Molson Newfoundland Brewery Ltd. v. Canada
T-1475-91
Rothstein J.
22/7/93
15 pp.
Appeal from disallowance of plaintiff's claim for refund of federal sales tax paid in respect of beer given away as samples between January 31, 1983 and January 31, 1987 -- Free distribution of beer samples accepted practice in brewering industry -- Cost of producing sample beer included in taxable base of beer for sale and on which sales tax paid -- Plaintiff arguing double taxation if sample beer itself taxed because cost of sample beer included in taxable base for beer sold -- Submitting (1) Excise Tax Act not intended to impose federal sales tax on beer given away by breweries as samples; (2) The King v. Wampole (Henry K.) & Co. Ltd., [1931] S.C.R. 494, applies -- Defendant agreeing double taxation, but authorized by Excise Tax Act, s. 50(1)(a)(iii), providing for sales tax on all goods produced or manufactured in Canada payable, where goods are for use by producer or manufacturer, when goods appropriated for use -- Definition of "sale price" contemplating sale from manufacturer or producer to purchaser -- S. 52(1)(d) providing goods for use by manufacturer or producer shall, for purposes of Act, be regarded as sales and federal sales tax therefore payable -- Appeal allowed -- S. 50(1)(a) not significant -- Enacted solely to establish time when tax payable by producer or manufacturer who used own goods -- Not substantively affecting liability for tax, already provided for in s. 52(1)(d) -- In Wampole, S.C.C. holding where cost of samples included in cost of products sold in respect of which sales tax imposed, double taxation would result if samples also taxed -- In such circumstances, s. 87(d) (later s. 52(1)(d)) not to be interpreted so as to impose double taxation -- As facts, legislation herein same as in Wampole, except as to nature of samples, Wampole followed -- Accounting and marketing practices of plaintiff indistinguishable from those in Wampole -- Legislation not imposing double taxation in case of identical goods -- Legislative history further supporting conclusion samples, in circumstances similar to those in Wampole, not subject to sales tax -- Immediately after Wampole decision, Parliament enacted s. 87(2) to expressly tax samples, but repealed subsection shortly thereafter with express intention samples would not be subject to tax -- Parliament intending law, as established by Wampole to subsist -- Excise Tax Act, R.S.C., 1985, c. E-15, ss. 42, 50(1)(a)(iii), 52(1)(d), 81.2 (as enacted by R.S.C., 1985 (2nd Supp.), c. 7, s. 38; as am. by R.S.C., 1985 (4th Supp.), c. 47, s. 52), 81.28 (as enacted idem; as am. idem) -- Special War Revenue Act, R.S.C. 1927, c. 179, s. 87(d),(2) (as enacted by S.C. 1931, c. 54, s. 12; rep. by S.C. 1935, c. 33) -- Federal Court Act, R.S.C., 1985, c. F-7, s. 48.