http://decisions.fca-caf.gc.ca/fca-caf/decisions/fr/item/68566/index.do 
Rita Congiu and 9100-7146 Québec Inc. v. The Queen (March 19, 2014 – 2014 CAF 73) is a recent decision of the Federal Court of Appeal that has yet to be translated into English.
Joel Scheuerman of Davies has been kind enough to provide the following commentary (I am indebted to Guy Du Pont, Ad. E., for initiating the collaboration):
This decision of the Federal Court of Appeal (“FCA”) demonstrates that, in matters of Québec Sales Tax (“QST”) and the Goods and Services Tax (“GST”) at least, the doctrine of judicial comity between the Québec courts and the Tax Court of Canada (“TCC”) and the FCA is alive and well. This unanimous decision was written by Blais CJFCA and has not yet been translated into English.
In Québec, the
Agence du revenu du Québec (the “ArQ”) administers both the GST and the QST. However, GST appeals must be directed to the TCC while QST appeals must be brought before the Cour du Québec (“CQ”).
The taxpayers, Ms. Congiu and 9100-7146 Québec Inc. (“9100”), were both assessed for GST and QST. Ms. Congiu was administering another company (“Canco”) which had been operating under the protection of the
Bankruptcy and Insolvency Act and had significant GST and QST debts. Canco transferred an amount to 9100, triggering assessments against Ms. Congiu for having distributed the Canco property without a clearance certificate and against 9100 as a non-arm’s length recipient of property transferred from a tax debtor. The relevant QST provisions relating to the assessments under attack are similar to those governing the GST provisions.
The taxpayers brought their QST appeals first to the CQ which dismissed them. Their GST appeals were then heard by the TCC.
In the TCC, (Angers J) specifically held that he was not bound by the Québec decisions since: i) the parties to the litigation and ii) the legislative framework in question were not identical. More importantly, however, the evidence provided at the TCC did not materially differ from the CQ. Indeed, the parties presented an agreed statement of facts to the TCC which was based on the factual findings of the CQ. Moreover, the issues and arguments raised by the GST appeal to the TCC were essentially the same as those raised by the QST appeal in the CQ.
The TCC went on to dismiss the GST appeals on the basis that they constituted an abuse of process. It also held that, if it was wrong with respect to abuse of process, it would still have dismissed the appeals based on the principle of judicial comity.
The taxpayers appealed the TCC’s decision to the FCA while also appealing the CQ’s decision to the Québec Court of Appeal (the “QCA”).
Approximately five weeks prior to the FCA hearing, the QCA upheld the CQ’s decision and dismissed the taxpayers’ QST appeal.
In a relatively short decision, the FCA dismissed the taxpayers’ GST appeal, holding that the TCC judge had appropriately applied the principles of judicial comity in the circumstances. The FCA did not specifically deal with the TCC’s reasoning with respect to abuse of process (other than to note that it had mentioned that point in its reasons). Instead, the operative basis for the FCA’s decision was the application of the principle of judicial comity.
The FCA also reproduced extracts of the QCA’s reasons in dismissing the QST appeal, commenting on them only to state that it accepted the legal reasoning applied by the QCA in dismissing the taxpayers’ arguments (which arguments were the same as those raised at the FCA).
As such, through this decision, the FCA further strengthened the principle that judicial comity operated between the Québec courts and the Federal courts in matters of GST/QST.