832866 Ontario Inc. v. The Queen, 2014 TCC 93 (Informal Procedure) -- summary under Paragraph 298(4)(a)

By services, 28 November, 2015

The appellant, a small custom-home builder, was held equally by a married couple (the DeMarcos). In 2006, the couple sold their home and moved into the appellant's model home. This change in use triggered an obligation of the appellant to pay GST on the fair market value of the home under the ETA s. 191 self-supply rule.

Rip CJ allowed the Minister's reassessment beyond the normal limitations period, finding that the appellant had been neglectful in its failure to report this transaction in its GST return. The appellant argued that it was unreasonable to expect the DeMarcos to spot the self-supply issue.

Rip CJ pointed out that the appellant did not ask its chartered accountant for guidance (paras. 21, 40) and instead relied on a bookkeeper who was unfamiliar with tax matters (paras. 25, 40), and stated (para. 41):

The fact that the move by the family into the model home was a transaction the DeMarcos and the appellant had never experienced before in the over the 20 years existence of the company ... did not disturb [Mrs. DeMarco] sufficiently to ask questions.

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failure to query GST treatment of self-supply
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