The Supreme Court released its decision today in The Queen v. Addison & Leyen Ltd., 2007 SCC 33. The case considers whether the CRA really can assess a taxpayer “at any time” under section 160 of the Income Tax Act.
The Federal Court of Appeal had held that judicial review was available for a set of very tardy assessments under section 160 even though the section permits the CRA to assess “at any time”. The CRA had issued the 160 assessments in question in 2001; they related to the 1989 taxation year!
The Supreme Court allowed the Crown’s appeal and overturned the FCA decision. The headnote summarizes the Court’s decision:
On the facts of this case, judicial review was not available because the Minister can reassess at any time as s. 160 of the Income Tax Act contains no limitation period. This does not mean that the exercise of this discretion is never reviewable, but the length of the delay before a decision whether or not to assess is not enough to ground judicial review. The length of delay might, however, ground a remedy like mandamus to prod the Minister to act with due diligence. Furthermore, the allegations of fact here did not show that the regular appeal process could not have dealt with the tax liability issues.
Mandamus, of course, will be useless to a taxpayer who has no idea that the CRA is contemplating an assessment under section 160. And a taxpayer’s ability to challenge an assessment will be severely compromised if it relates to a taxation year that is more than a decade in the past.
