The taxpayer participated in a software licence donation arrangement under a registered tax shelter ("GLGI"), in which the taxpayer would acquire software licences at a bulk rate and donate them in order to get charitable receipts reflecting the alleged non-bulk value of the software.
By November 2012, the Minister had not processed the taxpayer's 2010 return, which allegedly was being held until an audit could be conducted on GLGI. The taxpayer applied to obtain mandamus to compel the examination of the return.
Phelan J allowed the taxpayer's application. The evidence established that the purpose of the new policy was to have a chilling effect on participation in charitable donation schemes. This breached the Minister's obligation to process the taxpayer's return with all due dispatch. He stated (at paras. 27, 33):
The method by which the Winnipeg Tax Centre thought it could achieve this purpose was to rely on the need for an audit to give legitimacy to the delay which they intended to use to discourage participation. However, it is apparent from the Record that the Centre had already determined that the donations claimed were not legitimate. ...
To the extent that there may have been some basis for awaiting the audit, the decision to audit is so tainted by the real reason for the New Policy that the audit is an excuse for delay not a reason for delay.