Docket UT95104
Order UT96-1

IN THE MATTER of an appeal by Omni-Plus Incorporated against a decision of the Provincial Tax Commissioner, dated July 14, 1995.

BEFORE THE COMMISSION

on Thursday, the 22nd day of February, 1996.

Linda Webber, Chair
Anne McPhee, Commissioner
Deborah MacLellan, Commissioner

Order

  Contents

Appearances & Witnesses

Reasons for Order

Introduction

Discussion & Findings

Disposition

Order

Appearances & Witnesses

1. For Omni-Plus Incorporated

Counsel:
Catherine M. Parkman

2. For the Provincial Tax Commissioner

Counsel:
Roger B. Langille, Q.C.

Witnesses:
James B. Ramsay, Provincial Tax Commissioner

R. Blair White,
Manager, Tax Administration,
Department of Provincial Treasury

3. For the Island Regulatory and Appeals Commission

Counsel:
Thomas A. Matheson

Staff:
Donald G. Sutherland
Director, Technical Services Division

Heather Walker
Recording Secretary

Reasons for Order

1. Introduction

These reasons address a preliminary matter raised in this appeal concerning the validity of Notice of Assessment No. 1019 issued to the Appellant, Omni-Plus Incorporated ("Appellant" or "Omni"). The notice in question was issued by the Revenue Division, Department of Finance (Provincial Treasury), on March 8, 1995.

Counsel for the Appellant, Ms. Parkman, contends that:

  1. the assessment was issued by an officer not duly appointed under the Revenue Administration Act, R.S.P.E.I. 1988, Cap. R-13.2;
  2. the assessment covers a period longer than that permitted under provincial law; and
  3. the assessment was issued prior to the Department having determined actual tax liability.

2. Discussion & Findings

2.1 Was the Assessment Issued by a Duly Appointed Officer

Notice of Assessment No. 1019 was signed by Fred Weatherby. Ms. Parkman contends that Mr. Weatherby was not duly appointed to determine and assess the tax payable. According to Ms. Parkman:

Pursuant to Section 3 (2) of the [Revenue Administration Act], the Commissioner may determine, assess and reassess any tax payable under a Revenue Act by any taxpayer and, under subsection (3), estimate the unpaid taxes. The Notice of Assessment in this case was not signed by the Provincial Tax Commissioner but by an employee in the Commissioner's Office. However, under the Act, the only individual empowered to 'determine and assess' is the Commissioner, and accordingly, the Notice of Assessment does not meet the requirements of the Act.

By way of Order in Council which took effect on the 22nd day of July, 1995, Cabinet amended the Revenue Administration Act so that the Minister could, by Notice published in the Royal Gazette, designate any officer of the Provincial Treasury to 'issue and sign notices of assessment and exercise the powers of the Commissioner pursuant to section 3 of the Revenue Administration Act.' These amended regulations did not take effect until after the Notice of Assessment was issued in the present case.1

Counsel for the Provincial Tax Commissioner, Mr. Langille, contends that Mr. Weatherby was duly authorized and that, notwithstanding Weatherby's authorization, the tax payable was determined and assessed by the Provincial Tax Commissioner.

Mr. Langille called James B. Ramsay, Provincial Tax Commissioner, who testified that Omni's assessment was made by him and that Mr. Weatherby, in issuing the notice, was acting on his instructions. Mr. Langille argues, as well, that there is no requirement for a signature on the assessment notice and that the mere existence of a signature does not, in and of itself, indicate authority for the assessment.

The submissions of Mr. Langille on this issue indicate that authorization was given on November 22, 1988 by the then Minister of Finance, Gilbert Clements, to Fred Weatherby and Blair White to "issue and sign Assessment Notices"2. The authority was made pursuant to 1988 amendments made to Section 8 of the Revenue Tax Act, R.S.P.E.I. 1988, Cap. R-14. Sections 8(1) and 8(2) of the 1988 Act provided that:

8.(1) The commissioner or any officer appointed by the Minister may from time to time and at such intervals as he may consider reasonable, determine and assess and reassess any tax payable under this Act by any consumer and thereupon the tax so assessed or reassessed, for the purpose of sections 26 and 38 of this Act becomes due and payable by the consumer.

(2) The commissioner or any officer appointed by the Minister shall send a notice of assessment by registered mail to the consumer at his latest known address, and in the case of a consumer having more than one address, one of which is in the province, the notice may be sent to his address in the province.

