475588 Ontario Inc. v. Canada
A-398-94
Marceau J.A.
21/2/95
3 pp.
Application to set aside judgment of Tax Court of Canada on question of law -- Trial Judge not misdirected as to test to be applied to verify occurrence of valid conversion of capital asset to inventory -- Whether unequivocal change of use -- Sale of capital property not necessarily entailing conversion to inventory prior to time of disposition -- Capital property must be replaced when obsolete -- Taxpayer's intention, use of capital property must be looked at to determine whether converted to inventory -- Applicant operating leasing and rental business -- Not car dealer buying, reselling cars for profit--Manifesting no intention to alter nature of business from leasing company to car dealership -- Continuing to rent and lease cars and to dispose of them when obsolete -- Cars used as capital property until sold -- Applicant not subject to double taxation -- Paid federal sales tax when purchased vehicles for own use as capital property -- Case distinguishable from that of vendor whose inventory subject to federal sales tax and GST in absence of rebate--Application dismissed.