This was an application to the Court for an extension of time because CRA had refused one, for this GST objection. Under ETA s. 303 (7), you can get an extension of time to file your Notice of Objection if you can show that (b) either (i) (A) you couldn’t file your objection within the 90 days, or (B) you had a bona fide intention to file your objection within the 90 days.
Judge Masse accepted that Patterson could not file its objection on time because “it was not possessed of the knowledge necessary to enable it to make an intelligent and informed decision whether or not to challenge the assessment.” The missing knowledge was a favourable Tax Court decision and an expert opinion that “epinephrine was an essential ingredient of its anaesthetic solutions.” (Paras. 26 and 27.)
This view seems a bit generous to GST registrants (or taxpayers under ITA s. 166.1(7)). But judge Masse justified his decision also by noting:
 ... a) The Applicant was at all times completely transparent with the CRA during the audit process;
b) The Applicant has demonstrated a history of willingness to voluntarily comply with its tax obligations;
c) Since the assessment has already been paid in full, the CRA will not suffer any prejudice as a result of the extension of time;
f) A full debate on the merits will clarify the state of the law;
g) The total amount of GST and provincial sales taxes at stake are significant and amount to more than 1.6 million dollars including interest and penalties. The Applicant should not be deprived of this significant amount of money nor should CRA be enriched by this amount if in fact the assessment is based upon erroneous principles of law; and
 ..., it is to be noted that if there is any doubt, the Court should find in favor of the means of safeguarding the rights of the parties: … The rights of the parties can only be safeguarded if we allow a full debate on the merits to take place."
Also supporting his decision was the fact that “The Notice of Objection must set out the reasons for the objection and all relevant facts in support of the objection. Consequently in order to prepare a Notice of Objection the Applicant must be possessed not only of the intention to file a Notice of Objection, but also should put forth cogent reasons in support of its challenge to the Assessment.” (Para. 35.)
Finally, Judge Masse noted that the Quebec Superior Court had already come to the same conclusion for the Quebec sales tax. So both the rule against abuse of process and the principle of judicial comity meant that the Tax Court should agree with that conclusion. (Paras. 40-45.)
The Quebec Superior Court had said that not to allow the late objection would “signify that the Agency could demand of a taxpayer that it have a better knowledge of the applicable tax rules [than the Agency]. It’s understood a taxpayer cannot plead ignorance of the law. In this case, it was the taxpayer who put the Agency on track. One cannot therefore reproach the applicant for its failure to act.” (Para. 40 citing QSC at para. 40; my translation.)
Although this decision seems just, you might wonder why a taxpayer in a case like this couldn’t also argue that it had a “bona fide intention to act” within the 90 days, since surely it would have acted within the 90 days if it had known about the tax case. Both ways of allowing the extension seem to stretch the wording about the same amount.
See Patterson Dental Canada Inc. v. The Queen, (2014 TCC R. Masse DJ)