As a tax lawyer assisting clients in defending themselves against the all-powerful CRA (and its equally powerful ally, the Department of Justice – Canada’s largest and best-equipped law firm), I welcome any judicial decisions that help to right that power imbalance.
Justice Patrick Boyle’s recent decision in Frigorific Warehouse is an exceptional attempt at addressing an inherent problem with Canada’s GST/HST system, which lacks proper mechanisms to deal with tax rogues who gain access to the CRA’s registration system to charge, collect and abscond with GST/HST funds from unsuspecting Canadian businesses. The CRA’s traditional position has been to attempt to recover the lost GST/HST from these unsuspecting businesses (by denying them input tax credits – “ITCs”). Justice Boyle’s decision seems to put that ability into serious question!