In 1990, a new Revenue Administration Act was enacted. While it appears that the Messrs. White and Weatherby were not re-appointed pursuant to the 1990 Act and amendments thereto, it is argued that the authority conferred in 1988 remains valid pursuant to Section 33.(1)(a) of the Interpretation Act, which provides as follows:

every person acting under the former enactment shall continue to act as if appointed or elected under the new enactment until another is appointed or elected in his stead.

The evidence and argument presented on this issue satisfy us that Notice of Assessment No. 1019 was issued by a duly appointed officer. While we acknowledge Mr. Langille's argument that:

  1. the assessment was determined by the Provincial Tax Commissioner; and
  2. there is no requirement that assessment notices be signed;

we believe, in reading the legislation as a whole, that the legislature intended that assessment notices be signed by the Provincial Tax Commissioner or any properly authorized officer. In this case, we consider Mr. Weatherby to have been properly authorized to sign the required notice.

We find, therefore, that:

1. Notice of Assessment No. 1019 was signed by a duly appointed officer.

2.2 Did the Assessment Cover an Authorized Period

The evidence before us indicates that the Notice of Assessment covered a period in excess of 36 months. Section 38 of the Revenue Tax Act Regulations provides that:

In making an assessment pursuant to the Act, the Commissioner shall not consider a period prior to the four fiscal years immediately preceding the date of assessment unless there is a reasonable appearance to him of willful default or fraud.

There is nothing before us to suggest that the period covered in the Notice of Assessment is beyond the powers of the Provincial Tax Commissioner. In the result, we find that:

2. The period covered in Notice of Assessment 1019 is authorized under the Revenue Tax Act Regulations.

2.3 Was the Assessment Issued Prior to the Department Having Determined Actual Tax Liability

Counsel for the Appellant contends that the Notice of Assessment was issued prior to the determination of tax liability and that the notice is thereby invalid. Ms. Parkman referred the Commission to attachments to a letter dated April 20, 1995 to the Appellant from Garey Foley, Tax Administration Supervisor, Department of Provincial Treasury. The attachments contain entries dated subsequent to the date of the assessment notice. Ms. Parkman argues that tax liability was not transferred to the Appellant until April 20, 1995, and therefore the March 8, 1995 assessment is invalid.

Blair White, Manager of Tax Administration for the Department of Provincial Treasury, testified that the dates on the entries in question represented the dates these entries were keyed into the Department's computer systems and that they had nothing to do with the actual date of the tax assessment. During the hearing, a considerable amount of time was spent explaining the idiosyncrasies of the departmental data entry process. While certain figures on the above attachments remain unclear as to what they represent, it is clear to the Commission that the entries in question represent data entry dates only.

The Commission notes, as well, the oral evidence of Mr. Ramsay who testified that the decision on the tax liability of the Appellant was determined by him in conjunction with departmental officers prior to the assessment notice being issued.

For the above reasons, we find and conclude that:

3. the assessment notice was not issued prior to the Department having determined actual tax liability.

3. Disposition

An Order declaring Notice of Assessment No. 1019 to have been validly issued will therefore issue. The hearing on the question of whether the Provincial Tax Commissioner's decision to dismiss the objection on the grounds that the objector failed to file within the time limits prescribed by Section 9.(1) of the Revenue Administration Act was correct will continue on a date to be fixed.

Order

UPON hearing Catherine M. Parkman, counsel for the Appellant herein, and Roger B. Langille, Q.C., counsel for the Respondent Provincial Tax Commissioner on preliminary questions relating to the validity of Notice of Assessment No. 1019 issued on March 8, 1995;

AND UPON it appearing to the Commission that the said assessment is a valid assessment;

NOW THEREFORE, for the reasons given in the annexed Reasons for Order;

IT IS ORDERED AND DECLARED THAT

Department of Provincial Treasury Notice of Assessment No. 1019 issued by Fred Weatherby on March 8, 1995 was validly issued.

DATED at Charlottetown, Prince Edward Island, this 22nd day of February, 1996.

BY THE COMMISSION:

Linda Webber, Chair

Anne McPhee, Commissioner

Deborah MacLellan, Commissioner

NOTICE

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:

12. The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it or rehear any application before deciding it.

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.

Sections 13.(1) and 13(2) of the Act provide as follows:

13.(1) An appeal lies from a decision or order of the Commission to the Appeal Division of the Supreme Court upon a question of law or jurisdiction.

(2) The appeal shall be made by filing a notice of appeal in the Supreme Court within twenty days after the decision or order appealed from and the Civil Procedure Rules respecting appeals apply with the necessary changes.

1 Written Argument of Catherine M. Parkman, paragraphs 5 and 6.

2 Exhibit R-7.