CUSTOMS AND EXCISE |
Excise Tax Act |
Groupe Bocenor Inc. v. M.N.R.
T-1907-90
Tremblay-Lamer J.
18/5/00
19 pp.
Claim for reimbursement of $420,101 plaintiff alleged paid by mistake of fact, law or otherwise as tax during period February 1, 1984 to December 31, 1987--Claim based on Excise Tax Act, s. 68--On March 4, 1988, Fenebec Inc, wholly-owned subsidiary of plaintiff until wound up, sent defendant claim for reimbursement of $609,595.94 federal sales tax for period in question--Fenebec Inc., business manufacturing frames, doors and windows which sold all its production to retailers or construction businesses--MNR adopted policy that allowed manufacturers of frames, doors and windows to pay federal sales tax using "determined value" method, that is, calculating tax on regular list price, less all-inclusive discount of 25%, tax to be computed as included in remainder--On August 2, 1988, defendant sent Fenebec notice of determination quashing claim for reimbursement and denying plaintiff amount claimed--Fenebec Inc. objected to said notice of determination--Whether defendant had discretionary power to create "determined values" administrative policy--Since claim for reimbursement made in 1988, Excise Tax Act, s. 68 legal basis of such claim--Parties admitted administrative policy in Memorandum ET-202 not based on legislative or regulatory provision but on broad discretionary power enjoyed by Minister to make directives for better administration of Act--Minister's discretion in this regard broad--Determined values system adopted to ensure more equitable treatment--Although objective sought by Minister highly praiseworthy administrative policy, namely Memorandum ET-202, illegal exercise of discretionary power--Act, s. 50 clear and precise: imposes sales tax based on sale price--Memorandum ET-202 offers alternative methods not calculated on sale price, and so not in compliance with Act--Since Memorandum ET-202 invalid, no longer possible for plaintiff to rely on right to reimbursement under Act, s. 68, since did not pay by mistake of fact, law or otherwise--Action dismissed--Excise Tax Act, R.S.C., 1985, c. E-15, ss. 50 (as am. by R.S.C., 1985, (1st Supp.), c. 15, s. 19; (2nd Supp.), c. 1, s. 190; c. 7, s. 16; c. 42, ss. 4, 5; (4th Supp.), c. 12, s. 16; S.C. 1988, c. 65, s. 114; 1989, c. 22, s. 3), 68 (as am. by R.S.C., 1985 (1st Supp.), c. 15, s. 24; (2nd Supp.), c. 7, ss. 23, 24).