Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Ontario Vendors and Purchasers Assessed Ontario Retail Sales Tax May Judicially Review Collections Actions Taken Without Authority

I enjoy the academic exercise of reviewing statutory provisions. Some may say that I should find a better hobby. They are probably correct.

However, I have noticed something that is interesting and may be helpful to persons in Ontario who have been assessed retail sales tax.

Subsection 23(1) of the Retail Sales Tax Act (Ontario) provides as follows:

Any tax payable or required to be remitted under [the Retail Sales Tax Act] by any taxpayer is, upon registration by the Minister in the proper land registry office of a notice claiming a lien and charge conferred by this section, an lien and charge on any interest of the taxpayer liable to pay or remit the tax has in the real property described in the notice."

Subsection 23(2) of the Retail Sales Tax Act (Ontario) provides as follows:

Any tax payable or required to be remitted under [the Retail Sales Tax Act] by any taxpayer is, upon registration by the Minister under the Personal Property Security Act of a notice claiming a lien and charge conferred by this section, an lien and charge on any interest in personal property in Ontario owned or held at the time of registration or acquired afterwards by the taxpayer liable to pay or remit the tax."

A few things are noticeable:

  • The provisions includes the word" tax" and DOES NOT the words "interest" and "penalties".
  • The provision uses the word "taxpayer" and, under the Retail Sales Tax Act as vendor is not a taxpayer
  • Vendors who fail to collect tax are assessed a penalty and not tax

As a result, if a lien is filed against "vendor" or if it includes any interest or penalties (including penalties for failure to collect tax from purchasers), an argument may be made that the Minister does not have statutory authority to issue the lien or the Minister's lien includes additional sums. The Minister is only entitled to take actions that he or she is empowered to take by statute.

The appropriate legal action to take would be to file a judicial review under the Judicial Review Proceedings Act and Rule 68 of the Rules of Civil Procedure. There are time lines for filing a judicial review. As a result, an affected person should contact a lawyer as quickly as possible so that the Notice of Application for Judicial Review in filed with the Divisional Court.

If you require more information, please contact Cyndee Todgham Cherniak at 416-307-4168

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