http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/71093/index.do 
Drag v. Canada Revenue Agency (April 16, 2014 – 2014 FC 367) was a judicial review application to review a decision of a CRA Manager which rejected the applicant’s request that GST, interest and penalties be cancelled. The applicant had a massage business and was advised by CRA in 2001 that he did not have to charge GST. As a result he did not collect or remit GST. In 2009 he was audited and assessed for unremitted GST. He applied for cancellation of the GST arrears, penalties and interest. The Minister forgave the interest payable to 2009 but did not grant any further relief. A subsequent appeal to a Manage was unsuccessful:
[13] The Applicant requested an administrative review of this decision in a second-level Request for Taxpayer Relief dated November 25, 2011. In this Request, the Applicant argued that he should not be obligated to pay the GST owing from December 31, 2005, to December 31, 2008, as he was told he was not obliged to collect GST by the CRA representative in 2001.
[14] In a letter dated June 7, 2013, the Manager noted that she has no jurisdiction to cancel the GST owed by the Applicant.
[15] With regard to the penalties and interest, the Manager was satisfied that the partial relief of interest arrears of $2,144.06 was sufficient. The Manager noted that the CRA had twice recommended that the Applicant obtain a GST Ruling, but there was no evidence that the Applicant did so. Given this, the Applicant’s self-assessment obligations, and the fact that massage therapy is not normally exempt from GST liability, the Manager determined that no further reduction in interest or penalties was appropriate.
The court concluded that there was no basis to grant the applicant the relief sought since the Manager was correct in concluding that she had no jurisdiction to cancel GST and her decision not to cancel the penalties or grant further interest relief was reasonable:
[17] The Applicant seeks full waiver of the uncollected GST tax, on the basis that he does not have the ability to retroactively collect it from his clients, as well as any outstanding interest and penalties assessed against him.
[18] However, subsection 281.1 of the
Excise Tax Act, RSC 1985, cE-15 [the ETA] only grants the manager power to waive interest and penalties, not the authority to nullify underlying tax obligations.
[19] To dispute his tax liability, the Applicant should have filed a Notice of Objection, pursuant to subsection 301(1.1) of the ETA, and, if necessary, filed a Notice of Appeal to the Tax Court of Canada (
Canada (Minister of National Revenue) v JP Morgan Asset Management (Canada) Inc, 2013 FCA 250).
[20] The Manager’s decision that she lacked jurisdiction to cancel the GST owing was correct.
[21] I also agree that the Manager was reasonable in declining to grant the Applicant relief from the $726.81 in late penalties and remaining interest accrual. As a recipient of supply, the Applicant is obligated to collect the GST/HST payable pursuant to subsection 221(1) of the ETA. The notations in the CRA’s logs show that the Applicant was twice advised that he should obtain a GST Ruling to determine his tax liability. There is no evidence that he did so. In view of the deference owed to the Manager by this Court, I find his [sic] decision to be reasonable.
[22] Given the circumstances of this matter, there will be no order of costs.