Canada v. Tom Baird & Associates Ltd.
T-2869-92
McKeown J.
8/10/96
14 pp.
Appeals from decision of Canadian International Trade Tribunal (CITT) allowing appeal from notices of determination of MNR-CITT held "imaged articles at issue" to be used in advertising exempt from federal sales tax under Excise Tax Act, s. 29(1) and Schedule III, Part XIII, s. 4-Material time April 1984 to May 1985 and May 1986 to April 1988-Issue correct interpretation of s. 4: whether imaged articles at issue "made or imported by or sold to a manufacturer or producer for use exclusively in the manufacture or production of printed matter"-Suppliers engaged by defendant, advertising agency, manufactured imaged articles using designs, art work or film, and instructions, provided to them by defendant-Imaged articles sold by various suppliers to defendant on federal sales tax exempt basis pursuant to certificates of exemption provided by defendant to them-Defendant turned over imaged articles without charge to printers who used them to manufacture both printed matter subject to federal sales tax (taxable printed matter) and printed matter exempt of federal sales tax-Appeal confined to imaged articles used to manufacture only taxable printed matter-Taxable printed matter manufactured by printers from imaged articles at issue then sold to defendant by printers, who remitted federal sales tax on sale price to defendant of taxable printed matter so sold-Sale price of printed matter did not include amount on account of cost component of imaged articles at issue-Defendant then resold taxable printed matter to its clients and remitted no federal sales tax in respect of sale-Imaged articles at issue also sold by defendant to clients-Upon sale of imaged articles at issue to clients, defendant remitted amount identified as federal sales tax, calculated on amount charged to clients for imaged articles at issue-Portion of amount remitted by defendant as federal sales tax attributable to difference between amount defendant invoiced its clients for said articles at issue and cost to defendant of imaged articles at issue subsequently subject of refund claims by defendant to MNR and refunded to defendant-Defendant now seeking refund of remaining portion of federal sales tax remitted in respect of imaged articles at issue, calculated on cost of imaged articles to defendant, apparently on basis imaged articles used exclusively in manufacture of taxable printed matter tax exempt without further qualification-Appeal dismissed-Part of refund claims barred-Provision for current version of s. 4 always discrete section of Schedule and always worded differently from provision for production equipment-Plain meaning of s. 4 as stated by defendant whereas effect of submissions of plaintiff that Court should engage in legislative amendments by addition of words "by him" following words "for use" in s. 4-Meaning of s. 4 cannot be determined in isolation: Lord Herschell in Colquhoun v. Brooks (1889), 14 A.C. 493 (H.L.), at p. 506-Absence of restrictive words such as "by him" or "for his own use" in s. 4 demonstrating in unequivocal manner Parliament intended s. 4 to have broad interpretation-That courts not permitted to read words into legislation basic principle of statutory interpretation-In Schedule III, words "by him" or "for his own use", found in other sections, not found in s. 4-No disharmony with remainder of Act or with object and spirit thereof-S. 4 clear and requiring no further interpretation-As federal sales tax single incidence tax payable at time of first sale, or at time of importation, of taxable goods, subsequent resale by defendant to customers irrelevant-"Use" in context of Schedule III physical use-Therefore, imaged articles at issue "made by . . . or sold to manufacturer . . . for use exclusively in the manufacture . . . of printed matter"-Excsie Tax Act, R.S.C., 1985, c. E-15, s. 51(1), Schedule III, Part XIII, s. 4.