Simply speaking, there are two streams in tax litigation: the appeal to the Tax Court of Canada and the judicial review before the Federal Court. If a taxpayer wants to take a matter to court, it is important that he takes the matter to the right court. If he takes the matter to the wrong court, the court will refuse to look at the case for lack of jurisdiction.
Generally, when the matter in dispute relates to the correctness of a reassessment, an appeal must be instituted before the Tax Court of Canada. However, when the taxpayer challenges the Minister of National Revenue’s exercise of his discretion, the taxpayer must apply for judicial review before the Federal Court.