Canada v. National Bank of Canada
T-2520-88
Nadon J.
26/10/94
20 pp.
In financing business operations, defendant bank obtaining security of book debts and security pursuant to Bank Act, s. 178-Bank appointing receiver to sell debtor's inventory-Minister making demand for tax on assigned accounts (the "demand") to Bank in respect of sales, and particularly the Federal Sales Tax ("FST") imposed upon sales pursuant to Excise Tax Act, s. 52(10)-Bank refusing to remit tax on ground demand not opposable to holder of s. 178 security-Canadian Imperial Bank of Commerce v. R., [1984] C.T.C. 442 (F.C.T.D.), holding s. 178 security not granting Bank assignment of specific tax on sale price of goods sold, applied-In distinguishing effect of specific tax such as FST and income tax on holder of s. 178 security, CIBC v. R. holding sales tax on price not yet paid to taxpayer may be lawfully intercepted by Crown in face of s. 178 security-Bank's debtor could not, either by way of assignment of book debts or by way of s. 178 security assign or give to Bank FST imposed on sale price of goods sold to customers-In collecting debtor's customers' outstanding accounts, Bank obtained FST representing monies which never belonged to debtor-Bank not entitled to FST where Minister diligently exercising s. 52(10) statutory right-Clear intention of Parliament with respect to s. 52(10) to catch all assignments of book debts, either by way of general assignment of book debts or by way of s. 178 security-Action allowed-Bank Act, S.C. 1991, c. 46, s. 178-Excise Tax Act, R.S.C., 1985, c. E-15, s. 52(10).