Munn v. The Queen

Munn v. The Queen
Court (s) Database
Tax Court of Canada Judgments
Date
2003-03-17
Neutral citation
2003 TCC 110
File numbers
2002-3036(GST)I
Judges and Taxing Officers
Michael J. Bonner
Subjects
Part IX of the Excise Tax Act (GST)
Decision Content
Docket: 2002-3036(GST)I
BETWEEN:
TODD J.R.H. MUNN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on March 5, 2003 at Toronto, Ontario,
Before: The Honourable Judge Michael J. Bonner
Appearances:
For the Appellant:
The Appellant himself
Counsel for the Respondent:
Joel Oliphant
____________________________________________________________________
JUDGMENT
The appeal from the assessment made under Part IX of the Excise Tax Act, is dismissed.
Signed at Toronto, Ontario, this 17th day of March 2003.
"Michael J. Bonner"
T.C.J.
Citation:2003TCC110
Date: 20030317
Docket: 2002-3036(GST)I
BETWEEN:
TODD J.R.H. MUNN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Bonner, T.C.J.
[1] This is an appeal from an assessment of tax under Part IX of the Excise Tax Act (the "Act"). By that assessment the Minister of National Revenue (the "Minister") disallowed a deduction of $7,654.50 claimed by the Appellant as an input tax credit in respect of Goods and Services Tax (GST) paid on the supply of a truck.
[2] The Appellant is an individual registered for purpose of s. 240(1) of the Act. He is engaged in the supply of trucking services. For purposes of that activity he arranged to acquire a new 1998 Western Star truck.
[3] The following transactions took place:
a) the truck was purchased by ABN Amro Leasing from Hillman's Truck Service on May 22, 1998 at a cost of $109,350.00 plus $7,654.50 in GST for a total of $117,004.50; - and -
b) the truck was leased by Equipment Express Inc. to the Appellant on May 25, 1998.
[4] The evidence does not make clear how title to the truck moved from ABN Amro Leasing to Equipment Express but I gather from the Appellant's testimony that the two organizations work together.
[5] The terms of the lease to the Appellant were:
Capital Cost:
$118,000.00
Terms
60 months
Interest Rate
9.5%
Monthly Payment
$2,478.22
G.S.T.
$173.48
P.S.T.
$198.26
TOTAL
$2,849.96
[6] The Appellant testified that the $118,000.00 capital cost named in the lease included the $7,654.50 in GST paid by ABN Amro on the purchase of the truck from Hillman's Truck Service. That may well be so but the Appellant produced no evidence to support what is essentially an assumption made by him. Moreover there is no rule which prevents a lessor from loading any amount into the figure he uses as the capital cost of property which is to be leased. Capital cost, like any other element of the lease, is an amount which the parties to the lease must negotiate. In any event, it is in respect of the tax so paid that the Appellant claimed the input tax credit.
[7] The input tax credit which the Appellant seeks is governed by s. 169(1) of the Act which reads in part as follows:
Subject to this Part, where a person acquires or imports property or a service or brings it into a participating province and, during a reporting period of the person during which the person is a registrant, tax in respect of the supply, importation or bringing in becomes payable by the person or is paid by the person without having become payable, the amount determined by the following formula is an input tax credit of the person in respect of the property or service for the period:
A X B
where
A is the tax in respect of the supply, importation or bringing in, as the case may be, that becomes payable by the person during the reporting period or that is paid by the person during the period without having become payable; and
B is ...
[8] Because the $7,654.50 neither became payable by the Appellant nor was paid by him as tax in respect of the supply of the truck, the "A" figure in the s. 169 formula is zero and the credit is also zero.
[9] The appeal must therefore be dismissed.
Signed at Toronto, Ontario, this 17th day of March 2003.
"M.J. Bonner"
T.C.J.
CITATION:
2003TCC110
COURT FILE NO.:
2002-3036(GST)I
STYLE OF CAUSE:
Todd J.R.H. Mann and Her Majesty the Queen
PLACE OF HEARING:
Toronto, Ontario
DATE OF HEARING:
March 5, 2003
REASONS FOR JUDGMENT BY:
the Honourable Judge M.J. Bonner
DATE OF JUDGMENT:
March 17, 2003
APPEARANCES:
For the Appellant:
The Appellant himself
Counsel for the Respondent:
Joel Oliphant
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada