McMillen Holdings Ltd. v. MNR, 87 DTC 585, [1987] 2 CTC 2327 (TCC)

Rip, T.C.J.:—McMillen Holdings Limited ("McMillen"), the appellant, appeals from a reassessment by the Minister of National Revenue, the respondent, wherein tax in the sum of $64,302.55 was levied in respect of income for the taxation year ending January 31, 1982. McMillen does not object to the levy of tax. However the appellant appeals to the Court to vary the reassessment to provide for the payment of interest by the respondent to the appellant.

The hearing before the Court proceeded by way of the following agreed statement of facts:

1. The Appellant, McMillen Holdings Limited ("McMillen"), is a Canadian-controlled private corporation within the meaning of the Income Tax Act (the "Act") formed by amalgamation under the laws of the Province of Ontario on December 19, 1981.

2. In its taxation year ending January 31, 1982, McMillen paid taxable dividends in the amount of $2,596,448.00 entitling it to a refund of $649,112.00 pursuant to subsection 129(1) of the Act.

3. At July 31, 1982 McMillen had not made any payments to Minister of National Revenue on account of its income tax liability for its 1982 taxation year.

4. McMillen, in its return for the 1982 taxation year filed on or about July 31, 1982, applied to the Minister of National Revenue for the payment of such refund net of federal tax payable for the year (the "Refund Amount”).

5. The Refund Amount of $584,809.00 was paid to McMillen on or about August 22, 1983, without interest.

6. Pursuant to a reassessment dated December 19, 1983, the Minister of National Revenue confirmed that the dividend refund of McMillen for its 1982 taxation year was $649,112.00.

McMillen says that interest pursuant to subsection 164(3) of the Income Tax Act ("Act") was payable by the Minister “in respect of an amount equal to the Refund Amount for the period July 31, 1982” and ending when paid. The appellant states that an amount equal to the Refund Amount represented an "overpayment" for its 1982 taxation year within the meaning of subsections 164(2) and 164(7) of the Act as either:

(i) an overpayment of Part IV tax as at the end of such taxation year; or

(ii) an application of such amount by the Minister on or about July 31, 1982, to a liability under the Act of McMillen in respect of such taxation year pursuant to either subsection 129(2) or 164(2) of the Act, which liability was determined on or about August 22, 1983, not to be owing by McMillen.

In respect to interest paid or applied prior to April 20, 1983, subsection 164(3) provided that:

164 (3) Where an amount in respect of an overpayment is refunded, or applied under this section on other liability, interest at a prescribed rate per annum shall be paid or applied thereon for the period commencing with the latest of

(a) the day when the overpayment arose,

(b) the day on or before which the return of the income in respect of which the tax was paid was required to be filed, and

and ending with the day of refunding or application aforesaid, unless the amount of the interest so calculated is less than $1, in which event no interest shall be paid or applied under this subsection.

In section 164, for the 1982 taxation year, "overpayment" meant:

. I. . the aggregate of all amounts paid on account of tax minus all amounts payable under this Act or an amount so paid where no amount is so payable. (subsection 164(7))

Section 129 provides, amongst other things, for payment of a refund by the Minister to a private corporation of an amount equal to the lesser of one-quarter of all taxable dividends paid by the corporation in the year and its refundable dividend tax on hand, as defined, at the end of the year. Subsection 129(2) states that:

Instead of making a refund that might otherwise be made under subsection (1), the Minister may, where the corporation is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refundable to that other liability and notify the corporation of that action.

Interest on Dividend Refund

(a) "Overpayment" of Taxes

Counsel for the appellant submits that where, pursuant to subsection 129(1), the Minister makes a refund to a corporation taxpayer for its 1982 taxation year the amount refunded is on account of tax that has been overpaid by the taxpayer under Parts I and IV of the Act for taxation years ending prior to 1982. The refund amount may include tax paid in prior years on income from property and taxable capital gains under Part I and tax paid on portfolio dividends under Part IV.

Counsel bases his argument on the difference in the wording of subsection 164(7) prior to the amendment of the meaning of "overpayment" by 1983-84, c. 1, s. 88(5) and the amendment. The amendment reads as follows:

164 (7) In this section, "overpayment" of a taxpayer for a taxation year means the aggregate of all amounts paid on account of his tax under this Part for the year*. [1] . .

The preamended subsection refers to amounts of tax payable under the Act; the amended subsection refers to amounts of tax paid under Part I of the Act. This difference, counsel says, supports his client's position since the preamended version, in force for the appellant's 1982 taxation year, refers to "overpayment" of amounts of all taxes payable under the Act while the amended version restricts the term "overpayment" to excess amounts paid on account of tax levied only under Part I of the Act. Since the appellant paid taxes under Parts I and IV of the Act during years prior to 1982, the refund he was entitled to receive at the end of 1982 was in respect of amounts paid in previous years on account of tax under the Act which were excessive. Counsel therefore concludes that once the appellant applied for the refund amount on June 30, 1983, interest began to run in favour of the appellant because, pursuant to subsection 164(3) of the Act, it had overpaid its taxes.

Counsel acknowledges that the amendment to subsection 164(7) in 1983 would preclude the appellant from eligibility for interest on late payment by the Minister of a refund amount in 1983 and subsequent taxation years.

Counsel asked the Court to look at the term "overpayment" on a cumulative basis. For several years prior to 1982 the appellant paid tax under Part I and Part IV of the Act. The appellant filed its return of income for 1982 on June 30, 1982, and requested a refund of tax pursuant to the provisions of subsection 129(1) of the Act. As soon as this request was made, submits counsel, the appellant was entitled to a refund. In other words, once the request for refund was made, the payments of certain amounts of tax under Parts I and IV made in previous years become overpayments of tax.

To the Minister's counsel the refund of the refundable dividend tax on hand is a payment of an "amount" and not an overpayment of tax. Counsel also submits that it is well within the intent of Parliament that no interest be payable on a refund made pursuant to subsection 129(1). Subsection 129(2) authorizes the Minister to apply the amount that would otherwise be refundable to the corporation to any liability of the corporation under the Act. Subsections 133(7) and 164(2) give the Minister similar authorization to apply an otherwise refundable amount to any liability of a taxpayer under the Act. Subsection 164(2) permits the Minister to apply an amount that would otherwise be refundable to a taxpayer as a result of overpayment of tax to any liability of the taxpayer under the Act. She argues that if the payment of refundable dividend tax (refund amount) is an "overpayment" of tax contemplated by subsection 164(7), there would be no need for subsections 129(2) and 133(7); section 164, she adds, codifies the procedure for overpayment of taxes and not for refunds of amounts of tax.

There is no doubt that the meaning of "overpayment" was altered when amended by 1983-84, c. 1, s. 88(5); prior to the amendment "overpayment" in section 129 referred to excess amount paid on all taxes levied by the Act; the amendment limited the meaning of overpayment to excess amounts paid on taxes levied only by Part I of the Act. However I do not see how this helps the appellant.

For taxation years prior to 1982 the appellant paid taxes under Parts I and IV in the amounts determined by the Act. There is no evidence — nor was it suggested — that in any previous year there was an overpayment of tax. As I understand it, the appellant's position is that a tax "overpayment", within the meaning of subsection 164(7), results once the corporate taxpayer applies for a refund pursuant to subsection 129(1).

I do not share the appellant's view. There was no "overpayment" of tax by the appellant within the meaning of subsection 164(7).

At no time when the appellant became entitled to the refund had it paid any amount on account of tax which was greater than any amounts payable under the Act or an amount so paid when ho amount was so payable. In other words the amounts of tax previously paid by the appellant under Parts I and IV were amounts paid under the Act because under Parts I and IV such amounts were so payable; there had been no overpayment. The appellant's entitlement to a refund by virtue of payments of dividends to its shareholders in 1982 does not in my view turn what were properly assessed amounts of tax for prior years to an overpayment of tax in 1982. There is no provision in sections 129 and 164 or elsewhere in the Act, for example, similar to subsection 164(5), which provides for interest on overpayment of tax as a result of the carryback of losses, to provide satisfaction to the appellant.

