INCOME TAX |
Practice |
Pacific Network Services Ltd. v. M.N.R.
T-28-02, T-31-02
2002 FCT 1158, Martineau J.
8/11/02
25 pp.
Judicial review requirement issued by Canada Customs and Revenue Agency officer, pursuant to Income Tax Act, s. 231.2 compelling Pacific Network Services Ltd. to provide information, corporate documents pertaining to nature of business, names, addresses of officers, shareholders, including percentage of interest of each shareholder--Other applicant, Leader Direct Marketing Ltd., received similar request on December 17, 2001--Both requirements issued for purposes of Convention between Canada and France for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and on capital (Tax Convention), art. 26--Applicants submitted MNR or authorized representative had no authority under either Tax Convention, art. 26 or Act, s. 231.2 to issue requirements--Main issue proper interpreta-tion of Tax Convention, art. 26--Method to follow in addressing questions of tax convention interpretation set out in Crown Forest Industries Ltd. v. Canada, [1995] 2 S.C.R. 802--In interpreting treaty, paramount goal to find meaning of words in question--Process involving looking to language used and intentions of parties--Plain words used in text of art. 26 meaning State faced with a request for information required not only to exchange information gathered, but also to obtain information by use of administrative measures such as requirements under Act, s. 231.2(1)--Broad interpretation concords with purposes and object of provision, also with general coverage of Tax Convention as well as with interpretation of model provision inspiring Tax Convention, art. 26--Requirements valid under Tax Convention, art. 26 as well as under Act, s. 231.2(1)--Applicants contended parts of requirements requiring applicants to divulge information pertaining to shareholders, officers invalid since no authorization obtained from judge pursuant to Act, s. 231.2(3) --Act, s. 231.2(3) not applicable in present case--First, requirements do not relate to unnamed persons but to applicants--Therefore, Act, s. 231.2(3) cannot oblige Minister to obtain judge's authorization information sought of purely corporate nature, relating to names, addresses of shareholder and officers--Second, authorization mentioned in Act, s. 231.2(3) applying to requirement issued for purpose related to administration or enforcement of Act--In present case, information relating to unnamed persons cannot, will not be used by Minister under Act, but instead simply transmitted to competent authorities of France pursuant to request made under art. 26--Third, concerns behind necessity to obtain authorization of judge under Act, s. 231.2(3) relating to gathering of information and documents without revealing person's tax liability under scrutiny--However, in present case, no taxpayers named in requirement at issue; Minister conceded neither applicants nor any of customers concerned with tax liability investigation--Certainly, above concerns do not exist in present case; no proof regarding Minister seeking information relating to tax returns or liability of unidentified Canadian taxpayers--Application dismissed--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 231.2(1), (2), (3)-- Convention between Canada and France for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, art. 26.