GRANT, J.:—This is an appeal by way of stated case pursuant to Section 734 of the Criminal Code of Canada, whereby G. G. Marshman, Q.C., Police Magistrate at London on March 31, 1966, convicted the appellant, Empire House (London) Limited for that it did between May 1, 1965 and October 25, 1965 fail to comply with a notice of the Minister of National Revenue dated April 29, 1965, requiring the said corporation to keep certain books and records pursuant to Section 125(2) of the Income Tax Act, and did thereby commit an offence under Section 131(2) of the said Act.
The accused is a corporation carrying on business as a public house and sells beer, cigarettes and food in its beverage room. Therein it maintains a cash register from which at the end of the day a total of sales made is taken. The cash register is so equipped that by the installation in it of a tape a complete record showing every sale which has been made can be recorded. Section 125 of the said Act is as follows:
“125. (1) Every person carrying on business and every person who is required, by or pursuant to this Act, to pay or collect taxes or other amounts shall keep records and books of account (including an annual inventory kept in prescribed manner) at his place of business or residence in Canada or at such other place as may be designated by the Minister, in such form and containing such information as will enable the taxes payable under this Act or the taxes or other amounts that should have been deducted, withheld or collected to be determined.
(2) Where a person has failed to keep adequate records and books of account for the purposes of this Act, the Minister may require him to keep such records and books of account as he may specify and that person shall thereafter keep records and books of account as so required.
(3) . . .”?
Section 131(2) of such Act is as follows:
“Every person who has failed to comply with or contravened subsection (1) of section 47, subsection (5) of section 123, section 125 or section 126 is guilty of an offence and, in addition to any penalty otherwise provided is liable on summary conviction .. .’’
On April 29, 1965, the Minister under such Act for the Department of National Revenue, wrote the appellant corporation stating that as a result of reports received from his representatives that he was of the opinion that the company’s records were inadequate for purposes of the Income Tax Act, and that as a consequence it was contravening Section 125 of such Act and that under the authority of subsection (2) of such section that it was required to keep in addition to the books and records then maintained, complete cash register tapes, dated and filed in date order. The appellant refused to install and maintain such tapes and kept only the printed totals of the sales with their daily record of sales.
Section 125(1) simply requires persons to whom the section applies to keep records and books of account in such form and with such information as will enable the taxes payable under this Act or the tax or other amounts that should have been deducted, withheld or collected to be determined. The right of the Minister under subsection (2) thereof to require a person to keep such records and books of account as he may specify is by the wording thereof dependent upon the prerequisite that such person has failed to keep adequate records and books of account for the purposes of the Act. This appeal may be disposed of on the following two grounds. The witnesses on behalf of the Crown indicated that the information which was available to them was not insufficient for them to determine the tax payable and the most which the witness Bagnall would say was that the sales record would be evidence of sales to assist the department, and further, the following words, ‘‘we feel there is no supporting evidence for the recording of sales’’. None of the witnesses called on behalf of the Crown indicated that from the information available to them they were unable to determine the tax liability. The Magistrate in his reasons for Judgment made the following distinct finding of fact:
“I find that the accused corporation kept adequate records and books of account which would enable a chartered accountant, and which in this case enabled the accountants of the company to present information to the department from which the tax liability of the company could be determined.”
Having made a finding, based on the evidence of the Crown witnesses, that would deprive the Minister of jurisdiction to require the taxpayer to keep such records or books of account as he might specify, the accused could not then be convicted of failing to comply with such notice made without authority. The first question should be answered that on the basis of the facts set out in the case stated the Magistrate was in error in convicting the accused. The second question is not relevant to the matters in issue. There will therefore be judgment setting aside the conviction and directing a verdict of acquittal to be recorded. There will be no order as to costs.