(b) Interest on Liability Not Owing to the Appellant

There is no evidence in the agreed statement of facts, nor can I infer, that on or about July 31, 1982, the Minister applied the refund amount to a liability of McMillen under the Act pursuant to either subsection 129(2) or 164(2), which liability was determined on or about August 22, 1983, not to be owing to McMillen. There is no evidence that McMillen was liable to the Minister in respect of taxation years prior to 1982. The appellant’s tax liability to the respondent in respect of its 1982 taxation year was reduced to nil as a result of the appellant paying taxable dividends in 1982 of $2,596,448 and applying for a dividend refund "net of federal tax payable for the year".

However, it is obvious from the agreed statement of facts the Minister did not act as expeditiously as one would have expected him to. The obvious question which arises is whether the Minister can be held responsible in any way for his dilatory behaviour. This is really why the appellant is before the Court. In The Great Atlantic and Pacific Tea Company Limited v. The Queen, [1975] C.T.C. 432; 75 D.T.C. 5283,* [2] the Minister also had the use of money for a period of time which Mr. Justice Collier of the Trial Division of the Federal Court held he had no right to. Collier J. said, at page 438 (D.T.C. 5287):

To my mind, equity and justice demand, in view of the result reached in this action, the plaintiff should be refunded the interest paid. The tax collector has had, for a period of time, the use of what is in effect double tax monies. The plaintiff, in its calculations, felt there was, for practical purposes, a set-off. It did not remit tax, as technically required, and then wait for a refund. It seems unjust the revenue department should, in addition to the use of the $474,008.59, keep the interest charged on that now refundable sum. As I have stated, I have not the power to make the direction sought. The power to do what appears in the circumstances to be right may lie elsewhere. +

+See the Financial Administration Act, R.S.C. 1970, c. F-10.

Section 19 of the Financial Administration Act, R.S.C. 1970, c. F-10 states that:

Subject to the British North America Acts, 1867 to 1965, no payments shall be made out of the Consolidated Revenue Fund without the authority of Parliament, R.S., c. 116, s. 24.

The common law principle regarding interest payable by the Crown was laid down by the Supreme Court of Canada in The King v. Carroll et al., [1948] 2 D.L.R. 705 at 710; [1948] S.C.R. 126 at 132, per Taschereau, J., as he then was:

It is settled jurisprudence that interest may not be allowed against the Crown, unless there is a statute or a contract providing for it: R. v. Miller & Sons, [1930] S.C.R. 293; Hochelaga Shipping & Towing Co. v. The King, [1944] S.C.R. 138; R. & Royal Bank v. Racette, [1948] S.C.R. 28.

Unfortunately, there is no statutory provision in the Act for the payment of any interest on amounts refunded under section 129 nor is there any mechanism in the Act to compel the Minister to make a refund pursuant to subsection 129(1) within a reasonable delay. To quote Collier, J. (supra): "The power to do what appears in the circumstances to be right may lie elsewhere."

Jurisdiction

During the course of argument by counsel for the appellant I questioned whether this Court had jurisdiction to order the Minister to pay interest to the appellant. Both counsel agreed that the trial should proceed on its merits and subsequently they would submit written arguments in respect of the Court's jurisdiction.

Section 169 provides that a taxpayer may appeal to this Court to have an assessment of tax vacated or varied. Subsection 171(1) of the Act provides that:

171. (1) The Tax Court of Canada may dispose of an appeal by

(a) dismissing it, or

(b) allowing it and

(i) vacating the assessment,

(ii) varying the assessment, or

(iii) referring the assessment back to the Minister for reconsideration and reassessment.

