The Crown brought this motion to delete from the Notice of Appeal facts and reasons pleading “the Minister of National Revenue’s motivation and predominant purpose in issuing the requirements and obtaining from the banks the appellant’s bank records, and documents and information derivative of such records, used to issue the reassessments”. The Notice of Appeal also challenged the way the CRA applied the net worth method. The CRA attacked those parts too.
The Court agreed and struck those parts of the Notice of Appeal.
[27] Even where CRA conduct leading up to an assessment is reprehensible, this Court does not have jurisdiction. As stated by Stratas J.A. in J.P. Morgan:
[83] The Tax Court does not have jurisdiction on an appeal to set aside an assessment on the basis of reprehensible conduct by the Minister leading up to the assessment, such as abuse of power or unfairness[…] If an assessment is correct on the facts and the law, the taxpayer is liable for the tax.[13]
[29] In Johnson v Canada (Minister of National Revenue – MNR), 2015 FCA 52, [2015] FCJ No. 216 (FCA), Webb J.A. indicated that “The motivation of the Minister or delay in issuing such assessments are not relevant to” the determination of the validity and correctness of an assessment.[14]
[30] It is plain and obvious that the matters pled and the arguments to be advanced at trial relating to CRA conduct and other elements would have no reasonable possibility of success at trial.