In objections of the taxpayer to reassessments of three of its taxation years to reflect upward transfer pricing adjustments under s. 247(2), it included requested downward adjustments pursuant to s. 247(10). The Minister then vacated the reassessments, but with the requested downward adjustments being refused. The taxpayer filed this appeal to the Tax Court from such further reassessments, and also timely filed in the Federal Court for judicial review of such refusal. However, before MacPhee J the taxpayer effectively indicated that its Federal Court action was futile, i.e. if, in response to an order of the Federal Court, the Minister determined that a downward adjustment was appropriate under s. 247(10), the Minister would not be able to reassess the taxpayer for the years under appeal to the Tax Court if that appeal was dismissed.
MacPhee J followed Dow Chemical in finding (at para. 15) that the “Tax Court has no jurisdiction to interfere in any way with the Minister’s discretion in disallowing a downward adjustment”. He also indicated that he lacked jurisdiction (having regard to the scope of s. 171(1)(b)(iii)) to even provide an opinion that the requested downward adjustment accorded with a proper s. 247(2) analysis (and that such request amounted to “seeking to obtain and use a judgment of the Tax Court as a collateral attack on the absolute discretion of the Minister under 247(10)” (para. 23). The appeal of the taxpayer was quashed.