There appears to be no statutory provision authorizing this Court to direct the Minister to pay interest to a taxpayer on the refund amount. Thus even if I found that the refund amount was an overpayment within the meaning of subsection 164(7) I was concerned I was without authority to satisfy the appellant.

Also, an alternative argument of the appellant was that if the refund amount is not an overpayment of tax, then from the time the appellant applied for the refund amount the Minister was holding the refund amount as a constructive trustee for the benefit of the appellant; consequently, the Minister was liable for payment of interest to the appellant for the 13 months prior to making the refund and to make an accounting to the appellant. Here too, I questioned the jurisdiction of the Court.

(a) Submissions

Counsel for the appellant submits that sections 12 and 13 of the Tax Court of Canada Act gives the Court jurisdiction to hear the case at bar and to provide the appellant with the relief it has requested. Sections 12 and 13 of the Tax Court of Canada Act read as follows:

12. Jurisdiction. The Court has original jurisdiction to hear and determine appeals to the Court on matters arising under the Income Tax Act, the Canada Pension Plan, the Petroleum and Gas Revenue Tax Act, Part IV of the Unemployment Insurance Act, 1971 and any other Act of Parliament in respect of which an appeal is provided under any such Act to the Court.

13. Powers. The Court has, with respect to the attendance, swearing and examination of witnesses, the production and inspection of documents and other matters necessary or proper for the due exercise of its jurisdiction, all such powers, rights and privileges as are vested in a superior court of record.

Counsel says that since the matters arising under this appeal arose under the Act, section 12 of the Tax Court of Canada Act provides this Court with the requisite jurisdiction to hear and dispose of this matter. Section 13 of the Tax Court of Canada Act gives this Court the powers, rights and privileges as are vested in a superior court of record which are proper for the due exercise of its jurisdiction to dispose of the appeal in the manner the appellant has requested.

The ability of the Court, adds counsel, is not restricted by subsection 171(1) of the Act. The word "may" in subsection 171(1) is to be construed as permissive: The Interpretation Act, R.S.C. 1970, c. I-23. Thus, he concludes, the Court is given two options with respect to its disposition of an appeal, one option under subsection 171(1) of the Act and a second option under sections 12 and 13 of the Tax Court of Canada Act. He relies on McCambridge v. The Queen, [1979] C.T.C. 473 at 475 ; 79 D.T.C. 5412 at 5414, per Heald, J.:

There are only two ways in which the present legislation provides for disposing of appeals to the Board. One way is in the manner discussed above, by virtue of sections 7 and 9 of the Tax Review Board Act. The other is provided in paragraph 171(1)(a) of the Income Tax Act (supra) which provides for dismissal.

Because the powers given to the Tax Court in section 12 of the Tax Court of Canada Act are much broader than those set out in section 7* [3] of the Tax Review Board Act, says counsel, the Tax Court can either dispose of the appeal pursuant to subsection 171(1) of the Act or pursuant to sections 12 an 13 of the Tax Court of Canada Act.

Counsel for the respondent submits this Court does not have the jurisdiction to grant relief to the appellant since the items of assessment, tax, interest and penalties payable by the appellant are not in issue. Section 169 of the Act reads, in part, "Where a taxpayer has served a notice of objection to an assessment . . . he may appeal to the Tax Court of Canada to have the assessment vacated or varied . . . .” The assessment is, counsel submits, the assessment under section 152, which calls for the levying of amounts payable by a taxpayer to the Minister, not amounts payable by the Minister to a taxpayer.

Counsel for the respondent submits that the basis of an appeal from an assessment by the Minister is an appeal against the amount of the assessment: Vineland Quarries and Crushed Stone Limited v. M.N.R., [1970] C.T.C. 12; 70 D.T.C. 6043 (Ex. Ct.) per Cattanach J. at page 15 (D.T.C. 6045), citing Harris v. M.N.R., [1965] 2 Ex. C.R. 653; [1964] C.T.C. 562.

