October 07, 2011

Newfoundland Minerals Limited (Appellant) v. Minister of National Revenue (Respondent)

69 DTC 5432
Exchequer Court of Canada
September 29, 1969

Appeals — Jurisdiction of Appeal Board and Exchequer Court — Right to appeal when Minister vacates assessment in reply to notice of objection — Nil assessment — Income Tax Act, R.S.C. 1952, ss. 58(3), 59(1) and 60(2).

On appeal to the Appeal Board (69 DTC 331) against its assessment for 1963, the appellant company argued that certain profits from its new mine were exempt from tax under the provisions of section 83(5), the question of the Board’s jurisdiction to hear the appeal not having been raised. When the Board dismissed its appeal, the company filed a notice of appeal (and an amended notice of appeal) to the Exchequer Court. A Practice Note prepared by D. G. H. Bowman of the Department of Justice states that, at the hearing before the Exchequer Court (Gibson, J.), the Minister moved to have the notices of appeal struck out for lack of jurisdiction. According to the note, the sequence of events was as follows. In December 1965 the appellant filed a notice of objection to its assessment for 1963 in which it objected to the inclusion in income of the amount it claimed was exempt under section 83(5), claimed additional capital cost allowance, and claimed additional exploration and development expenses. The Minister allowed the additional exploration and development expenses but did not accept the appellant’s position with respect to the section 83(5) exemption. In accordance with a request made by the appellant in its notice of objection, he therefore revised the appellant’s capital cost allowance so as to reduce its taxable income for 1963 to nil. In September 1966 the Minister replied to the notice of objection (under section 58(3)) by notifying the appellant of the action he had taken. In support of his motion for striking out the notices of appeal to the Exchequer Court, the Minister submitted that neither the Appeal Board nor the Exchequer Court had jurisdiction to hear an appeal from a notification that no tax was payable, and that the Minister had neither reassessed nor confirmed the assessment for 1963 but had, pursuant to section 58(3), vacated the assessment.

Held: The Minister’s motion was granted. The notices of appeal were ordered to be struck out. There was no right of appeal because the notice of the Minister of September 1966 was a notice of his vacation of his 1963 assessment of the appellant for tax.