) permits closely held corporations to make a joint election so that taxable supplies made between them are deemed to be for nil consideration and no GST or HST is collectible. Corporations could elect the benefit by completing a form and keeping it with their records without filing it with the respondent, as the applicants had done since April 1, 2007. Section 156 of the Act was amended effective January 1, 2015, to require that the election be made in a new, prescribed form and filed with the respondent. Notices of the change were published in Canada Revenue Agency publications and the election could be filed up to December 31, 2015, to cover the entire 2015 calendar year. The applicants were unaware of the change and did not file the form before January 1, 2016. After being made aware of the change and seeking advice, they subsequently filed the form in February 2016, asking that it be effective January 1, 2016. They later filed a form dated effective January 1, 2015. The respondent did not accept the late filing and re-assessed the applicants for the 2015 taxation year on the basis that they had not made the election.

The applicants brought applications for judicial review after the Minister refused to exercise the discretionary authority under subparagraph 156(4)(b)(ii) of the Act to accept their late filings of the election. The Federal Court dismissed the applications for judicial review, holding that the respondent had offered a procedurally fair decision that was both justifiable and justified on the record. The Federal Court of Appeal dismissed the appeals, holding that there was no breach of procedural fairness and that the respondent’s decision was reasonable.