This Court has jurisdiction to render a decision where the amount of tax, interest or penalty payable, as assessed pursuant to subsection 152(1) of the Act, are in issue, but has no jurisdiction where the items of assessment are not in issue: The Queen v. B. & J. Music Ltd., [1980] C.T.C. 287; 80 D.T.C. 6219 (F.C.T.D.), per Grant, D.J., at page 293 (D.T.C. 6223).

Counsel submits that the appellant's appeal must come within the provisions of Divisions I and J of Part I of the Act or, no appeal lies. "A right of appeal is a right of exception which exists only when given by statute.": Okalta Oils Limited v. M.N.R., [1955] C.T.C. 271 at 273; 55 D.T.C. 1176 at 1177 (S.C.C.).

Counsel also submits that the appellant's argument that section 13 of the Tax Court of Canada Act empowers this Court to grant relief in the nature of a mandamus is founded on an incorrect premise. Section 12 gives the Court jurisdiction in matters “in respect of which an appeal is provided under. . .” an Act of Parliament. An appeal is provided under the Act only with respect to assessments of a taxpayer. As was stated in the McCambridge case (op. cit.), subsection 8(2) of the Tax Review Board Act cannot be invoked to extend jurisdiction given to the Board (now the Court) under sections 7 and 9 (now sections 12 and 14 of the Tax Court of Canada Act). Section 13 merely confers on the Court the ancillary powers of a superior court to exercise properly the jurisdiction given to it by section 12 but it does not confer upon it added jurisdiction.

Counsel states that Mr. Justice Heald's comments in the McCambridge case was only that the Board could dispose of appeals in accordance with sections 7 and 9 which, she says, indicate allowing the appeal in one of the manners contemplated by paragraph 171(1)(b), or could dismiss the appeal

necessary or proper for the due exercise of its jurisdiction, all such powers, rights and privileges as are vested in a superior court of record.

9. (3) Every appeal to the Board and all business arising out of the appeal shall be heard, determined and disposed of by a single member; and where a member has been assigned by the Chairman to preside at a hearing in respect of an appeal, he constitutes the Board in relation to that appeal and all business arising out of it unless such assignment is revoked and another member is assigned in relation thereto."

in accordance with paragraph 171(1)(a); she submits no more than this can or should be read into Mr. Justice Heald's reasons.

Counsel for the appellant disputes the argument of the opposing counsel than an assessment is limited to situations where a taxpayer owes tax to the Minister. The Minister has a duty to examine the taxpayer's return and to make an assessment under subsection 152(1) in accordance with the laws in effect at that time. Not only must the Minister determine the amount of the tax, interest and penalty payable by the taxpayer but before sending a notice of assessment to the taxpayer, the Minister must also “determine” the amount of the refund to which the taxpayer is entitled to by virtue of, inter alia, section 129 of the Act and the amount of tax deemed by certain enumerated sections to have been paid on account of his tax under Part I through the year. The Minister must also make the determination required under subsection 152(1.1) of the Act.

Counsel for the appellant also submits that the interest referred to in subsection 152(1) may be interest payable by either the taxpayer or the Minister. He relied on the Minister's current assessing practice to set out the amount of interest due to a taxpayer in the notice of assessment.

The appellant's counsel says the length of cases exemplified by Vineland Quarries and Crushed Stone Limited, op. cit., and B. & J. Music Ltd., op. cit., relate to appeals from assessments of nil tax. The comments in those cases relied on by the respondent are obiter dicta and do not apply to the facts in the appeal at bar. In those cases, adds counsel, is a common thread: the subject matter of the appeal did not affect an existing legal right of a taxpayer which was relevant for the taxation year in question. He refers to Okalta Oils Limited v. M.N.R., [1955] C.T.C. 271; 55 D.T.C. 1176 (S.C.C.) per Mr. Justice Fauteux at page 274 (DTC 1178):

It was conceded by counsel for respondent — and with this view, we agree — that the action of the Minister in modifying the tax returns submitted by the appellant, would have no future binding effect.

and to B. & J. Music Ltd., op. cit., at page 292 (D.T.C. 6223), per Grant, D.J.:

[The Respondent relied upon two cases] as authority for the proposition that an appeal can be properly taken by a taxpayer where the assessment of the Minister is nil or is showing no tax payable. Both these cases are decisions of the Tax Review Board and in each of them the assessment made by the Minister affected some existing legal rights of the taxpayer which were relevant for the returns for the year in question.

