Not open to registrant to question legality of assessment as time limit for objecting had expired

Registrant supplied digital music to servers on cable companies’ premises in multiple provinces. Location of supply of digital music services was provinces where servers were located. Tax auditor determined that client’s servers were located in Ontario and assessed registrant for failure to remit provincial portion of Harmonized Sales Tax (HST) as required for servers located in Ontario. Registrant paid unremitted HST but was not repaid by client because its servers were in Alberta. Registrant learned after expiration of objection limitation period that it had provided incorrect information regarding location of client’s servers during audit. Minister of National Revenue decided not to recommend remission of HST pursuant to s. 23(2) of Financial Administration Act. Minister found that no factor in Remission Guide applied and concluded that remission could not be recommended based solely on honest error by registrant. Registrant brought application for judicial review. Application dismissed. Minister provided cogent reasons for decision and took into account all facts and circumstances identified by registrant. It was not open to registrant to question legality of assessment as time limit for objecting had expired. Minister mischaracterized registrant’s submission that Minister’s failure to correct situation led to result not intended by legislation. However, over-remittance was consequence of registrant’s failure to provide correct information during audit, and not due to unintended effect of legislation. Registrant did not act with due dispatch to correct error. Decision fell within range of possible, acceptable outcomes.

Pay Audio Services Limited Partnership v. Canada (National Revenue) (2018), 2018 CarswellNat 2214, 2018 CarswellNat 2850, 2018 FC 494, 2018 CF 494, Roger R. Lafrenière J. (F.C.).