Grace Jothiraj

The appellant appealed assessments holding him personally liable as a director for unremitted payroll source deductions of a corporation.

The corporation faced severe financial difficulties and the appellant chose to pay net salaries to employees and other creditors instead of remitting source deductions to the Crown, hoping the financial situation would improve.

The Tax Court of Canada dismissed the appeals, finding that the appellant did not take active steps to prevent the failure to remit and therefore could not rely on the due diligence defence under subsection 227.1(3) of the Income Tax Act.

The respondent brought a motion to quash the appellant's appeal for the 2011, 2012, and 2013 taxation years.

The appellant admitted he had not served a notice of objection on the Minister of National Revenue before filing his notice of appeal.

The Tax Court of Canada granted the motion and quashed the appeal, noting that an appeal cannot be instituted under subsection 169(1) of the Income Tax Act without a valid notice of objection.