In the present case no legal right of the taxpayer is affected by the Minister's calculation or his statement as to the status of the taxpayer's cumulative deduction account sent with his confirmation of the company's tax liability as shown in its return for that year.

Counsel for the appellant submits that in the case at bar a legal right of the taxpayer relevant to the year in question is affected by the assessment of the Minster, namely, whether the Minister is permitted to retain the appellant's refund for almost 13 months without compensation. Accordingly, in his view, the cases relied upon by the respondent can be distinguished on that basis. If the Court holds that it has no jurisdiction the appellant will not have the ability to dispute the matters in question in subsequent taxation years, he says.

Counsel concludes that the jurisdiction of the Court is stated in section 12 of the Tax Court of Canada Act as “original jurisdiction to hear and determine appeals to the Court on matters arising under the Income Tax Act". Consequently since the appellant has correctly appealed to the Tax Court of Canada the Court has the power to determine the matter before it as would a superior court of record. This, counsel states, is clear from section 13 of the Tax Court of Canada Act which gives the Tax Court of Canada the powers of a superior court with respect to "matters necessary or proper for the due execise of its jurisdiction”. As the Court's jurisdiction is to determine any appeal to the Court, the Court then has the power of a superior court to dispose of that appeal in any way that a superior court of record could so dispose of an appeal. This includes the power to order the Minister to pay interest on the overpayment of tax or to order an accounting if the Court holds that the Minister held the appellant's moneys as a constructive trustee. Sections 12 and 13 of the Tax Court of Canada Act do not extend the Court's jurisdiction but merely permit it to determine the appellant’s appeal in accordance with the law.

(b) Conclusion

Section 152 states that the Minister shall examine a taxpayer's return of income for a taxation year, assess the tax of the year, interest and penalties and determine any refund or tax paid on account. The term "assessment" or "reassessment" is not defined in the Act except to provide that an assessment includes a reassessment. The terms "reassessment" and “notice of reassessment” were discussed by Mr. Justice Thorson in Pure Spring Company Limited v. M.N.R., [1946] C.T.C. 169 at 198; 46 D.T.C. 844 at 857:

The assessment is different from the notice of assessment; the one is an opertion, the other a piece of paper. The nature of the assessment operation was clearly stated by the Chief Justice of Australia, Isaacs, A.C.J., in Federal Commission of Taxation v. Clarke (1927), 40 C.L.R. 246 at 277:

"An assessment is only the ascertainment and fiscation of liability.”

a definition which he had previously elaborated in The King v. Deputy Federal Commission of Taxation (S.A.); ex parte Hooper (1926), 37 C.L.R. 368 at 373:

"An 'assessment' is not a piece of paper; it is an official act or operation; it is the Commissioner's ascertainment, on consideration of all relevant circumstances, including sometimes his own opinion, of the amount of tax chargeable to a given taxpayer. When he has completed his ascertainment of the amount he sends by post a notification thereof called ‘a notice of assessment' . . . But neither the paper sent nor the notification it gives is the 'assessment'. That is and remains the act of operation of the Commissioner."

It is the opinion as formed, and not the material on which it was based, that is one of the circumstances relevant to the assessment. The assessment, as I see it, is the summation of all the factors representing tax liability, ascertained in a variety of ways, and the fixation of the total after all the necessary computations have been made.

