Audit Outcomes: Following a 2019-2020 audit, CRA denied Iristel's input tax credit refunds of $121.4 million and imposed penalties of $30.35 million due to alleged false statements in tax returns.
Tax Court Appeals: The assessments' validity is currently under appeal in the Tax Court of Canada (TCC).
Federal Court Claim: Iristel sued CRA and its agents for $250 million in damages and $25 million in punitive damages, alleging misrepresentation, misfeasance, abuse of process, and negligence.
Key Legal Points:
Defendants' Motion: The Defendants sought a stay of the Federal Court proceedings until the TCC appeals' resolution, arguing the issues in both cases are closely linked.
Jurisdiction and Prematurity: Consideration of the Federal Court's jurisdiction and the prematurity of the case, given the TCC's exclusive jurisdiction over tax assessments.
Iristel's Opposition: Iristel argued against the stay, citing potential unfair prejudice and financial harm.
Court's Decision:
Stay Granted: The Court agreed with the Defendants, granting a temporary stay of the Federal Court proceedings.
Rationale: The Court found the issues in both cases closely related, warranting a stay to prevent evidence duplication and inconsistent findings.
No Unfair Prejudice: The Court concluded that Iristel would not be unfairly prejudiced by the stay.
Conclusion:
The Federal Court imposed a temporary stay on proceedings until thirty days after the TCC appeals are resolved, emphasizing judicial efficiency. The Defendants were awarded costs.
