The following is the judgment delivered by
1. The Court‑‑We are all of the view that the Court of Appeal erred in its interpretation of s. 231(3) of the Income Tax Act, R.S.C. 1952, c. 148 as amended. To construe the subsection as permitting only one demand for information to be made, as did the Court of Appeal, would be to permit the taxpayer to purchase immunity from prosecution for non‑payment of tax by the payment of a fine.
2. Failure to comply with a demand within the time specified in the demand constitutes an offence for which s. 238(2) provides a penalty. Since the purpose of ss. 231(3) and 238(2), when read together, is not to penalize criminal conduct but to enforce compliance with the Act, the purpose would be wholly defeated if the Minister's power under s. 231(3) was exhausted after one demand had been made and the taxpayer fined for non‑compliance.
3. Further demands by the Minister create fresh time periods within which the taxpayer is required to comply and fresh offences for non‑compliance within those time periods for which he may be prosecuted. Any other interpretation would have the effect of frustrating what is essentially a self‑assessment system of taxation.
4. Accordingly, the appeal is allowed, the judgment of the Court of Appeal set aside and the conviction of the respondent restored.
Appeal allowed.
Solicitor for the appellant: Frank Iacobucci, Ottawa.
Solicitor for the respondent: Gil D. McKinnon, Vancouver.