An assessment by its very nature is a determination of liability of a taxpayer. An amount of money owed to the taxpayer by the Crown on account of interest is not an amount which is subject to an assessment or an assessed amount of money.

It is the taxpayer who is assessed tax, interest and penalties and he is assessed by the Minister. If the taxpayer does not agree with an assessment he may object and if the assessment is confirmed by the Minister, or if the Minister reassesses, the taxpayer may appeal to this Court or the Federal Court to have the assessment vacated, varied or referred back to the Minister for reconsideration and reassessment: sections 165, 169 and 171.

Where in examining a taxpayer's return of income for a taxation year the Minister has determined a refund of tax or interest owing to the taxpayer on account of an overpayment of tax in accordance with section 164, the Minister may, on or after mailing the notice of assessment for the particular year, refund any overpayment made on account of the tax and pay interest on that amount. The Minister may notify the taxpayer of any interest due to him in the notice of assessment. If, however, the Minister does not make such refund at the time of mailing the notice of assessment the taxpayer has four years from the end of the taxation year to apply for such refund. But the determination, calculation or amount of refund and the interest resulting from any overpayment of tax do not constitute the assessment of tax, interest or penalty although the question of interest is determined in the assessment process and may be indicated on the notice of assessment. However, the notice of assessment is not the assessment. In my view the appellant at bar is not appealing from any assessment of income tax or interest but is asking the Court to make a direction to order the Minister of National Revenue to make a payment of interest.

In Guerin et al. v. The Queen, [1982] 2 F.C. 445, the issue was whether or not the Federal Court had jurisdiction to award prejudgment interest against the Crown in an action for breach of trust. Collier, J. stated at page 448:

. . . this is a statutory Court. Its jurisdiction, in respect of the subject-matter of the claims, and over persons, and its jurisdiction in respect of the remedies and other relief it can grant, must be found in existing federal statute or federal common law: McNamara Construction (Western) Ltd. et al. v. The Queen (1977), 75 D.L.R.

(3d) 273 at pp. 267-7, [1977] 2 S.C.R. 654 at p. 658, 13 N.R. 181.

Section 12 of the Tax Court of Canada Act grants this Court original jurisdiction to hear and determine appeals on matter arising under the Act and other statutes. Subsection 171(1) of the Act regulates how the Court may exercise its original jurisdiction to hear and determine an appeal under the Act. Section 13 of the Tax Court of Canada Act simply grants the Court all powers, rights and privileges as are vested in a superior court of record in respect of witnesses, documents and other matters necessary or proper for the due exercise of its jurisdiction, that is, to hear and determine appeals, but section 13 does not increase the Court's jurisdiction to that of a superior court of record. The due exercise of this Court's jurisdiction on matters arising under the Act is to hear and determine an appeal from a tax assessment. I cannot overemphasize that the Court's original jurisdiction is to hear and determine appeals in matters arising under the Act; an action against the Crown based on the Act, but is not an appeal from an assessment, is not an appeal arising under the Act, which is within the jurisdiction of this Court.

In McCambridge v. The Queen, op. cit., Mr. Justice Heald states that the Tax Review Board may only dispose of an appeal in accordance with section 7 of the Tax Review Board Act, and subsection 171(1) of the Act. These sections complement each other and are not in opposition. Section 7 of the Tax Review Board Act simply provides that "the duties of the Board are to hear and dispose of appeals to the Board . . . ” and subsection 171(1) provides how the Board may dispose of an appeal. These two sections did not extend the Board's jurisdiction in the manner argued by the appellant's counsel.

The question is whether or not if there is no overpayment of tax within the meaning of subsection 164(7) whether this Court is the proper forum to hear and determine whether the Minister was a constructive trustee. In my view, on the facts presented to me, this Court has no jurisdiction to order the Minister to pay interest or make an accounting. This Court only has jurisdic- tion to hear and dispose of an appeal from an assessment. The assessment of income tax, interest and penalties is not in issue.

The appeal is dismissed.

Appeal dismissed.