A family ("the Daruwalas") claimed a rebate of GST that had been charged to them on their purchase of a home, which the Minister denied based on a finding that the residence did not qualify as used residential accommodation. The taxpayer appealed on the ground that the builder ("TRG") had previously allowed an undisclosed third party to occupy the residence. The Minister brought an application under s. 311 of the Excise Tax Act to have the Daruwalas' and TRG's GST liability decided as a common question. The Minister had not proposed to reassess TRG.
Bocock J dismissed the Minister's application. Based on the similarities between s. 311 of the Excise Tax Act and s. 174 of the Income Tax Act, he stated (at paras. 11-12):
From Brenneur [a s. 174 decision], the following questions may be posed in respect of the factual record;
1. Has the Applicant provided the Court with evidence of independent communication by the taxing authority to the proposed assessee or some other reasonable indication that it may reassess the proposed assessee?;
2. What evidence has been submitted of an actual or proposed investigation, review or survey of the proposed assessee's affairs, history or file in the context or in pursuance of a proposed reassessment?; or
3. What submissions have been made regarding the expected efficiencies to be gained from joining a proposed and actual assessment into a single question for the Court to determine prior to the otherwise pending hearing of the single appeal?
Factually, in respect of the proposed assessee, TRG, the Applicant has:
1. provided no representations or evidence of any direct communication to TRG of any possible reassessment or any grounds or basis for same;
2. disclosed no results, facts or conclusions arising from any conduct of a review of TRG's files in order for the Minister to assess the likelihood of any proposed reassessment; and
3. disclosed no reasonable, tangible or theoretical efficiencies to be gained from the prior determination of the question, rather than simply proceeding with the otherwise pending hearing of the single appeal.