Seaspan International Ltd. v. Minister of National Revenue, (2002) 220 F.T.R. 303 (TD)
Judge | Blais, J. |
Court | Federal Court (Canada) |
Case Date | June 14, 2002 |
Jurisdiction | Canada (Federal) |
Citations | (2002), 220 F.T.R. 303 (TD) |
Seaspan Intl. Ltd. v. MNR (2002), 220 F.T.R. 303 (TD)
MLB headnote and full text
Temp. Cite: [2002] F.T.R. TBEd. JN.039
Seaspan International Ltd. (plaintiff) v. Her Majesty the Queen (defendant)
(T-1709-90; T-1710-90; T-1711-90; T-1712-90; 2002 FCT 675)
Indexed As: Seaspan International Ltd. v. Minister of National Revenue
Federal Court of Canada
Trial Division
Blais, J.
June 14, 2002.
Summary:
A taxpayer claimed a refund of federal sales tax and excise tax paid on diesel fuel that it had purchased. The taxpayer relied on s. 23(8)(c) of the Excise Tax Act and s. 3 of Part VI of Schedule III of the Act. The Minister of National Revenue denied the refund. The taxpayer commenced an action seeking the refund.
The Federal Court of Canada, Trial Division, held that the taxpayer was entitled to the refund.
Editor's note: for related decisions see 66 F.T.R. 286 and 229 N.R. 132.
Sales and Service Taxes - Topic 561.1
Sales tax - Exemptions - Diesel fuel to generate electricity - Diesel fuel used in the generation of electricity was exempt from excise and sales tax, except where the electricity was used primarily in the operation of a vehicle (Excise Tax Act, s. 23(8)(c) and Schedule III, Part VI, s. 3) - A taxpayer owned and operated tug boats and self-propelled train ferries - Approximately 10% of the diesel fuel purchased by the taxpayer was used for auxiliary engines which powered generators that produced electricity for the electrical equipment on the vessels - Much of the electrical equipment provided "hotel services" for crew (and sometimes non-crew) such as cooking or heating and air conditioning for accommodations and working spaces - The Federal Court of Canada, Trial Division, held that the taxpayer was entitled to the exemption - The electricity used for hotel services was not used to propel or navigate the vessels - The court rejected the Crown's argument that electricity which provided comfort to crew members should be seen as electricity used primarily in the operation of the vehicle.
Cases Noticed:
Via Rail Canada Inc. v. Minister of National Revenue, [1993] C.I.T.T. No. 111, consd. [para. 29].
R. v. Turbide (1986), 76 N.B.R.(2d) 138; 192 A.P.R. 138 (T.D.), dist. [para. 34].
Vaillancourt v. Minister of National Revenue (1991), 132 N.R. 133; 91 D.T.C. 5408 (F.C.A.), refd to. [para. 39].
Johns-Manville Canada Inc. v. Minister of National Revenue (1985), 60 N.R. 244; 85 D.T.C. 5373 (S.C.C.), refd to. [para. 40].
Fries v. Minister of National Revenue (1990), 114 N.R. 150; 90 D.T.C. 6662 (S.C.C.), refd to. [para. 41].
Statutes Noticed:
Excise Tax Act, R.S.C. 1985, c. E-15, sect. 23(8)(c) [para. 8]; sect. 51(1) [para. 9]; Schedule III, Part VI, sect. 3 [para. 10].
Authors and Works Noticed:
Canada, Hansard, House of Commons Debates, June 23, 1966, p. 6812 [para. 30].
Counsel:
Timothy W. Clarke and Christopher S. Wilson, for the plaintiff;
Jan Brongers and Michael Roach, for the defendant.
Solicitors of Record:
Bull Housser & Tupper, Vancouver, British Columbia, for the plaintiff;
Morris Rosenberg, Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant.
This action was heard at Vancouver, British Columbia, on May 7 and 8, 2002, by Blais, J., of the Federal Court of Canada, Trial Division, who delivered the following decision on June 14, 2002.
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