WTC Western Technologies Corp. v. Minister of National Revenue, (1985) 1 F.T.R. 119 (TD)

• Judge: Collier, J.
• Court: Federal Court (Canada)
• Case Date: December 09, 1985
• Jurisdiction: Canada (Federal)
• Citations: (1985), 1 F.T.R. 119 (TD)

WTC Western Tech. Corp. v. MNR (1985), 1 F.T.R. 119 (TD)

MLB headnote and full text

WTC Western Technologies Corporation v. Minister of National Revenue

(No. T-2626-85)

Indexed As: WTC Western Technologies Corp. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Collier, J.

December 18, 1985.

Summary:

A research and development company designated $24,875,000.00 under s. 194(4) of the Income Tax Act as monies received on the issue of its shares and debt obligations in April 1985. Section 194(1) of the Act made 50% of that amount the tax payable. The Minister of National Revenue levied an assessment for $12,437,500.00 on June 24, 1985, before the company's fiscal year ended (March 28, 1986) and before a return was required to be filed (September 28, 1986). The company submitted that the Minister exceeded his jurisdiction in assessing the tax before a return was filed and applied under s. 18 of the Federal Court Act for certiorari to quash the assessment and other incidental decisions. The Minister submitted that s. 29 of the Federal Court Act precluded an application under s. 18 where the company failed to appeal under the Income Tax Act.

The Federal Court of Canada, Trial Division, allowed the application and quashed the decision. The court held that s. 29 did not preclude an application under s. 18 where there was an excess or lack of jurisdiction as opposed to a right or wrong decision made with jurisdiction. The court held that the assessment could not be made until after a return was filed.

Courts - Topic 4046

Federal Court of Canada - Jurisdiction - Trial Division - Requirement of lack of other appeals - A taxpayer applied under s. 18 of the Federal Court Act to quash an assessment by the Minister of National Revenue - Appeals available under the Income Tax Act were not taken, therefore the Minister submitted that s. 29 of the Federal Court Act precluded the application - The Federal Court of Canada, Trial Division, held that certiorari was available under s. 18, where there was an excess or lack of jurisdiction as opposed to a right or wrong decision made after jurisdiction was properly taken.

Income Tax - Topic 7845

Returns, assessments and appeals - Assessments - Time for - A research and development company designated $24,875,000.00 under s. 194(4) of the Income Tax Act as monies received on the issue of shares and debt obligations in April 1985 - Section 194(1) of the Act made 50% of that amount the tax payable - The Minister of National Revenue levied an assessment for $12,437,500.00 on June 24, 1985, before the company's fiscal year ended (March 28, 1986) and before a return was required to be filed (September 28, 1986) - The Federal Court of Canada, Trial Division, quashed the assessment, because it could only be made after the company filed its return.

Cases Noticed:

Parsons et al. v. M.N.R. (1983), 83 D.T.C. 5330 (F.C.T.D.), dist. [para. 24].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 150(1) [para. 10]; sect. 152(1) [para. 11]; sect. 152(7) [para. 18]; sect. 159 (2), sect. 159(3) [para. 14]; sect. 194(1) [para. 3]; sect. 194(4) [para. 1]; sect. 195(1) [para. 6]; sect. 195(2) [para. 7]; sect. 195(8) [para. 9].

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, sect. 18, sect. 29.

Counsel:

Appearances: K.J. Anderson, for the applicant;

J. Kennedy, for the respondent.

Solicitors of Record:

Anderson, Baillie & Company, Vancouver, B.C., for the applicant;

F. Iacobucci, Deputy A.G. for Canada, for the respondent.

This application was heard on December 9, 1985, at Vancouver, B.C., before Collier, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on December 18, 1985.