APPEAL by the defendant from the judgment of the Exchequer Court of Canada, Maclean J., President of the Court ante p. 322, holding the appellant liable for a balance of sales tax on rice and bags sold between the month of October, 1933 and the month of August, 1936, with penalties and interest, totalling $12,320.12.
The defendant, a manufacturer of rice and bags, sold its entire output during the period in question herein to the Canada Rice Sales Company, a partnership, the members of which were with one exception only, shareholders in defendant company, and in that instance, the partner represented a limited company which was a shareholder in defendant company. The partnership purchased from defendant at a price lower than the current wholesale price, and sold at the current wholesale price. The partners divided any profits accruing to the partnership in the proportion of their holdings in defendant company. The defendant was assessed for sales tax upon the selling price of The Canada Rice Sales Company. The Exchequer Court of Canada held that the Canada Rice Sales Company was not an independent trading unit or business enterprise and that the defendant was liable for the sales tax and penalty assessed on the selling price of The Canada Rice Sales Company.
On the appeal to the Supreme Court of Canada, after hearing argument for the appellant, and without calling on counsel for the respondent, the Court delivered judgment orally, dismissing the appeal with costs. The Chief Justice, speaking for the Court, said:
"‘It will not be necessary to call upon you, Mr. Varcoe.’’