CUSTOMS AND EXCISE |
Customs Tariff |
Société des Alcools du Québec v. Canada
A-571-00
2002 FCA 69, Noël J.A.
22/2/02
29 pp.
Appeal from Trial Division decision ([2001] 1 F.C. 386) finding Federal Sales Tax Inventory Rebate Regulations, s. 3(h) ultra vires powers conferred on Minister of Finance by Act to amend the Excise Tax Act, s. 120--Case resulting from elimination of former federal sales tax and introduction, starting on January 1, 1991, of goods and services tax--Parliament authorized rebate of sales tax paid on new products in inventory on January 1, 1991, based on factors prescribed by regulation, as transitional measure--Appellant contending Trial Judge erred in law when concluded enabling Act intended to allow registrants to recover all tax paid on goods in inventory as of January 1, 1991--Whether Regulations, s. 3(h) ultra vires--Regulatory power conferred by legislation in question very broad--Power must be interpreted having regard to purpose of Act and purpose of particular provision granting power--Undisputed purpose of Act to avoid double taxation of goods in inventory by rebating tax paid under former Act--Minister of Finance could not relegate treatment of alcoholic beverages to general factor without exceeding power granted by enabling Act and falling into arbitrary action--General factor designed on basis of 13.5 percent tax rate, when tax levied on alcoholic beverages 19 percent--Regulations, s. 3(h) ultra vires in so far as applies to alcoholic beverages--S. 3(h) consistent with purpose of Act in relation to virtually all goods to which section applies--However, section ultra vires in application to alcoholic beverages because, in case of those products, effect runs counter to both objective of Parliament and purpose of Act--Court must sever Regulations, s. 3(h) and declare it to be ultra vires only in so far as applies to alcoholic beverages--In establishing specific factor for alcoholic beverages, Minister of Finance would have had regard to rate of tax applied to those goods under former Act and to uniform method by which those goods marketed--Trial Judge justified in declaring respondent entitled to receive rebate claimed, despite regulatory vacuum resulting from declaration of invalidity--Matter of settled administrative law regulations may not be necessary if legislative intent clear and unequivocal--Appeal dismissed--Federal Sales Tax Inventory Rebate Regulations, SOR/91-52, s. 3--Excise Tax Act, R.S.C., 1985, c. E-15, s. 120 (as enacted by S.C. 1990, c. 45, s. 12).