W.R. McRae Co. v. Canada
T-1595-93
Noël J.
22/4/94
24 pp.
Appeal by way of action seeking to vacate notice of determination whereby claim for refund of federal sales tax paid on goods sold to retail customers, disallowed -- Plaintiff, licensed manufacturer pursuant to Excise Tax Act, s. 2(1)(i) -- Goods underlying claim imported goods purchased by plaintiff in one instance from importer, and in other, from person other than importer; no production or manufacturing activity took place in Canada -- Plaintiff arguing paid federal sales tax in error at time of sale to retail customers, and entitled to refund of taxes -- Whether plaintiff entitled to refund of federal sales tax; whether plaintiff "producer or manufacturer" of said goods within meaning of Act, s. 50(1)(a) at time goods sold -- If plaintiff producer or manufacturer, tax properly payable and no refund exigible -- Whether s. 2(1)(i) and 2(3) have effect of deeming plaintiff to have been producer or manufacturer of goods in issue so as to make it liable to tax on sale to retailers -- Deeming provision of Act, s. 2(1) deeming person importing goods to be person manufacturing these goods and not importer; (2) attaching to goods themselves irrespective of whose hands they are in -- Tax imposed by s. 50(1)(a) not personal tax levied on manufacturer, but tax levied on goods and imported goods could not be transformed into manufactured goods only because importer of goods deemed to be manufacturer: Caloil Inc. v. The Queen, [1972] F.C. 1217 (T.D.) -- Regulation-making power embodied in s. 54(2) not restricted to persons manufacturing or producing goods, but also extending to persons deemed by Act to do so -- S. 2(3) has effect of deeming Schedule III.1 goods sold by plaintiff to be goods manufactured and produced in Canada and not imported goods -- Deeming provisions cannot be construed in isolation; must be interpreted in light of scheme and purpose of legislation -- S. 2(1)(i) operating with respect to person actually selling Schedule III.1 goods, and not to person merely seller of such goods -- Action dismissed -- Excise Tax Act, R.S.C., 1985, c. E-15, ss. 2(1)(i) (as am. by R.S.C., 1985 (4th Supp.), c. 12, s. 1), (3), 50(1)(a), 54(2).