INCOME TAX |
Practice |
Capital Vision, Inc. v. M.N.R.
T-493-00
2002 FCT 1317, Heneghan J.
19/12/02
35 pp.
Judicial review of Minister's decision to serve requirement letters (to provide documents and information)--Minister serving requirements on applicant Capital Vision in course of 1998 audit--Capital Vision substantially complying with requirements but refusing to provide certain names to protect client confidentiality, pending Minister's compliance with relevant portions of Income Tax Act--Minister making ex parte application to judicially authorize requirement to obtain information relating to compliance of unnamed taxpayers-- Authorization granted--Applicants seeking review of authorization order--Parties agreeing on hearing date-- Minister abandoning "old" requirements and issuing "new" requirements in 2000 to Capital Vision and other applicants without judicial authorization--New requirements compelling documents and information from Capital Vision and documents only from other applicants relating to unnamed persons--Applicant arguing requirement of providing information on unnamed persons governed by s. 231.2(2) and Minister must have judicial authorization--New requirement purporting to seek information to complete audit on Capital Vision--Minister's allegation that needs to know about unnamed persons to complete audit of Capital Vision triggering s. 231.2(2), (3)--By proceeding with demand in absence of judicial authorization, Minister attempting to do indirectly what cannot do directly--Minister not proceeding in manner authorized by law--Portion of requirement referring to unnamed persons not severable--Apparent intention to circumvent Capital Vision's right to review requirement pursuant to s. 231.2(5), (6) colouring entire requirement--Minister saying purpose of new requirements different i.e. audit of Capital Vision, rather than audit of unnamed persons--But still seeking same information, documents as sought in 1998--Remains subject to requirements of Act pursuant to s. 231.2--Not clear from requirements served on applicants other than Capital Vision that documents sought in relation to audit of Capital Vision--Those applicants thereby denied right to fair notice as to purpose of requirements--Because requirements relate to provision of documents relative to unnamed person, Minister required to obtain judicial authorization for new requirements pursuant to s. 231.2(2), (3)--S. 241, imposing duty on Minister to protect taxpayer confidentiality subject to other provisions including s. 231.2--Minister improperly exercising discretion--Decision to serve new requirements invalid and unlawful--Requirements quashed--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, ss. 231.2 (as enacted by S.C. 1996, c. 21, s. 58), 241 (as am. by S.C. 1994, c. 7, Sch. VIII, s. 43).