INTERNATIONAL HARVESTER CO OF CANADA LTD Vs. PROVINCIAL TAX COMMISSION

JUDGEMENT

(1.) This is an appeal, by special leave of His Majesty in Council, from so much of the judgment of the Supreme Court of Canada dated 22 April, 1941, as is adverse to the appellant. The appeal relates to three assessments of income tax made against the appellant on 23 August 1938, by the Commissioner of Income tax of the Province of Saskatchewan, as follows:

(2.) The appellant is a corporation incorporated under the Companies Act of the Province of Ontario, having its head office at the City of Hamilton, Ontario. The appellant's business is the manufacture and sale of agricultural implements and parts thereof and business incidental thereto. The manufacturing operations of the appellant are carried on entirely outside the Province of Saskatchewan and its selling operations are carried on partly in Saskatchewan and partly in other provinces and countries. The appellant has no directors resident in Saskatchewan, no meetings of its Board of Directors are held in Saskatchewan, and its central management and control abide at its head office in Hamilton, Ontario. The appellant's selling business in Saskatchewan is carried on at branch offices. All monies received by the appellant in Saskatchewan are deposited in separate bank accounts and remitted in full to the appellant's said head office, which sends to the Saskatchewan branches such monies as are required for operating and incidental expenses. On these facts it is common ground that, for income tax purposes, the appellant resides outside of Saskatchewan, and this has been assumed in the Courts in Canada.

(3.) The Province of Saskatchewan had no income tax statute till the Income tax Act, 1932, was passed, applying to incomes earned or received after 1 January 1931. That Act was amended by Acts of 1933, 1934 and 1934-5. In 1936, the Income tax Act, 1936, was passed, applying to incomes earned or received in the year 1935 or subsequently. This Act was mainly a consolidation of the Act of 1932 and the subsequent amending Acts. It will be observed that, of the three assessments in question on this appeal, the first arises under the 1932 Act, as amended, while the second and third arise under the 1936 Act. It happens, however, that the language of the sections of the 1932 Act (as amended) which are relevant for the present purpose is identical with the language of the corresponding sections of the 1936 Act. For the sake of simplicity, their Lordships will refer by their numbers to the sections of the 1932 Act as amended, without specifying the numbers of the corresponding sections of the 1936 Act.